Tag Archives: Employment Scams

Who Initiated Contact?

When it comes to recognizing and avoiding scams, one question that can be helpful is, “Who initiated this contact?” In many situations, the answer can be the difference between a legitimate transaction and fraud.

Scammers are proactive if nothing else—they usually don’t set up shop then wait around for people find them. There is often a “sales” element to a scam, in which the con artist has to actively approach a victim in order to offer the bait.

In other words, if the other party initiated contact, your chances of falling for a scam are increased. Let’s look at a few scenarios.

Scenario #1: Home Repairs

Think about what usually happens when your home needs repairs. You, the resident, usually start out by noticing that something needs to be fixed. You assess what needs to be done, and then make a decision as to whether you’re going to perform the repairs yourself. If you choose the DIY route, you go out and purchase materials and tools, but if the work is beyond your abilities, you’ll call a contractor, roofer, plumber or other service provider.

Now look at a home repair scam: it starts with a knock on your front door. When you answer, a stranger informs you that your gutters need cleaning, your driveway needs to be repaved, or that your siding needs fixed. You weren’t even aware there was a problem. From here, the scam takes one of a variety of paths: they may start with a minor repair for a reasonable-sounding price, then start adding on tasks (never completed) until you’re stuck with a bill for thousands of dollars. In other versions, they’ll talk you into a major repair job, collect a large down payment for the service, and then never show up to perform the work.

Notice who initiated contact in both of these examples: in the first, you called a contractor. Of course, there are shady contractors, but in general you’re going to get the service you paid for. In the second, they contacted you, and it turned out to be a scam.

Scenario #2: Lottery Scams

Here’s how a legal, legitimate lottery works: you visit the nearest convenience store, grocery store or gas station, where you purchase a lottery ticket. You wait for the little TV segment with the big tumblers full of ping-pong balls, and check your numbers against the ones drawn on television. Then you throw the ticket away, because you probably didn’t win a dime.

During a lottery scam, however, you are suddenly informed via email that you have won some lottery in the U.K., Canada, Australia or South Africa that you didn’t purchase a ticket for. If you respond to this message, you will be told that you have to pay taxes and fees before you can claim the prize. You wire a few thousand dollars overseas and never hear from them again. You’ll always lose in this situation.

Once again, the question of who initiates contact is a strong indicator of the legitimacy of an offer.

Scenario #3: Employment Scams

When you’re looking for a genuine job offer, you research local employers who are hiring, update your resume, write cover letters and send these out. If they’re interested in hiring you, they call you in for an interview (or several), and they make a decision based on your qualifications.

Employment scams work the other way around: you just check your email one day, and there’s an offer for a high-paying, work-at-home style job waiting for you, from some company you’ve never heard of. If you jump on this out-of-the-blue job offer, you’ll eventually be asked to cash a fraudulent check and wire the funds out of the country, leaving you with a loss of thousands.

“Who initiated contact?” isn’t always a foolproof method, and it doesn’t apply to every situation, but it’s a good idea to keep the question in the back of your mind. You might be glad you did one day.

Insane promises and the old envelope stuffing scam

One of the first rules in avoiding employment scams is to ignore every advertisement that makes insane promises when it comes to income, and nothing fits that description like the old Envelope Stuffing Scam.

I did a search on this topic on Google. The very first result was an advertisement for one of these very schemes. Here’s a screenshot:

getstuffed1

Why does anyone even bother going to college when they could be putting paper into envelopes? And it even says, “No catch. No scheme.” I mean, if they say they’re not a scam, they must not be, right? I mean, you can believe everything you read on the Internet, right?

The $5,000 is an insane enough claim, but look at the text of the ad. $10 per envelope? That’s an awful lot of money for not much work.

Look at it this way:

Time it takes to put something into an envelope: 10 seconds.
What they claim to pay you: $10/envelope.
What you’d be earning per minute: $60.
What you’d be earning per hour: $3,600.
What you’d be earning per week (40 hours): $144,000.
What you’d be earning per year: $7,488,000.
Jonathan Toews’ 2010-2011 salary: $6,500,000.

You’re making more than an NHL star, just by stuffing envelopes, plus you don’t have to get the spit repeatedly knocked out of you by large, fast men on ice skates. What’s not to love?

