Protect Yourself From Job Scams

In the wake of the economic recession that has impacted our nation’s job market for more than five years, many Americans are actively seeking long-term employment. According to February 2014 data from the Bureau of Labor Statistics, 7.8% of recent college graduates between the ages of 20 and 24, and 3.9% of bachelor’s degree-holders 25 and older, are unemployed. Since the recession ended, the number of senior citizens seeking jobs has also risen roughly 3%, and Women Work! reports that nearly three-quarters of women who temporarily leave their careers to have children return to the workforce. Unfortunately, job-seekers of any demographic are susceptible to an unpleasant reality of the digital age: online job scams perpetrated by identity thieves and other criminals.

Below we address the most common types of scams encountered by the job-seeking public, explore a scammer’s motives, and explain how they succeed at preying on their victims. We also provide a few strategies for web users to avoid online fraud and prevent their sensitive information from being exposed.

What Motivates a Scammer?

There are many motives for criminals to dabble in online job fraud. Some of the most common reasons include the following:

Commit Identity Theft

According to the National Science Foundation (NSF), identity theft occurs when someone illegally obtains financial records, banking and credit card account information, Social Security Numbers, and other private data. This criminal then either uses the information for their own gain or sells it to someone else to use. The NSF notes the methods identity thieves most often employ:

  • Physical theft of wallets, mail, and other items that contain ID cards, bank/credit card statements, utility bills and other data. This often takes place when thieves break into mailboxes or rummage through household waste.
  • Falsely filing a “Change of Address” form on behalf of the victim and then receiving his or her mail.
  • Hacking into email accounts, locating personal information the victim has posted online, or tricking the victim into divulging their information.

In regard to job scams, the latter of the three methods is most common. Scammers post phony job announcements or contact their victims with job leads via email, and then ask for information that potentially grants them access to the victim’s personal accounts. The Federal Trade Commission notes that having one’s identity stolen can incur a wide range of negative consequences, including:

  • Adversely affecting credit ratings
  • Additional credit card charges or bank account withdrawals
  • New utility accounts
  • Medical treatment/prescription medication obtained via the victim’s health plan

Unfortunately, identity theft victims often learn the crime has taken place only after a merchant refuses their checks, a credit card statement with much higher charges appears, they are contacted by debt collectors and collection agencies, or they’re denied a loan.

Send SPAM

In addition to identity theft, some scammers sell their victim’s information to spam distributors, companies that send unsolicited messages (typically ads) to a large number of email account-holders. Although receiving spam is not as serious as having one’s identity stolen, many job scammers sell sensitive information to both identity thieves and spammers. So, if your email account is inundated with spam after responding to a job lead, there’s a good chance your “identity” has been compromised.

Receive Money Transfers

This strategy is more common among criminals who pose as charities or online vendors, but some job scammers also insist applicants wire a certain amount of money in order to view employment information and/or be considered for the position in question. According to the FTC, many of these criminals are based overseas. Once money has been transferred to them, it becomes virtually untraceable.

Gain an Unwitting Criminal Accomplice

Some scams are designed to trick victims into thinking they have a legitimate job, when, in reality, they are cooperating in illegal activities. According to Monster.com, criminals often “hire” job applicants to “process payments” or “transfer funds,” with the perpetrator claiming their status as a foreign national is preventing them from moving the money themselves. In reality, this is most likely a money laundering scheme. In other cases, individuals are hired to “repackage” goods in their homes that have actually been stolen. If you believe you have been targeted by criminals like these ― or suspect you have unwittingly taken part in their illegal activities ― then you should contact the authorities immediately; otherwise, your involvement in the operation could lead to serious legal repercussions.

Understanding How Scammers Find Victims

In addition to the motivations of job scammers, it is important to understand how these criminals locate their victims. This section lists a few common routes job scammers take, as well as some potential red flags to help web users avoid these scams.

Fake jobs, job boards, and employers

Unfortunately, job scammers have been known to prowl for victims on legitimate job board websites like Craigslist, Indeed, and CareerBuilder. Some pose as fraudulent companies, while others create phony job announcements for existing companies. In some cases, the entire job board has been created as part of the scam.

DailyFinance notes that fake job leads often contain many red flags, such as poor grammar and spelling errors, or generic job titles (e.g. “customer service representative” or “administrative assistant”). In many cases, these job leads do not provide a contact phone number, email address or link to the company’s official website. Corporate email addresses that do not match the company’s name are also suspicious, especially if the company listed in the job announcement is an established corporation.

The Better Business Bureau (BBB) also urges job-seekers to scrutinize the job description for red flags. If, for instance, the employer guarantees a salary and/or health benefits that seem relatively generous for the position, or if they assure applicants that “no experience is necessary,” then the job lead ― and by proxy, the company ― is most likely a scam.

