Consumer With Tina Leonard; Working from home scam warning
Tuesday, 7 April 2009
With so many people losing their jobs during the recession, fraudsters will be looking at ways to cash in on this with various scams. Tina is pre-empting the kinds of scams that we will more than likely come across and how we can spot them and avoid being conned.
Tina Leonard, Consumer Expert
With many people on reduced work hours or having lost their jobs completely, you may spot an advert asking you to work from home and make good money. There are, of course, many legitimate 'work from home' schemes out there, but this is also an area ripe with fraudulent schemes, and in the current economic climate is a growing market for fraudsters. You could end up doing work for nothing or worse still, doing work and paying for it and getting nothing back.
The National Consumer Agency is advising people to be careful and to be on the look out for such scams, and have developed tips to enable you to spot the scam. For further information and advice go to www.consumerconnect.ie.
What is a job scam?
There could be many different types of adverts but all of them advertise working from home and their ultimate objective is to try to obtain money from you in return for a token of little value, or nothing at all. You should thoroughly research any work-from-home offer and not get involved unless you are 100% sure the business is legitimate. Remember the truism "if a job seems too good to be true, it probably is".
Where are the ads?
You could come across an advert anywhere; in a newspaper, magazine, a flyer, a pop-up message on the internet or an email. Remember that just because you see an advert in a reputable publication it doesn't necessarily mean that the person placing the ad has honorable intentions.
Types of Job Scams
Envelope stuffing' scheme
This is a classic scam where an ad offers work packing envelopes and aska you to forward a fee for the raw materials. When you respond to the advert with the fee, instead of getting materials to send out on behalf of a company, you get instructions to place an ad like the one you saw, asking people to send you money for information about the same work. This is an illegal pyramid scheme because there is no real product or service being offered. You won't get rich, and you could be prosecuted for fraud.
Making products and selling them back to the company
An advertisement offers you work putting products together, such as model kits or toy dolls, and selling them back to the company. In this case, while you do get the raw materials, when you return the completed product, you are often told there is no market for the product or that the work is defective. Either way you don't get paid and the company get their manufacturing done for free.
Also called postal forwarding, scam victims are typically offered an at-home job that involves repackaging goods, which may have been stolen, and forwarding them abroad. Scammers ask you to pay your own postal charges, and then repay them with a fake cheque. If you fall for reshipping scams you may be liable for shipping charges and possibly prosecution for fraud or handling stolen goods. To add insult to injury you have paid the postal costs as well.
An advance on your pay
This scam takes the form of an advertisement offering a work from home opportunity where you get paid an advance before you do any work. You generally receive a "payment" cheque as an advance payment and shortly afterwards you are notified you have been overpaid. You are also asked to send a cheque for the amount of the overpayment back to the "employer". By the time it becomes clear that the "payment" cheque has bounced, you may find that the cheque you sent back has been cashed. Victims in this situation are known as "money mules".
How to spot a job scam
1. The job advert asks for money to get a job: Would any employer ask for money to process an application?
2. The e-mail address is a free account: Free email accounts are provided by the likes of Yahoo, Hotmail and others. Usually a genuine company email account will have the format firstname.lastname@example.org.
3. You can't determine the nature of the job: These adverts are full of enthusiasm about income possibilities doing a job that requires little or no effort, but they never tell you what the job actually involves.
4. It guarantees an income: Legitimate employers advertise salaries, not "guaranteed income". Commission-based jobs make clear that monies are earned on an Opportunity To Earn (OTE) basis.
5. 'Earn €1000s weekly': Why would an employer offer you €1000s to do a job for which they could pay a minimum wage and keep the profit themselves?
6. 'It guarantees that you can make big profits easily': Operating a home-based business is just like any other business - it requires hard work, skill, good products or services and time to make a profit.
7. 'No skills or experience are necessary': There are very few jobs that require no skills or experience.
8. Know who you're dealing with: The company may not be offering to employ you directly, only to sell you training and materials and to find customers for your work.
9. Check References: If the advert contains references or testimonials from people who are already doing this work, ask for their details so that you can talk with them about their experiences. A reputable company shouldn't have a problem giving you this information
10. Get all the details: A legitimate company will be happy to give you information about exactly what you will be doing and for whom.