This is about all the proof you need that this is a scam. So what’s really going on here?

Apparently, if you try to get into the envelope stuffing business, you won’t end up stuffing a thing (except perhaps your pride). You pay the company up front (always a bad sign) to send you a “kit” (a word that almost never leads to good things when it comes to job offers). With this kit, you’re supposed to rope other people into the envelope stuffing business. It sounds an awful lot like a pyramid scheme to me.

Never just jump into a job offer without checking it out first. Aside from paying money for a job that turns out to be a sham, these shady companies aren’t above selling your personal information to other entities.

There are ways to earn money online; start by ignoring almost everything on the Internet

It’s easy to get bogged down in all the negatives when you’re writing article after article about scam and fraud prevention. “Here’s how not to get taken,” you tell people, and leave it at that.

However, the truth is that not everyone on the Internet is trying to steal from you.

Okay, most, but not everyone. The key is to be able to tell the difference.

I read a nice article from CBS News today (Work at Home and Make Money – REALLY!) that not only gives great tips on avoiding work-at-home scams, but actually offers suggestions of legitimate companies that can help you earn money from home. I’ve never really seen that before.

One of the things you’ll immediately notice is that none of these companies scream about anyone making $5,000 per week. In some cases, you have to have some pretty good knowledge of a topic, or even certification. In others, you’re basically selling your stuff on eBay (if it’s just old stuff) or Etsy (if it’s something vintage or handmade).

Nobody is getting rich off these systems. If it’s fabulous wealth you’re after, you’re going to have to be a lot more inventive. But if your goal is simply to supplement your income, there might be something useful in the article.

BobBear anti-fraud site shutting down.

This is sort of a bummer—the website bobbear.co.uk is shutting down for good.

According to the message on the site, if someone made a serious offer, he might sell the site to them. Even so, I doubt this would be done as a non-commercial venture. Websites always lose the thread when the person with the original vision is no longer involved (look at the sad case of JumpTheShark.com, which I’m not even going to link to because it’s pathetic. That was a bad thing you did, TVGuide.com).

BobBear was dedicated to exposing money laundering and reshipping fraud websites. Often these sites were hard to spot, as they look like professional pages from legitimate companies.

However, they were anything but. People who applied for jobs would either end up reshipping stolen electronics between thieves or wiring stolen money between bank accounts.

There are still a few lessons to be learned from BobBear:

  1. You have to research companies before you apply for a job. Just because it has a website doesn’t mean it’s a real company.
  2. Poor grammar and spelling are warning signs, but an absence of bad English doesn’t prove a site is legitimate.
  3. There is no reason to hire someone to receive a shipment of goods, and then have them send it to someone else.
  4. There is no reason to hire someone to receive electronic payments, and then have them wire these to someone else.

Employment Scams: a perfect illustration of what to watch out for.

Quite some time ago, I posted an article about words that signify a probable scam.

This recent article from the Puget Sound Business Journal illustrates that concept beautifully.

In this story, the Better Business Bureau is slamming (yeah!) schemes called  “Search Profit System” and “Money Mastery,” both operated by the same company.

Both of those names contain red-flag words: “profit” and “money,” respectively. Right away, if you know what to watch for, you know you’re dealing with something that’s probably not legitimate. The fact that it’s a “work-at-home” program might also cause your “scam detector” to go haywire.

You’d be right, too. People who signed up for this program found themselves paying $1.95 for a starter packet, and then $49.95 every month for absolutely nothing. When they tried to cancel their accounts, they found it impossible to do.

However, if the names of the programs didn’t tip you off, this should: 

“Quit living paycheck to paycheck, get rid of debt, and have enough to retire when you want to. Pay off all of your debt including your mortgage in three to nine years.”

That’s a pretty hefty claim, isn’t it? It’s not exactly screaming, “Become a millionaire instantly!”—it’s a little more subtle than that—but it is promising an answer to all your problems.

Think about that first sentence. When was the last time you were hired for a legitimate job where the interviewer used the phrase, “quit living paycheck to paycheck?” It’s a weird thing to say when you’re advertising a job.

No, a phrase like that is designed to lure people who are desperate for money and have reached that “any port in a storm” point. However, if you pursue a claim like the ones being made by this advertisement, you’ll quickly learn one hard lesson: if there’s one thing worse than being broke, it’s being broke while getting charged $50 per month for absolutely nothing.