Fake company websites and job boards also have identifiable red flags. As noted in a tutorial from Microsoft, legitimate sites use encryption software. Fishy sites, on the other hand, may not be secure, and web users receive a warning notice if this is the case. Low-resolution images or basic page formatting are two other telltale signs of a fake site.

In the case of job boards, it should be noted that legitimate employment sites receive payment from the companies that post leads ― not job-seekers. Any job board that asks users to pay for their services should not be trusted. Job-Hunt.org also notes that bogus job boards may ask first-time users to register their personal information before they are able to conduct an employer search; most legitimate job boards, on the other hand, do not require registration in order to browse available positions.

Direct emails from “employers”

Individuals who use sites like LinkedIn and Monster during their job search are susceptible to recruiting scams, in which the criminal directly contacts the job-seeker to say their “company” is interested in hiring them.

First off, it’s somewhat rare for hiring officials with any company to reach out to individuals who use these sites and offer them employment without the submission of an application or query email. If you receive an email from a recruiter in regard to a job you haven’t applied for, tread carefully. Many scammers may even attempt to schedule an interview using an instant messenger service, rather than standard platforms for job interviews (such as in-person meetings, telephone calls, or Skype chats).

The BBB notes a recent scam conducted on LinkedIn, in which scammers emailed the site’s clients, offered them jobs, and asked for non-financial personal information, such as Social Security Numbers and birthdates. While this information might seem innocuous, job scammers can extract bank accounts, credit card numbers, and other more sensitive information using basic bits of data. Others may take the opportunity to deliver malware (a data-draining computer virus) to your email account.

In general, users should be wary about accepting add requests from individuals they don’t know. If the recruiter states payment is required for training, then he or she is almost certainly a scammer. Job-seekers should also watch out for positions exclusively home-based, although this may not be so uncommon in certain sectors like freelance writing. Scammers often use generic images on their profile pages, making it difficult (if not impossible) to contact anyone at the company via phone or email.

Sometimes scammers hide behind reputable companies in order to obtain the information they want. In 2012, the FTC refunded a total of $2.3 million to victims of a ‘work-from-home’ scheme after a scammer posed as a Google representative and sent lucrative home-based job offers to random email addresses.

Paid membership or access to job leads

Some scammers solicit business from their victims by selling them “memberships,” which grant access to employment agency databases or “prescreened lists” of legitimate home-based job opportunities. As soon as money has been exchanged, the victim is locked out of the account and unable to access any of the promised leads.

In 2010, the FTC announced a crackdown on criminals who used methods (such as these fake memberships) that allow them to prey on unemployed individuals. One company that used this tactic, Abili-Staff Inc., charged customers between $30 and $90 for a copy of the company’s pre-screened list. The purchasing agreement stated that clients would access more than 1,000 job opportunities or receive a full refund. However, those who paid the fee were not given access to any materials.

Another case involved a company named Entertainment Work, Inc., which advertised leads for extra roles and other part-time jobs within the television and film industry. Clients paid between $20 and $25 for a “trial membership,” and then another $80 once the two-week trial period expired. According to the FTC, the company “deceptively claimed consumers would find entertainment and media jobs near where they lived, without regard to their experience, skills, or appearance.” Entertainment Work also failed to tell clients that opting out of their membership would incur another fee.

These two companies have been caught, but the FTC warns there are plenty of similar scams still active. Job-seekers are encouraged to avoid “deals” like these, as they almost always prove to be meritless.

Common Job Scams

Now that you understand the motivations behind job scams and some of the ways scammers locate their victims, let’s discuss the most common scams in specific terms.

Home-based employment

These scams come in many forms, and are delivered to victims via email messages, online advertisements, and letters in their mailbox. According to the FTC, some of the most common home-based scams include the following:

Envelope stuffing

Scammers entice job-seekers with this job by promising them high pay for little work. Many come across such jobs through their email, advertisements, and, at times, physical letters. The sample job description provided by the FTC is as follows:

“$550 to $3,000 weekly. $2 for each circular you mail…
Free Postage…Free Supplies… No Advertising!
Paychecks mailed to you every week!
Advance paycheck forms included in your package!!”

However, this blurb is highly misleading. The company usually offers to teach job-seekers how to professionally stuff envelopes for a nominal fee. Once the money has changed hands, job-seekers receive an email or letter instructing them to recruit family members and friends for the same envelope-stuffing opportunity. This enables the job-seeker to earn the large salary they’ve been promised. In reality, the individual is not paid at all. When looking for a job, especially in hard times, the promise of high pay for little work is very enticing. Who wouldn’t want to work from home for $550 per week? The more important question to keep in mind, however, is: who would pay $550 per week for you to stuff envelopes?

