Looking for a new job? You may need to add fraud protection to your search and application process.
From 2019 to 2023, reported cases of “business and employment opportunity” fraud nearly tripled, from approximately 38,000 to 107,000, according to the Federal Trade Commission (FTC). These numbers might seem small considering the number of people applying for jobs in any given year, but last year they totaled a total loss of $490.7 million, the third-highest loss among all fraud categories.
Experts say the shift to remote working, as well as greater access to newer technologies such as cryptocurrencies and artificial intelligence, has created new opportunities for scammers. More recently, large-scale corporate layoffs make it difficult for some candidates to resist the promise of a well-paying job, according to Brittany Allen, a trust and security architect at Sift, a fraud prevention company.
“Employment scams generally increase in prevalence when there are layoffs or a high unemployment rate. People are so desperate for jobs that they’re willing to look past some red flags,” Allen says. “There are so many layoffs making headlines every week, so I’m not surprised they’re increasing.”
Employment scams can come in many forms. One of the most common types are fake job offers from individuals attempting to steal your information, potentially to obtain lines of credit in your name. Another popular type involves scammers asking for upfront payment for professional training or equipment that isn’t real.
Here’s what you need to know about employment fraud and how to avoid it at every stage of your job search, from applying to background checks:
Types of employment scams in 2024
The way scammers take advantage of people with employment schemes has changed in recent years. In 2021, victims of this type of fraud were most commonly contacted via text message. When it came to payment, the best method was bank transfer.
Over the past two years, email scams have been the most popular and cryptocurrencies are the new main payment method.
Employment scam perpetrators often create fake online job postings to collect personally identifiable information such as Social Security numbers and bank account information. Reliable job boards try to filter out fake job postings, but some things get out of hand.
“Scammers are then able to take that information and resell it, or use it to open lines of credit in victims’ names,” Allen says.
A second category of employment scams requires payment to job seekers in exchange for promised services.
An example of this type of scam involves background checks. A scammer may contact you about a fake job opportunity and ask you to pay a few hundred dollars for a background check (this is also fake). From there, these scams can skyrocket as the victim is asked for an additional payment to remove negative items that would have been found in the background check.
“The scammer might say we found something really strange or upsetting during your background check, but don’t worry, we work with an agency – pay us another $300 and we’ll fix it,” Allen says.
Some victims of these scams can end up paying thousands of dollars to the wrong people. According to FTC data, the average reported loss in a business and employment scam was about $2,100 last year.
How to spot employment scams
There are several classic signs of an employment scam, even if they evolve in sophistication. Understanding how to spot them will help protect you from identity theft and other fraud.
First of all, be skeptical of any job opportunity you come across online that seems suspiciously easy or profitable. This includes jobs that say they will pay you upfront before any work is performed, as well as ads that promise high pay with minimal hiring requirements.
Be sure to research the hiring company and read reviews online. You should include keywords like “scam” in your searches to see if there are any complaints about the supposed hiring company.
Fake job ads are often designed to collect your personal information, so it’s a bad sign if you’re forced to share a lot of that information before you’ve even spoken to a company representative.
“Scammers may ask applicants to provide their Social Security number under the impression they are setting up a direct deposit, jeopardizing their identity and their bank accounts,” Zulfikar Ramzan, chief scientist and executive vice president of product and development at digital security company Aura said in an email.
Remember that candidates rarely have to pay to apply for a job or pre-employment training. If someone asks you to send a payment as part of a request, stop what you are doing immediately.
You should also watch out for suspicious messages on job sites, social media and messaging apps from recruiters who may be posing as representatives of large companies. Allen notes that recruiters at publicly traded companies typically have thousands of LinkedIn connections, so if you get a message from someone with only a handful of followers, it’s probably fake. Block or report the account.
Additionally, legitimate recruiters typically contact candidates from their work accounts, which means the company’s domain name is in the email address. If you receive a message from a recruiter that appears to be from a personal email address, it may be fake.
What to do if you fall for a scam at work
The first thing to do if you are the victim of a scam at work? Check your credit report. If your identity has been stolen, someone could open lines of credit in your name.
This activity will soon appear in your file, and you can monitor it by pulling free weekly copies of your credit reports from the three major credit reporting agencies. You will need to dispute any fake items displayed. Another option is to consider freezing your credit, which will prevent criminals from accessing your credit file and opening accounts.
“If you are a victim of workplace identity theft, you need to take immediate action to prevent further harm,” Ramzan said.
In addition to the steps mentioned, you should monitor your bank accounts and report any suspicious activity, experts say. Victims of these scams should also file reports with the Federal Trade Commission and, in some cases, local law enforcement.
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