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Scams & Schemes in Work and Employment Services


The Riley Guide: Before You Search

If you're looking for work, any job offer can seem tempting – especially if it claims to offer loads of money in return for hardly any work on your part. But as the old saying goes, "If it sounds too good to be true, it probably is." Scammers have spent decades perfecting their methods, and they often know just what to say to catch your attention. But even the cleverest scammers will eventually start throwing up red flags – asking for personal information or money to "start the process," for example – and signals like these are your signal that it's time to cut your losses and run. Read on to find out how to spot a scam as early as possible – and what you can do to help bring the scammer to justice.

Example Scam Alerts

The following two examples will give you some idea about common types of scams. The first scam example, which dates from October 22, 2009, deals with a scam operation that stole unemployed people's insurance benefits. The scammers sent text messages to these people's phones, claiming, "The Department of Labor has limited or deactivated your benefit card starting with (first 4-6 digits of card). Call: (various phone numbers) to reactivate." Gullible beneficiaries would then call the number in the text and provide info on their benefits and bank accounts, allowing the scammers to steal their funds. Although this hopefully goes without saying, never share your bank info with strangers, no matter how urgent they make it sound.

The second example dates from Feb 17, 2010, and concerns a group of con artists who specifically targeted unemployed Americans. Employees of the scam companies (whose names are listed in the article) cold-called with "empty promises that they can help people get jobs in the federal government, as movie extras, or as mystery shoppers; or make money working from their homes stuffing envelopes or assembling ornaments." These companies would then say that they needed a fee in order to start the process – which is always a major red flag – but even after the new workers did their jobs, promised paychecks never arrived. The Federal Trade Commission (FTC) cracked down on dozens of companies like this in a sweep operation.

If someone calls or texts to request your bank info, the overwhelming likelihood is that it's a scam…

The lesson to take from both these scam alerts is that you can't trust someone who won't (or can't) back up his or her claims with proof. If someone calls or texts to request your bank info, the overwhelming likelihood is that it's a scam – your bank already has this info, and the federal government will already have it in their system too, if you've provided it to them before. And if a job offer sounds too good to be true, it probably is – especially if the person offering it to you won't go into speifics about how the process works. Besides, any legitimate company will pay you for the work you do – not the other way around.

Research Resources

Knowing where to check up on a company that contacts you can make all the difference between getting scammed and staying safe. One of the simplest ways to find out who's who is to use a reverse phone directory to find the registered name and location of the number that called you. If you don't recognize the name, just plug it into Google to find out more about it.

Quite a few websites exist to track and report on scams, and to offer tips and support…

Quite a few websites exist to track and report on scams – some specifically in the U.S., and others in various other parts of the world. Many of these sites also offer tips and support for those who've been scammed, including advice on how to report a scam and see if you can get any of your money back. In the U.S., FakeChecks.org and ScamWarners.com are two of the largest online centers for fraud alerts. You can also check with the Internet Crime Complaint Center (IC3.gov), and with LooksTooGoodToBeTrue.com, to see if a suspicious-looking company has been reported.

non-US Resources for Fraud

Some other fraud sites focus on specific countries, while still others target cross-border complaints. Econsumer.gov allows consumers report complaints about online and related transactions with foreign companies. The site has been around since 2001, and has a well-established reputation for investigating fraud in 28 different countries. Meanwhile, Monitor das Fraudes focuses on fraud in Brazil, CIFAS and IdentityTheft.org.uk provide fraud prevention and intervention in the United Kingdom, ConsumerInformation.ca reports on fraud in Canada, and The Little Black Book of Scams offers Canadian and Australian editions of their scam lists.

Online Bulletin Boards

Quite a few websites offer information on scams, and may also allow you to post complaints about certain organizations – but not all of them can actually offer you any assistance. It's also important to be aware that some of the postings on these boards may not be due to fraudulent services or unethical behavior, but may just be someone venting anger about a company. That means you'll want to look for multiple complaints from several people, not a solo complaint from one person that's been posted on multiple sites. Consider the language used in each complaint, too. Does the person list specific services or products that weren't acceptable, or is the complaint just a mess of vague anger? Also, if someone posts rebuttals to the original complaint, be sure to read those as well.

Consider the language used in each complaint, as well as its context…

All that said, the following websites provide public forums for company complaints. Report-Online-Scams.com provides one of the largest online centers for Internet-based fraud; while ScamWarners.com, Scambusters.org, Consumerist.com and RipOffReport.com gather and report complaints about all kinds of fraudulent and poorly run companies, online and off. Though these sites tend to focus on English-speaking countries, they report scams and other fraud from companies all over the world. As mentioned above, though, use your common sense as you browse sites like these – many complaints come from bitter people who had a single bad experience, so be sure to take the context of each complaint into account as you read it.