Home assembly

This work-from-home scheme is somewhat similar to the envelope-stuffing scams described above. A job posting advertises home-based craft or assembly positions that allegedly earn employees thousands of dollars a month. Once the candidate has paid the company for supplies and training materials, he or she is able to produce goods that are purchased by the company as soon as their work is complete. However, when the finished products are submitted, the company refuses to buy them, often citing reasons like “substandard craftsmanship,” and then denies payment.

Home-based medical billing

Digital medical recordkeeping is a burgeoning industry within the U.S., but not all job postings in this sector are legitimate. Scam ads describe web-based medical processing jobs that reward high salaries, provide flexible schedules, and are available to applicants regardless of experience. By investing money into the company for essential business materials, job-seekers are able to launch their own medical billing business. As the FTC notes, however, these companies rarely have any association with actual doctors, nurses, or anyone else within the medical community. In some cases, the software sold to job-seekers won’t work at all. If you are interested in a career in medical billing, please check our advice page where we provide you with videos on how to recognize such job scams and how to get a legitimate medical billing and coding job.

Rebate Processing

This scam advertises home-based positions for rebate processing. Job candidates pay a fee for training and certification, then supposedly earn back the money they’ve invested, and much more, by processing financial rebates. However the FTC warns that the professional materials ― if they actually exist ― are poorly written, and the candidate receives no rebates once they have paid the company.

Online Searches

These phony jobs promise anywhere from $500 to thousands of dollars per week for individuals who conduct online searches and fill out forms. By paying a small fee, job-seekers are given authorization to conduct the searches and given form templates. However, these companies are most likely not affiliated with the search engines they claim to represent. Since most require payment with a credit card, the “company” gains access to the job-seeker’s financial information.

Mystery Shoppers

These job postings, which usually appear to be from established retailers, seek out individuals to secretly shop at store locations and measure the quality and customer service of the employees. Once a report has been submitted, the mystery shopper is reimbursed for the product they purchased; they may also receive a small payment. It should be noted that mystery shopping is an actual industry, but most participants consider it to be little more than a part-time endeavor and never expect to make much money. Scams ordinarily charge a fee for training and certification for mystery shopping. A sure sign of a scam.

The bottom line: if an unsolicited job offer sounds too good to be true, it almost certainly is a scam, especially if there is an upfront fee. The FTC urges suspicious job-seekers to cross-check every potential employer with a national database of reputable and disreputable companies (such as the BBB). Additionally, if you encounter a recruiter who seems shady, you can help determine whether or not the business is legitimate by asking the following questions:

  • How and when will I get paid? Who pays me?
  • Where is their main office located?
  • How long has the company been in business?
  • Is this a salary or commission-based position?
  • What are my day-to-day duties supposed to be?

Bogus government positions

The FTC notes that a large number of phony job leads advertise positions with the federal government; most often with the U.S. Postal Service. These scammers can usually be found on job boards, and they often send direct emails. Some concoct fake government agencies, such as the “U.S. Agency for Career Advancement,” and directly contact individuals to let them know they qualify for certain job openings. Next comes the scam. In order to be considered for the position, the victim must pay for study materials that ensure he or she receives a high score on the required, entry-level exam.

Regardless of the delivery, all of these scams share the same red flag; they charge a “small fee” for information about federal job openings. The U.S. government never solicits money for this type of data. Detailed descriptions of each opening in every agency are free for anyone to browse on sites like USAJobs.gov. While most entry-level postal workers pass a written exam in order to start work, the content of the test is mostly related to general aptitude, which, as the FTC points out, is “something you can’t necessarily increase by studying.” Furthermore, the hiring of new employees is contingent not only on the text score but also the candidate’s background check and drug screening.

Job-seekers should be wary of any government employment postings not found on departmental websites or established job boards. Classified ads, digital banner ads, and any description that directs job-seekers to a 900-number should also be viewed as suspicious.

Free grants

Always be skeptical about email messages and phone calls announcing you’ve been awarded a government grant for odd reasons, such as “paying your taxes on time,” or classified ads directing readers to a 900-number where they can claim free grant money. The FTC refers to these as “free grant scams.”

The scam occurs once you’ve contacted or been contacted by the phony organization that claims to be awarding the grants. Usually, a representative conducts a brief interview, and then concludes the conversation by telling the individual they qualify for the money. They then ask for checking account information in order to set up direct deposit. Others ask the individual to pay a relatively small fee in order to receive the much larger grant.

