Scam Alert: Job scams flourishing, be careful out there!
Feb 9th 2009 12:00PM
Updated Feb 9th 2009 2:52PM
Now that unemployment is reaching levels not seen since World War II ended and getting closer to the time of the Great Depression, people desperate for work are getting caught up in job scams. The FTC had 6,000 complaints in 2007 and is expecting more this year. Most ripoffs require an upfront fee of $40 to $200, but some phony executive-search firms may demand thousands. If you post your resume on a job board, you become a prime candidate for the scam artists.
Often these scams can be employment-related ID fraud. The FTC says those types of frauds rose to 14% of identity fraud complaints in 2007, up from 12% in 2005. I suspect those numbers will jump as more and more people become desperate for work. When the scammers get your Social Security number, date of birth and other confidential information, they can do a lot of damage to your credit history.
Common scams include:
- Phony executive-search firms that demand thousands in upfront fees before ostensibly beginning to seek a job for you. Don't pay any fees to a search firm until you have a solid job offer. In most cases, if the search firm is actually recruiting for a company, the company will pay the fees. If not, you can negotiate fee payment as part of the offer.
- Emails or calls promising referrals to government jobs for a fee. There are no secret sources for government jobs. You can find federal jobs listed for free at www.usa.gov. Positions open working for your local or state government can be found on the state, county or city official websites. Many even allow you to apply online from those websites.
- Cashing checks or reshipping electronics. These are common scams. You're promised that you can keep a portion of the proceeds, but a week or two after you cash the check you'll find out it was a counterfeit check. The goods often are stolen, and you can be prosecuted. The counterfeit check will be recharged to your bank account and you'll lose the full value of the check. Any cash you sent to your "employer" or other designated person will be lost. Many times this fraud involves sending the money overseas.
- Emails promising work at home opportunities, such as medical billing or rebate processing. Also mystery shopper ads promising pay for testing products. These ads ask for up-front fees and you won't get work from them.
- Emails or Internet ads promising you'll make a lot of money starting up a new business. Most of these ads involve pyramid schemes. Any time your primary income will be derived from recruiting others and not selling a product, the enterprise is likely a pyramid scheme.
How can you protect yourself from these scams?
- Don't give your personal information to an employer until you have a job offer. This includes your Social Security number, date of birth or other confidential information.
- Check out the company on the Internet before sending information. Most legitimate companies have websites and job boards.
- Don't pay upfront fees to a search firm. Legitimate companies don't ask for fees up front. Payment is made after a job is found. If you want to work with a firm that does ask for a fee up front, check it out first with the Better Business Bureau and your state's department of labor.
- Before getting involved with a scheme to start your own business, check it out with your secretary of state, the local chamber of commerce and the Better Business Bureau.
Lita Epstein has written more than 25 books including "Surviving a Layoff: A Week-by-Week Guide to Getting Your Life Back Together" and "Complete Idiot's Guide to Improving Your Credit Score."