Some Specific Employment Scams You Might See

Scams and rip-off schemes are becoming more bold and innovative all the time, and they're infiltrating more and more areas of life – so this section is divided into specific topics, each covering a particular type of scam or fraud.

Job Offers | Work-at-Home Scams | "We Need Your Credit Report" | Payment-Forwarding / Reshipping | Executive Marketing / Employment Services | Filing Unemployment Claims

Job Offers

Some of the most common fake job offers involve money laundering: A stranger will contact you and claim that he or she needs to transfer a large sum of money into your country – and you can have a percentage of it if you provide your bank account info and agree to host the transaction. You might recognize these as the infamous "Nigerian prince" scams – but the fact is, even if the person making the offer doesn't make any outrageous claims about royal status, you should never trust anyone who asks for your personal info or asks you to transfer money on his or her behalf.

Demanding any personal info or money from you in order to "process your application" is always a big red flag…

Along similar lines, some scammers may promise an international job but ask for a scan of your passport in order to "start the application process." But as the international recruiter in this article says, "I do not ask for a scan of the candidate's passport until I have interviewed him or her and extended an actual job offer." So, as with your Social Security Number, you should never share your passport number – much less a scan of the document – until you have an actual job offer in hand. The same goes for companies that demand any personal info or money from you in order to "process your application." This is always a big red flag, no matter how well-intentioned the person sounds.

Work-at-Home Scams

The Internet overflows with tempting offers to "get rich working from home," but almost none of these jobs (if any) will earn you serious income – and many of them will try to steal your time and/or money outright. As this article points out, most of these companies will simply charge you for training materials and then fail to provide any paying work. Others may offer you an "advance" on your first month's pay, which turns out to be a loan with an absurdly high interest rate – or maybe just a check that bounces, leaving you to pay the bank fees.

Nobody in the world is making $5,000 a week solely by stuffing envelopes or processing insurance claims…

Thus, it's crucial to do some background research on any online job offer you're considering. A simple Google search for the company's name will often be enough to turn up negative reviews – as will a few minutes spent on some of the complaint sites mentioned in the previous section of this article. Also, if the company mentions any specifics about their customer base (for example, envelope-stuffing for real estate agents), it's worth your while to ask people in that field whether they or anyone they know actually uses that kind of service. And, as always, beware of any offer that sounds too good to be true, or that asks money from you in order to "start the process." It's possible to earn a modest income from honest online work, sure – but nobody in the world is making $5,000 a week solely by stuffing envelopes or processing insurance claims.

"We Need Your Credit Report"

One newer way in which identity thieves try to get your personal info (and your money) is to ask for a copy of your credit report as part of your job application, and "require" that you get it from a specific website to which they direct you. While many employers do conduct credit checks as part of the application process, they perform these checks themselves – and they don't have access to your full credit report; only to certain information from it. It's common for employers to ask for your full name, your date of birth and your social security number in order to check your credit – but it's illegal for an employer to ask for any credit-related info beyond this. So guard your personal info carefully, and only provide your date of birth or social security number to employers who you feel confident are trustworthy.

Payment-Forwarding / Reshipping

As this article from the Better Business Bureau (BBB) says, "Two BBBs have recently issued warnings about work-at-home scams offering work that involves shipping packages overseas. The first scam is to be a 'gift wrapper' for Best Buy; the second, to be a 'mail manager' for an online company." The truth is, though, that any job that requires you to ship items to another country is a scam – as is any job offer that requires your bank or PayPal account information, or that asks you to transfer money from your bank account.

Any job that requires you to ship items to another country is a scam…

Though many legitimate employers do offer to send you paychecks via direct deposit, you should only provide your bank information after you've already worked with the company and become certain they're trustworthy in this regard. And as soon as you discover that a company has abused your bank info, close that bank account immediately, alert the bank about the fraud, and file a report with your local police force, as well as with the BBB.

Executive Marketing / Employment Services

Legitimate staffing agencies make money from employers who hire their candidates – not from the candidates themselves.

A growing number of scammers are posing as headhunters and recruiters, promising to find you a job in exchange for payment. This is always a red flag, because any legitimate staffing agency makes its money by commission from employers who hire their candidates – not from the candidates themselves. As the scam victim in this article recalls, "I paid [the recruiter] the sum of $10,800 one year ago in exchange for what I was told was the inside track to 'un-advertised jobs,' their 'connections,' and their assistance in putting me in front of individuals who had 'hiring authority' at the CFO or higher level… [But] in short, they did little more than take my money." Always ask for references from any headhunter or recruiting agency – and follow up on them. And if the agency asks from money from you at any point, end the conversation then and there. No trustworthy agency behaves this way.

