A recent study by the Better Business Bureau (BBB) finds that employment scams were the #1 riskiest scam in 2018 and 2019, according to the BBB Risk Index, which measures exposure, susceptibility, and monetary loss based on reports to BBB Scam Tracker. Nearly three-quarters of those who lose money to employment scams are already in financial crisis, and do not have enough income to cover their monthly bills. More than half (53 percent) reported being unemployed at the time of the encounter.
Now, the COVID-19 pandemic has forced the shut-down of businesses across North America. Hundreds of thousands who lost their jobs began seeking new jobs via online platforms and other means. In response, BBB launched a new research project to better understand how employments scams are being perpetrated, who is being targeted, the overall impact of these scams, and how to help people avoid losing money to them.
“We were not surprised to discover that more than half of scam targets were seeking work-from-home opportunities,” said BBB President Dick Eppstein. “As more people search for flexible employment opportunities following the coronavirus outbreak, they need to know that scammers are out there in force and targeting those most in need.”
The BBB Employment Scams Report examines findings from an April 2020 survey of 10,670 U.S. and Canadian consumers reporting employment scams to BBB Scam Tracker. One surprising finding is that sixty-five percent of consumers reported that their “job offer” was related to becoming a “warehouse redistribution coordinator” or some similar titles involving the reshipment of packages (which often involve stolen goods). In many cases, these scammers impersonated well-known retailers like Amazon and Walmart to seem legitimate, posting jobs on major online employment platforms with few prerequisites or requirements.
A second major scam involves advertised job offers as a “secret shopper” or home worker where the “employer” sends a check for thousands of dollars to the applicant, telling her/him that they should deposit the check in the bank, then withdraw more than $1,000 and buy gift cards or send the money to a different address to pay shipping or other expenses. The checks are usually counterfeit and the job applicant ends up being forced to repay the bank.
The BBB report also highlights those who are most at risk for employment scams. Students and individuals ages 25-34 were more susceptible and likely to be victimized, while those ages 45-54 and 65+ reported higher median dollar losses. In addition, military spouses and veterans were more likely to fall victim than non-military consumers and reported losing significantly more money to employment scams. For every victim who lost money, at least one other worked without pay, and yet another lost personal information that could lead to identity theft.
Consumer education is a critical component of fighting back against these scammers. Those who avoided losing money were much more likely to report previous knowledge of employment scams and tactics (20 percent versus 7 percent). The full report is available at: https://www.bbb.org/employmentscams