Mystery Shopper scams escalating.

According to the Internet Crime Complaint Center (IC3), mystery shopper scams are seeing an increase in frequency.

Continued high unemployment rates are likely the root of this upswing—the longer people are out of work, the more likely they are to want to believe in a job opportunity, no matter how strongly all signs are pointing to “scam.”

Worse, it appears the scammers have become a little more patient: they’re not going in for the kill until they’ve earned your trust by sending you on what appears to be a legitimate secret shopper mission.

The victim in this case doesn’t get a cashier’s check right off the bat. First they are sent to a retail location (unspecified in the IC3 press release, but I’d bet you a dollar it’s usually Wal-Mart) with instructions to spend a certain amount of money and take notes on various aspects of their shopping experience. The victim does as told, and reports back to the “employer.”

For the second assignment, the victim is mailed a cashier’s check, which is to be (you guessed it) cashed and wired back to the scammers from the same retail location, with some kept by the victim as payment. The usual result follows: the victim cashes the check, wires most of it back, and finds out a few days later that it was counterfeit and they now owe their financial institution around $2,600.

No, the victim’s bank or credit union isn’t going to cover the fake check. Why should they? It’s not their fault the victim presented a phony check.

No, the bank or credit union from whom the fake check is drawn isn’t going to cover it, either. Why should they? They didn’t create the check. It was never drawn off a legitimate account in the first place. If someone made a fake box of checks with your name and account number on them, would you feel like you had to cover those checks? Of course not. Financial institutions feel the same way.

No, the person who ends up having to cover the check is the victim. If they’re lucky, they bank at a financial institution that puts a hold on cashier’s checks. If they’re even luckier, the teller asked them about the check and recognized it as a scam, and the check was never even deposited to begin with.

But if they’re unlucky, or if they manipulated the teller into releasing the funds right away, they’ll always end up wishing there had been a hold placed or an alert teller to dissuade them.

The problem with not having a source of income is that you generally can’t afford to lose $2,600. Most people can’t afford it when they are employed. Falling for one of these schemes will only make things worse. If you get letters or email offering jobs out of the blue, don’t trust those messages. Being almost broke is still better than being a couple thousand in the hole.

How to avoid employment identity theft.

I’ve said many times before that not all identity theft is strictly financial, although other types of theft may have financial implications.

Medical identity theft is used to obtain services or to bilk insurance companies out of money for services that were never given. It can lead to collections activity against the victim, and at worse, false medical records that could be hazardous to the victim’s life.

Criminal identity theft can lead to victims being incarcerated and stuck with false arrest records that are difficult to expunge. It can lead to loss of job opportunities, and in some cases the victim has to hire a criminal defense attorney to get the situation under control.

Employment identity theft can, on the surface, seem like an almost victimless crime. When someone simply uses your personal information to obtain a job, you might not necessarily even find out unless you happen to apply for a position with the same employer (which has happened before). In fact, I’m sure that a lot of the people who actually use stolen information to get jobs think of it as a victimless crime.

However, what happens if the person using your identity to get a job doesn’t pay taxes on their earnings? The IRS will come looking for you.

One of the enduring myths of identity theft is that the person who steals your information is going to be the same person who uses it. This used to be more or less true, in the days before the Internet made things easier for criminals. These days, a more likely scenario for employment identity theft is that one entity steals information from a lot of different people, then sells it to those who need it. As I’ve often said, this is the realm of organized crime. The person who snags your Social Security Number through illicit means is just a middleman.

In other words, the standard rules apply; guard your SSN and be cautious about who you give it to.

Fraudulent job listings are a major source for this form of “retail” identity theft. You have to be extremely careful when applying for jobs online, especially during these times of high unemployment. However, don’t let your guard down when the economy recovers. This stuff is always out there.

First, never give your Social Security Number before a job interview. Any employer talking about a “preliminary background check” is already breaking the law, so you know right away that something is wrong. The second they speak of a preliminary check, refuse and move on.