Filing Unemployment Claims

Don't be fooled by anyone who asks for payment in order to help you file an unemployment application…

Unless you've applied for and been denied unemployment support, you don't have to pay anyone to help you file for this insurance program. All state websites in the U.S. provide free information about unemployment insurance benefits, and provides links to complete benefit applications online. Here are links to every state's unemployment insurance information, including DC, Puerto Rico, and The US Virgin Islands. Although some organizations do provide unemployment application assistance for free as a public service, don't be fooled by anyone who asks for payment in order to provide this service – it's simply an attempt to rip you off.

How to Find a Good Career Management Firm

Good career management consulting firms do not "sell" you. They help you to identify your strengths, overcome your weaknesses, explore your needs, wants, and values, and determine your path in your life and career. Then they help you create and implement a plan to achieve your goals.

You may find firms that are problematic among this group, so here are some tips to help you avoid trouble…

You can find this kind of assistance in several places. Firms that offer what's called "retail outplacement," meaning they're paid by the job seeker to help with these factors, are one source. (Although, as explained in the previous section of this article, no legitimate recruiter will demand money from you in return for finding you a job, as legitimate staffing firms make money from employers who hire their candidates, rather than from the candidates themselves.) Some firms also offer career management, career consulting, or career coaching. Even career counselors can be helpful. For more info on services like these, check out The Riley Guide's page on Executive Job Search & Career Management Advice. However, you may still find firms that are problematic among this group, so here are some tips to help you avoid trouble.

If they "guarantee" they will find you a job or you will find a job by using their services, thank them and leave.
Legitimate career management services know that 1) they can't guarantee you will be successful in your search, and that 2) it's not their job to find you a new job; it's your job. Their purpose is to educate you in the best ways to find a new position, to offer you the access to information and administrative services you need to assist you in your search, and to provide you with the support system necessary to keep you in the right frame of mind while you search (emotional support plus networking with the other clients).
If they claim to have direct access to a "hidden" job market, thank them and leave.
Legitimate career management firms usually have good connections with local employers, but they don't have access to any "hidden job market," and they won't tell you that they do. They may be able to assist you with introductions and connections, but they won't claim to have anything more than that.
If they only have one package and price, thank them and leave.
Legitimate career management firms know that each individual has different needs, and they won't try to push you into buying a standard package of services. Most firms offer their services individually or in bundles, but they'll help you determine what services you need – and can afford – without pressuring you into spending big bucks.
If they must have your decision right away, and they "need a check now," run!
What's the rush? You're already stressed, and you don't need to make a decision right now. You can afford to take a day or two to think it over. Legitimate firms know this, and they're willing to wait for your decision.
If they contact you after finding your resume online, avoid them like the plague!
This is known as "ambulance-chasing." Legitimate career management firms do not scrounge client leads by scanning online resumes. You contact them – they don't chase you when you're down.


The Riley Guide's page for Counseling, Coaching, and Mentoring lists a few associations who certify career counselors, career and/or life coaches, and career management professionals. Each of these associations provides a free searchable directory of members who you can use to help find the services you need. Each of them has a code of ethics that their members must agree to uphold, along with ways to file complaints if these codes are violated. Stick with firms like these and you'll avoid a lot of problems.

Identity Theft

This article provides a sobering look at what can happen if you submit to an identity check from an untrustworthy employer: "It was just the job lead Jim needed: a marketing manager position with Arthur Gallagher, a leading international insurance broker. And only days after Jim responded to the job posting on Monster.com, a human resources director sent along a promising e-mail. 'We're interested in you,' the note said. 'The salary is negotiable, the clients big. In fact, the clients are so valuable and sensitive that you'll have to submit to a background check as part of the interview process.' Eager for work, Jim complied – and sent off just about every key to his digital identity, including his age, height, weight, Social Security number, bank account numbers, even his mother's maiden name. It was all just an elaborate identity theft scam designed to prey on the most vulnerable potential victims – the increasing ranks of the unemployed."

Never give out your Social Security number to any employer before an interview.

How can you, as a job seeker, protect yourself from this kind of fraud?

    • Never give out your Social Security number to any employer before an interview. Never give them credit card numbers or bank account numbers either, even for a credit check – because they're not necessary for a credit check. The Identity Theft Center reports that it has "heard about several instances where a person placed a 'help wanted' ad – either on the Internet or in a newspaper – and collected SSNs that way." Their advice: "If you send a resume and they reply asking for a SSN prior to an interview, kindly refuse, explaining that you will provide it at the interview itself. Then check the company out with the Better Business Bureau in that area. Make sure it is a legitimate company prior to releasing information." Also, call the company to make sure the job offer in the advertisement is legitimate. When you do this, look up their number via a third party, such as a phone book or search engine – don't take it from the website or email.
Call the company to make sure the job offer in the advertisement is legitimate…
  • Watch for warning flags in the email received. Like many scams, the messages involved in these fraud attempts included spelling errors and grammatical mistakes. In addition, the supposed "HR Director" requested a reply to a personal e-mail address. Any legitimate corporate correspondence should be going through corporate email, and will be checked for spelling and grammar mistakes.

