Con artists target folks desperate for work

Eileen Ambrose -- Personal Finance

February 23, 2010|By Eileen Ambrose | Baltimore Sun reporter

Con artists have the canny ability to home in on what we are most concerned about and then exploit it for their own gain. Right now, it's jobs.

Regulators are warning consumers about employment schemes that promise good-paying jobs or lucrative business opportunities, trying to tap into the desperation of the unemployed and underemployed.

The Federal Trade Commission last week announced "Operation Bottom Dollar," a federal and state crackdown on employment schemes. Regulators also launched an education program that enlists search engine Bing and employment sites to help job seekers spot fraud.

Complaints about business opportunities, employment agencies and work-at-home offers have been on the rise, according to the FTC. Last year, the agency received nearly 23,000 complaints, up 12.5 percent over the year before. Since spring, state and federal regulators have taken more than 70 actions against employment schemes. Maryland filed three of them.

"This is a huge issue right now because people are desperate for money," said Melanie Senter Lubin, Maryland's securities commissioner.

Schemes include guarantees of a job as a movie extra, mystery shopper or federal worker; work-at-home offers have targeted parents. One company promised people they could make money by mailing postcards, then sent them a guide on how to defraud others, said David C. Vladeck, director of the FTC's Bureau of Consumer Protection, during a news conference. "These scams can be tough to spot," he said.

Just ask Cathy Willburn, who responded last summer to an ad that promised a job paying up to $19 an hour with benefits. The Texas mother had been out of work for about nine months. The employment company guaranteed she would be working in 14 days. The catch: Willburn first needed to pay an $89 placement fee.

The company asked Willburn for her bank account information so it could withdraw the money faster and get her on the job sooner. Not long afterward, the company called and told Willburn her bank wouldn't allow the withdrawal and she needed to mail a check. She did.

Later when Willburn called to verify that the company received her resume, she reached a recorded message. Her calls were never returned. And her next bank statement revealed that the company had debited her account and cashed the check.

"I'm here today because I don't want this to happen to anybody else," said Willburn, speaking at the FTC news conference. "People are desperate for work, but you got people out there looking to take advantage."

Regulators won a judgment against the company, Career Hotline, and settled with its principal, but no money was left to make restitution, said the FTC's Monica Vaca.

"Con artists are very good at spending their money. They tend to spend it before we can get it," Vaca said.

It's often difficult for regulators to recoup lost money, which is why it's important to avoid frauds in the first place.

Beware of promotions that guarantee a job or promise an opportunity to make lots of money in a short time by working at home or through some other business opportunity. Also, legitimate companies won't ask you to pay for the promise of a job, regulators say.

Before responding to an employment opportunity, contact the FTC, the Better Business Bureau and your home state's attorney general's office to see if there have been any complaints about the company. Marylanders can call 410-576-6360.

To help consumers identify fraud, the FTC has produced education videos available on its Web site at And Bing, Monster, Craigslist and CareerBuilder have agreed to display the FTC educational materials when their sites are used by job seekers.

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