Second, never provide financial information. If it’s a job that requires a credit check before hiring, they don’t need account numbers for that. They’ll need your Social Security Number, but by the time you’re actually sitting in an office with an interviewer, surrounded by employees, you’re a little safer in giving them the information. Thieves don’t often set up actual office premises—it’s too much work.

Third, be extremely vigilant when applying for jobs online. Do your homework, check up on the company, make sure any emails are from company accounts (like [nameofcompany].[com/org/net]), not free personal addresses (live.com, gmail.com, yahoo.com, etc.). Online application forms are an easy way for fraudulent web sites to harvest personal information. If they’re asking for your Social Security Number, STOP.

Finally, these are far more “work at home” scams on the Internet (and in the Classifieds, in your Inbox and stapled to telephone poles) than there are legitimate home-based job opportunities—the ratio is 54-to-1, according to one source. This means that if you’re looking at an online work-at-home offer, there is a 98% chance that it’s a scam and possibly a front for an identity theft ring. In other words, don’t even bother.

If you’re serious about working from home, your best bet is to contact a staffing agency (preferably a local one with an actual, physical office) and see if they have any leads. Or, you can start your own business and create your own income model. You either have to telecommute (traditional job, only you don’t go to the office much) or create something that people want (whether a product, information, or entertainment content) on your own, and figure out how to monetize it.

Probable Census Bureau job scams: a preemptive strike.

I heard an advertisement on the radio just yesterday, recruiting people who’d like to work part-time as census-takers for the 2010 Census. It gave a phone number and a website to contact them. Since it used a “.gov” domain, I know the ad was legitimate.

I also know that every single thing the government tries to do is almost immediately used by criminals to mount some sort of scam. See also: Social Security, USPS jobs, economic stimulus funding, tax returns and just about anything else you can think of.

So consider this a preemptive strike: somebody, very soon, is going to start running a “Census Bureau Jobs” scam.

If you get an email offering you a job as a census-taker, just delete it. It won’t be legitimate. Neither will any newspaper ads that direct you to someone who wants you to pay for information on these jobs (like the old Postal Service jobs scam).

There are only three ways to get the official information, and they all involve contacting the Bureau directly:

  • Online: visit http://2010.census.gov/2010censusjobs/. See that “.gov” at the end? That means it’s a legit US government website.
  • Call 1-866-861-2010
  • Contact your local Census Office. This information is available at the above website, so it’s sort of a repeat of #1.

I haven’t even heard anything about anyone using Census Bureau jobs as the basis for a scam yet, but I know it will happen.

So, now you know in advance. Now that’s vigilance!

How phishing and work-at-home schemes work together

I just read a really eye-opening report from the Internet Crime Complaint Center (IC3) about how phishing emails, fraudulent ACH transactions and work-at-home schemes can be connected.

It starts with a “spear-phishing” message. Spear-phishing is a targeting form of phishing, made to look like it comes from someone you know, possibly a friend or employer. This message, rather than the usual phishing angle (“click this link to verify your account information”) will either contain a malware-infected attachment, or will link to a website that infects the user’s computer with malware.

This malware includes a keylogger program, which sends a record of keystrokes back to whoever originated the scheme. Once the victim logs into one of their financial institution accounts, this information is relayed back to the crooks.

At this point, the crooks will use either wire or ACH transfers to remove money from the victim’s account. However, it doesn’t end here.

The next victims in the process are those who have fallen for some form of work-at-home scheme (usually “processing payments” or similar). The money stolen from the first victim is wired into an account held by the next victim, who then transfers it back to the criminals, thinking they are actually processing a “payment” from the original victim.

So, they’re not just logging keystrokes to steal money from one group, they’re using a second set of victims to launder the money for them.

It would be brilliant if it weren’t so slimy.

This got me thinking about US Surveys, Inc., whom I wrote about a couple months ago. In doing research on this obvious mystery shopper scam, I actually came across a few victims who, at least for their first “assignment,” had actually made around $100. “They wired $900 into my Citibank account, then had me wire $800 back to them.” It was only on their second “assignment,” when they were asked to wire their own money first, that they began to wise up.

I thought that was kind of weird at the time. Were they actually paying you the first time just to earn your trust? It seemed like an awfully big gamble, since people were realizing that it was a scam soon afterwards (not to mention the risk of someone just taking the $900 and running).

