How to Protect Yourself from Job Scams

By Toni Vranjes

February 16, 2012

Unfortunately, there will always be scammers out there who try to lure you with promises of easy money. But there are ways to avoid falling victim to their deception.

Frank Dorman, a spokesman for the Federal Trade Commission, emphasizes that you never have to spend money to get a job. He offers this general advice: avoid money-making schemes that sound easy and cost you money.

If a job opportunity seems too good to be true, it probably is, says Sara Sutton Fell, CEO and founder of FlexJobs. Her site posts listings for flexible work, and it has strict procedures for screening employers to ensure they’re legitimate.

“Lots of job scams promise big money for little work, which is enticing at first, but really doesn’t make any sense when you think about it,” she observes.

Her advice: let the initial excitement pass, and then truly analyze the job to see what your gut is telling you.

“Does it seem too good to be true? If you have any doubt, my advice is to move along,” Fell says.

Also, she advises searching online for the company’s name or the job title, along with the words “scam” or “rip-off.” That will bring up reports of job seekers who were scammed.

She also suggests watching out for these other common signs of employment scams:

  • unsolicited job offers
  • job listings that don’t name the company
  • job descriptions that are poorly written or grammatically incorrect
  • the requirement to invest (for instance, in supplies or training) in order to get a job offer
  • jobs commonly associated with scams (data entry, pyramid marketing/sales, stuffing envelopes, assembling crafts/products, wire transfers/money movement, shipping/package management, rebate/forms processing)

Meanwhile, if you’re interested in buying a “business opportunity,” you also need to know how to protect yourself.

Business opportunities generally involve the sale of goods or services for the purpose of starting a business. They often are advertised on websites such as Franchise Gator, while some are still advertised in local newspapers, notes Michael S. Rosenthal, an attorney at Wagner, Johnston & Rosenthal who represents sellers.

Rosenthal offers the following tips for prospective buyers of business opportunities:

  • Ask a lot of questions, and make no assumptions.
  • Ask to speak with existing buyer/operators and try to get as much information as possible.
  • If the seller tells you little or no work is involved, you should be suspicious.
  • If you plan to invest a lot of money, buy a plane ticket or get in your car and visit the home office of the company. If they’re not comfortable having you at their office, there’s probably something wrong, he says.
  • Once you’re in their office, ask yourself: Is it a real business? Is everyone just involved in sales (as opposed to support functions)? Sales are okay, but if that’s all there is, you should be asking a lot more questions, he says.
  • If they promise you income or revenue at any specific level, ask to see all of the data that backs up the promise. They’re required by law to have all that data and to make it available to you.
  • In addition to the federal rule, 26 states have some type of disclosure requirement for business-opportunity sellers. Prospective buyers who live in one of those states should receive both federal and state disclosure documents. If you live in one of those 26 states, check if the seller has registered with the appropriate state agency. “If not, run, don’t walk to the exit,” Rosenthal advises.
  • Before you make a decision, speak with an attorney who is experienced in this area of practice.

Here’s more information from the FTC on avoiding scams:

Job Scams

Work-at-Home Scams

Business-Opportunity Scams

Bogus Business-Opportunity Offers

Starting an Internet Business

If you suspect fraud, you can file a complaint with the FTC.

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