Job seekers who use online job search web sites must be careful to avoid a type of job scam in which the applicant is asked to accept payment to his or her own bank account. These are known as payment-forwarding or payment-transfer scams.
Payment-transfer scams involve a con artist who pretends to be an employer. The con artist uses a job ad to lure an unsuspecting job seeker, or they may use information from a resume they have found online. Such con artists can be quite convincing, and may even steal company names and corporate logos to convince victims that they are legitimate employers.
After the con artist has won the job seeker's trust, the con artist tricks the job seeker into giving up bank account numbers. The reasons given for this can be clever. One ploy is to tell the job seeker they can only deliver paychecks by "direct deposit.
"The "job" a job seeker will be asked to do involves forwarding or wiring money from a personal bank account, a PayPal account, or from Western Union to another account. The other account is often overseas. As part of their pay, the job seeker is instructed to keep a small percentage of the money as their payment. Sometimes the payment for making the money transfer is as low as $15. Sometimes it is as high as several hundred or several thousand dollars. Almost always, the money the victims are transferring is stolen, and therefore, the victims are committing theft and wire fraud. Usually, this kind of scam involves at least two or three victims.
There are many variations of payment-forwarding scams. Following are very simple tips that will go far to protect you from falling victim with some clarifications noted below. Again, this scam can be quite clever and refined.
- Do not give personal bank account, PayPal account, or credit card numbers to an employer.
- Do not agree to have funds or paychecks direct deposited to any of your accounts by a new employer.
- Do not forward, transfer, or "wire" money to an employer.
- Do not transfer money and retain a portion for payment.
Legitimate employers do not usually need your bank account numbers. While direct deposit of a paycheck is a convenience, if that is the only option an employer offers, then you should not accept the job. A legitimate employer will give you the option of direct deposit, but not demand that it is used. You should wait until you have met the employer in person before agreeing to a direct deposit option.
There is one exception to this: the U.S. government typically does require that employees agree to direct deposit. If you have been interviewed in person, and you are sure that you are dealing with a government agency, then agreeing to direct deposit is not a problem. Also, if you have been working for an employer for a while and you are very sure about their legitimacy, then agreeing to a direct deposit is usually fine. This is especially true if you have received a number of paychecks from the employer and you have met the employer in person. "Work from home" and telecommuting jobs are most at risk when agreeing to direct deposit, especially from brand new employers. Use caution and good sense.
Regarding payment transfers, while some jobs may require an employee to make transfers for employers, legitimate employers making this request will go to extraordinary efforts to check the job seeker prior to making the hire. This would involve meeting the jobseeker in person and conducting rigorous interviews. This kind of job hire would not be made via email or even the telephone or a single meeting. And a legitimate employer would typically ask you to make transfers from their business accounts, not yours. You need to draw a line and understand that transferring money for employers from your personal bank account or personal PayPal account is off-limits, period.
Known Red Flags
Payment-forwarding scams contain certain "red-flags" that should alert you to fraudulent job ads. Here are the known red flags:
- Request for bank account numbers.
- Request for Social Security number (SSN).
- Request to "scan the ID" of a job seeker, for example, a drivers' license. Scam artists will say they need to
scan job seekers' IDs to "verify identity." This is not a legitimate request. - A contact email address that is not a primary domain. For example, an employer calling itself "Omega Inc." with a Yahoo! email address.
- Misspellings and grammatical mistakes in the job ad.
- Monster.com lists descriptive words in job postings that are tip-offs to fraud. Their list includes "package-forwarding," "money transfers," "wiring funds," "eBay," and "PayPal." World Privacy Forum researchers also found that the terms "Foreign Agent Agreement" often appears in contracts and emails sent to job seekers.
Online job scammers steal millions
Catherine, a recruiting specialist, was out of work for nearly a year when a friend sent her a job opening listed at Vault.com. Ready to try almost anything, she quickly responded to the ad and e-mailed her resume, applying for a position as "correspondence manager."