Now it makes sense. The initial $900 was probably money stolen from a spear-phishing victim. That $100 these people had made was their payoff for helping someone launder money. They weren’t being ripped off initially, but they were helping a criminal conceal the source of funds.

The second, “Now wire us your money first” assignment was probably just an attempt at an extra payoff on their way out the door; by that point, the original victim (whose money was being laundered in the first transaction) had most likely discovered the fraud and locked the account. Thieves have to move quickly from victim to victim these days.

What all this leads me to is the following:

  1. Keep your virus protection up-to-date
  2. Learn about different types of scams so you’ll know what to watch for
  3. Do not become involved in work-at-home schemes that involve “processing payments” or wire transfers; these are money laundering schemes; the only real ways to legitimately work at home are to start your own business, or to work for a company that allows telecommuting
  4. The multi-level integration of these different types of fraud is terribly sophisticated; this is organized crime
  5. Because of #4 above, your best bet is just to avoid, avoid, avoid. Lose any big ideas you might have about trying to “scam the scammers”
  6. If you are a victim of this type of crime, in addition to the standard credit locks and police reports, file a complaint with the IC3; your information could help federal law enforcement stop this type of crime in the future.

Entry-Level Job Scams

I suppose this post technically isn’t about scams, per se. A scam, in its simplest form, is when someone takes your money without giving you anything in return.

But what would you call a job listing that misleads you as to the nature of the job, promises a fat paycheck that will never materialize, and comes from a company that dodges basic questions about salary, benefits and basic descriptions of the job?

What would you call a job that promises entry-level employment in the sports or entertainment industry, but really entails going door-to-door for 12 hours a day, selling coupons (that may have something to do with a sports or entertainment venue)?

I know what I’d call it: a scam. Plain and simple.

These advertisements are often found in the Classifieds section of the newspaper, but I’m told they’re just everywhere on CareerBuilder and Monster (as well as every other job search website in the universe). They’re aimed at recent college graduates, but people from all walks of life fall for them. In the current economy, with unemployment running wild, I’m sure more people than ever are applying for these jobs.

So, how do you avoid these less-than-honest job offers?

  1. Warning Sign #1: The advertisement promises entry-level work in the professional sports or entertainment industries. Sometimes they will list sports teams that are “clients.” Here’s a trade secret about real entry-level jobs in sports and entertainment: they’re all taken. It doesn’t matter when you’re reading this. They’re taken.
  2. Warning Sign #2: When you call the phone number, they won’t say the name of the company. That’s because they often work under many different names.
  3. Warning Sign #3: Your first interview is over the telephone. During this interview, you’re told that you’ll “just have to see for yourself.” You will always be granted a second interview. You can tell them you’re an escaped serial murderer, and they’ll still grant that second interview.
  4. Warning Sign #4: Your second interview consists of being picked up in a junk car and driven to the worst neighborhood in the universe by another employee. You’re handed a stack of coupons and told to take one side of the street. Essentially, you’re working for free that first day. You could also end up stranded in The Worst Neighborhood In The Universe if you protest. And, since you showed up in a suit because you thought it would be a real interview, everybody in TWNITU thinks you’re a banker trying to take their house.

The best defense is just to not answer these ads in the first place. Nobody is handing out jobs in the music business in this (or any other) economy.

Your other best defense is to be informed. Do the following Google search: “[name of company]” scam. You might find out everything you need to know with that one step. Trust your instincts, too—if something about a job offer or interview doesn’t seem quite right, it probably isn’t.

I found a couple excellent articles on this topic, both written by Willy Franzen at One Day, One Job, a site for post-college job hunters:

As far as I’m concerned, both articles are required reading for yourself and for any people between the ages of 16 and 30 you might know. The Landers Group is a company that operates under about a thousand different names, and runs a lot of these schemes.

Is it a true scam? No. Ultimately, it is a job, and I suppose if you sell a lot of coupons in The Worst Neighborhood In The Universe (or elsewhere—they don’t only stick to TWNITU), you might be able to make a few dollars.

Should you avoid it anyway? Yes, yes, and yes.

One more thing you should do: when young people come to your door selling coupons or magazines (“Mag Crews” are a whole other topic, not really fraud-related), be nice to them. They’re very probably stuck in a terrible job very far from home, with no money or way to get back.