What if an employer asks to do a background check before you even interview?

This isn't actually legal – not in the least. To prescreen using background check information is illegal, because it may allow a company to use protected information to deny some candidates the opportunity of employment (i.e. income, criminal history, marital status, etc.). Be extremely wary of any pre-interview request for this information – especially your credit card information.

Even after a legitimate company extends a job offer, they won't request these types of private information. They'll ask for your social security number, your driver's license number, and your date of birth, and send this info to their verification company, along with a signed Fair Credit Reporting Act (FCRA) release. The verification company then does all the checking for them, and sends them a report.

There's no reason for a company to perform a credit check unless the position requires one…

Plus, there's no reason for a company to perform a credit check unless the position requires one (e.g., a bank position, a financial or accounting position, a multi-million dollar project, etc.) – and there's no logical reason for any company to background-check a person before an interview is even scheduled. Some may send an application and FCRA release to the candidate after the interview is scheduled, with a request to complete the forms and bring them to the interview, as this saves a little snail-mail time waiting for the FCRA form to go out and come back. But even in that case, you'll only hand over the forms when you're actually offered the position – and you can shred them otherwise.

In short, most legitimate job offers won't involve a credit check at all; and if a company does require one, it should happen relatively late in the screening process, just before you actually receive the job offer – not during the initial interview, or at any time before you've been told about the position in detail. For more information, you can review The Riley Guide's information on Credit Reports & Background Checks, under the Legal Issues in Employment & Hiring section of the site.

Work-at-Home Scams

These kinds of scams have been around for decades – and they keep popping up because gullible job-seekers keep falling for them. They offer a supposedly easy way to make loads of money in just a little time, from the privacy of your own home – but they rarely ever turn out to be what they claim to be. As this article from the BBB says, "Work-at-home businesses consistently generate the most inquiries received by the Better Business Bureaus. Of complaints received on the Better Business Bureau's on-line complaint service, 20% relate to work-at-home schemes or business opportunity on-line promotions."

Take time to read any paperwork sent to you by the company before you sign on the dotted line…

This means it's crucial to keep your wits about you as you consider potential job openings – particularly when it comes to work-at-home offerings. Take time to read that BBB article, as well as any paperwork sent to you by the company, before you sign on the dotted line or commit any money to any work-at-home opportunity. If any company demands access to your bank account or personal info, or states that you have to pay for information or supplies to get started, run away fast.

File a Complaint!

The good news is that several federal agencies exist to investigate and crack down on scams – and they'd be very interested to hear your fraud complaint. The U.S. Federal Trade Commission (FTC) enforces a variety of federal antitrust and consumer protection laws, and also works to eliminate trade acts or practices that are unfair or deceptive. While the FTC does not resolve individual consumer problems, your complaint can still help them investigate fraud, and can lead to law enforcement action. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into their Consumer Sentinel Network, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

Several federal agencies would be very interested to investigate your fraud complaint…

The Internet Crime Complaint Center (IC3), meanwhile, provides "a vehicle for victims around the country to report incidents of fraud online." Users like you can provide details on specific cases of Internet fraud, and each complaint is carefully reviewed and referred to a law enforcement or regulatory agency for further investigation. Along with the online complaint form, the IC3's site also contains basic information about how the Center works to protect consumers.

In addition to these government agencies, the Better Business Bureau investigates fraud complaints and posts the results on their website, while the National Association of Attorneys General provides contact info for the offices of attorneys general in all 50 U.S. states, to help you file a complaint in court or find out about class-action lawsuits against a company that's defrauded you.

If you've been a victim of fraud, you'll want to file a complaint with agencies like these, as well as with any state or county Consumer Affairs agency you can find. You can easily locate these agencies using the list of Index of State and Local Consumer Agencies at USA.gov. Remember, if you're filing a complaint against a scammer who isn't in your city or state, you'll need to file the complaint in that person's or company's city and state. Most states are alarmed to find out fraudulent companies and individuals are operating within their borders, and are very open to helping you. To save time, call before sending a written complaint, to ask if the office handles the type of complaint you have, and if they provide complaint forms for you to fill out. This will get the investigation process started more quickly.

Helpful links

ScamWarners.com — Lots of info on online scams, including tips on how to avoid them and a public forum for reporting them.

Ripoff Report — A comprehensive database of scam complaints, as well as a form for sharing your own story in public.

The Internet Crime Complaint Center (IC3) Complaint Form — File a fraud complaint online to help this federal agency start an investigation.

The Better Business Bureau (BBB) Complaint Form — Start a complaint investigation with the BBB, which may "out" the fraudulent company in public.

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