Spending and Saving

Career Scams to Avoid

As if the whole sub-prime mortgage debacle wasn’t scam enough, schemers have been out in fuller force since the recession began. According to the FBI’s Internet Crime Complaint Center, there was a 33 percent uptick in scams last year.

Companies billing themselves as “career marketing specialists” have started specifically targeting professionals and managers in recent months, for example, capitalizing on the massive number of laid off executives looking for work anywhere they can.

To make matters worse, consumer advocates report that the sheer number of people working as scammers is on the rise, since an increasing number of unemployed workers are turning to identity theft and other money-making schemes as an additional source of income during the downturn.

Of course, the best protection against recession scammers is knowing what game they’re trying to pull.

Career Assistance

A number of companies billing themselves as career managers or marketers have started reaching out to job seekers who’ve posted their resumes online and offering “career assistance”—usually in the form of finding open positions, editing resumes and cover letters, and giving career advice—for a substantial up-front fee. Unfortunately, many fail to come through on their promises of help once the client’s check has been cashed. Experts advise that even the companies that do come through with marginal assistance are usually doing so at a cost that is much higher than their advice is actually worth. [See, also, “colleges” that don’t actually provide a liberal-arts education.]

Homeowners should be extremely wary of anyone soliciting money in exchange for the promise of helping with their mortgage.

Avoid It: Since the majority of fraudulent career marketers find clients through unsolicited emails or by placing ads disguised as job postings on career websites, it is best to avoid responding to any agency that contacts you randomly or asks for an up-front fee. Instead, job seekers looking for legitimate career managers should do their own homework to find well-regarded marketers with a solid track record.

Foreclosure Rescues

The number of foreclosure scams has exploded since the recession began, so much so that the Obama administration has gotten involved. Although specifics of the scam can vary, these generally revolve around a fraudulent “loan modification” company contacting a homeowner and offering to save his or her home from foreclosure. All the homeowner has to do, according to the scammer, is pay a large up-front fee or sign over the title of their home to the company.

Avoid It: Homeowners should be extremely wary of anyone soliciting money in exchange for the promise of helping with their mortgage. Additionally, the U.S. Department of the Treasury advises staying in close contact with your personal mortgage lender for all information on loan modifications or foreclosure, rather than speaking with an outside company.

Work from Home

Capitalizing on the increased interest in earning extra money by working from home during the recession (especially among those who have no choice), a number of work-at-home scams have sprung up in recent months. According to a survey commissioned by the National Consumers League, 31 percent of respondents said they were “more likely” to start a home-based business in the current economy—due in large part to the lack of employment opportunities outside of the home. Whether the supposed job is stuffing envelopes, medical transcription, making craftwork, or the infamous Google Money Tree—which claims to show entrepreneurs how to make money from Google in exchange for a fee and which the FTC announced plans to crack down on this summer—the basic scheme remains the same: Job seekers agree to spend a small amount of money to get started working from home, but later find a much larger charge, usually billed as a “membership” fee, on their credit card. Needless to say, the supposed career opportunities never manage to materialize.

Avoid It: Job seekers interested in working from home should be skeptical of any company asking for any up-front fee, no matter what the supposed career opportunity. Additionally, companies with overseas addresses, vague job descriptions, or sketchy-looking business websites should be avoided as well.

Fake Checks

It is impossible to compile any list of recession scams without mentioning fake checks, which have plagued consumers as the No. 1 internet and telemarketing scam for years. In just the first six months of 2009, complaints to the National Consumers League about fake checks increased by 4.13 percent. The concept of a fake check scam is nearly always the same, as it involves cashing a check or money order from someone you don’t know and wiring the money back for a supposedly substantial fee. Within a matter of days, the bank inevitably discovers that the check was a fraud and it is the person who unwittingly cashed it who gets stuck paying the amount back to the bank.

Avoid It: Consumers should never agree to cash a check or money order for someone with the intent of wiring the money somewhere else, no matter what the promised reward.

Finally, no matter what the fraud may be, the California Society of CPAs offers a few easy steps to avoid getting scammed. They include Googling the name of the company or person in question along with the word “complaint,” using the Better Business Bureau’s website to research a company’s rating, and keeping in mind that any deals that seem too good to be true, probably are.

Tags: jobs, scams, Spending and Saving