The FTC warns against sharing financial information or paying anyone who claims to be disbursing free grants; an authentic government agency never charges grant recipients money. In fact, the only legitimate website for federal grant application and processing is Grants.gov.

Money transfers and product repackaging

Between 2004 and 2009, a total of $46 million was stolen in money transfer scams conducted over the website Moneygram. These schemes included fake lottery and sweepstakes prizes, family emergency scams, and “guaranteed loans”, all of which were merely fronts for scammers and money launderers.

Here’s how the scam works: the victim is contacted (usually via phone or email) by someone soliciting money for taxes on a lottery prize, a friend or family member in need of financial assistance, or fees for loans geared toward individuals with bad credit. However, the money goes straight into the scammer’s account. “Using a money transfer service is like sending cash,” notes the FTC, “once you send the money, it’s nearly impossible to trace it or get it back.”

Criminals also get assistance from unsuspecting individuals by offering them jobs as “product repackagers.” Items are shipped to the employee’s home, he/she repackages the items, and then sends them to a predetermined address. The employees pay for shipping themselves, having been promised a reimbursement, but this money almost certainly never arrives. There are other complications, notes Monster Senior Contributing Writer John Rossheim:

“In addition to seeing their own paychecks bounce, those who fall for reshipping scams may be liable for shipping charges and even the cost of goods purchased online with stolen credit cards. How can the victims be criminally liable? For starters, they handled goods that were stolen and followed scammers’ instructions to lie on US Customs Service forms if they forwarded packages abroad.”

How to Protect Yourself from Scammers

Now that we’ve described some of the different scams targeting unemployed job-seekers, let’s discuss ways you can avoid becoming a victim of online scammers.

Verify ALL companies

Before contacting any company about a job listing, it’s important to make sure the job, as well as the company, is real. Verify the corporate name with the Better Business Bureau or the FTC, and, as an extra precaution, visit Glassdoor to see what former and current employees have to say about working for the company. In a recent interview with U.S. News & World Report, Flexjobs CEO Sara Sutton Fell urged job-seekers to cross-check the job announcement with the company’s official web pages. “When you find job listings on outside sites, it’s easy to go to the main career page of the company and check their own website’s listings to see if the job is really being offered by them,” Sutton Fell says. “If you can’t find it on the company’s career page, it might be a scam.”

Be wary of potential red flags.

Here are warning signs a job listing is nothing more than a scam:

  • The company requires an up-front fee from job candidates for training materials, certification, or other essential services
  • The company offers a job without receiving an application
  • The job listing is filled with misspelled words, poor grammar, excessive capitalizations, and/or low-resolution images
  • The company proposes an instant messenger-based interview
  • The company’s name and/or contact information aren’t mentioned in the job listing
  • The company’s name doesn’t match the contact email address or URL
  • The company’s official website looks cheaply designed
  • The company offers exclusively “work-from-home” positions
  • The company promises a large salary that doesn’t match the qualifications or nature of the job
  • The company sends you unsolicited emails or other materials
  • The job requires virtually no experience or prior training

Watch for suspicious terms and keywords.

If a job listing features the following words and phrases, it’s most likely NOT a legitimate offer:

  • “Package forwarding” or “Reshipping”
  • “Money transfer”
  • “Wire fund”
  • “Rebate processing”
  • “Home assembly”
  • “Envelope stuffing”

Trust your instincts.

Most job-seekers have enough employment experience to differentiate between a legitimate opportunity and a shady offer, but it’s always important to go with your gut if a job listing seems too good to be true. “Even though you’re anxious to get hired,” Sutton Fell warns, “don’t let your guard down and leave yourself open to scam artists taking advantage of you.”

Report all suspicious activity to the FTC.

If you believe you have encountered a job scam of any kind, it’s important to report your experience to the proper authorities. In addition to filing an online complaint with the FTC, you are encouraged to contact your state attorney general and/or your state consumer protection agency.

Where to Look for Jobs

Job-seekers are urged to limit their employment searches to the following types of websites:

  • Sites referred to by a college/university career center
  • Sites sent to you directly from an employer’s website
  • USAJOBS.gov, the official job board for federal government positions
  • CareerOneStop, a job board sponsored by the U.S. Department of Labor
  • Monster, Indeed, CareerBuilder and other established employment listing sites as long as you feel confident in your ability to detect red flags and spot job scams

When employment-seekers are targeted by scammers, the job hunting process (which can be frustrating in its own right) can become a nightmarish ordeal. By avoiding job listings that ask for upfront fees or otherwise seem fishy, refusing to share personal data with prospective employers, and cross-checking all potential jobs with both the company and watchdog agencies like the BBB and FTC, you can mitigate your odds of falling victim to these criminals by a considerable margin.