And just that quickly, she became an unwitting member of an Internet scam that's being blamed for a half billion dollars in attempted thefts from U.S. firms during the past 18 months. The crime has Internet merchants, along with the FBI and U.S. Postal Inspection Office, fit to be tied. Within days, before Catherine even knew she had been hired, packages containing a digital camera and a computer monitor arrived at her door. Her instructions were simple: repack the items and ship them to an address in Russia. For her trouble, she would earn 13 percent of the sale price. It seemed reasonable enough, so she sent the package along.
Days later, she got a phone call from a man who said he was told to wire $10,000 into her bank account.
"I had no idea what he was talking about," she said.
Her caller was an eBay.com user, who had recently won the bidding for a classic electric guitar and then been told to wire the large payment to Catherine. She was then instructed to move the money overseas, to an account controlled by her new boss.
Catherine knew right away something was terribly wrong. She called the FBI, which informed her that she'd unknowingly helped a global crime ring. An agent then told her the FBI had an ongoing investigation into the crime ring, and asked that she "play along" with the con artists for a while in an attempt to unearth more information about them.
Within a week, dozens of packages and wire transfers were headed Catherine's way — some $35,000 in money and merchandise in less than 10 days.
"These people are very, very organized." she said.
Out of control Catherine had unwittingly signed up to be part of a new scam that's raging on the Internet, dubbed "postal forwarding," or "reshipping fraud" by the U.S. Postal Inspection Service. According to authorities, thousands of job seekers have been caught up in the con.
"It's out of control," Barry Mew, spokesman for the Postal Inspection Service, said. "My phone rings off the hook. ... There are hundreds more like (Catherine)."
At best guess, Mew said, the con artists have already made off with between $5 million and $10 million. One major credit card company has seen losses of $1.5 million to the scam, and a payment processing company for an Internet site is out $1 million, he said. Mew declined to name the companies.
Some of the recruited helpers are losing big money, too, Mew said. One woman passed on $25,000 to Eastern Europe before she caught on to the con. When one of the victims who sent money to her stopped payment on his $2,500 check, his bank withdrew the money from her account — leaving her with a $2,500 loss. She had to sell a mutual fund devoted to her child's college education fund to cover the loss, Mew said.
FBI spokesman Paul Bresson said he couldn't comment on specific investigations, but that the agency did have ongoing investigations into reshipping frauds.
"This is something we are familiar with," he said.
During a sweep of Internet-related arrests announced last month by the FBI, the agency issued a warning about reshipping schemes. As part of that warning, the Merchant Risk Council, a non-profit organization created by a consortium of electronic commerce firms, released the results of a 120-day study of fraud at the top eight Web retailers.
The council found 5,000 consumers had participated in the scam from July to October, enabling con artists to steal $1.7 million from those eight sites during that 120-day period. A host of other fraud attempts were stopped by the sites. Total attempts to steal merchandise using the reshipping scam add up to an estimated $500 million, said Susan Henson, spokeswoman for the Merchant Risk Council.
"This is a huge crime," Henson said. "It's phenomenal. It's been hovering under the radar a bit, but it's giant."
The elaborate scam is a mixture of credit card fraud, identity theft, and auction fraud. The Net of victims is wide, ranging from eBay auction winners, to credit card firms, to major online retailers. Catherine said she received packages purchased from Amazon.com with stolen credit cards.
Amazon spokeswoman Patty Smith denied the scam had hit online retailer very hard.
"This really isn't a big issue for us," she said. "Our fraud detection systems are sophisticated enough ... to catch these kinds of things."
But Jonathan Lane, a fraud investigator for online retailer PCMall.com, said major Internet retailers are indeed being hit by the scam.
"There's a substantial number of merchants involved," Lane said.
Ads all over the Web It starts with hundreds of recruiting advertisements on job sites like Monster.com and CareerBuilder.com. At any given time, Mew said, he can spot ads on 25 different Web sites. Other victims have been approached in Internet chat rooms and pointed directly to the fraudulent company's Web site, where the job postings are listed.
