Job scams proliferate by offering easy pay
Those desperate to make money fall for swindlers’ schemes
Sunday, October 31, 2010 03:00 AM
By Stuart Pfeifer
LOS ANGELES TIMES
LOS ANGELES — A weak labor market is hurting the U.S. recovery, but it’s been lucrative for scammers, who are bilking unemployed workers out of millions of dollars in fees to steer clients to jobs that never materialize, watchdogs say.
Many of these schemes have been around for years, promising people who send money a chance to work as bartenders, home inspectors or “secret shoppers” for retail chains.
But with nearly 15,million Americans out of work, consumer groups and law-enforcement agencies say these scams are multiplying as con artists capitalize on the misery of the unemployed.
“It’s an epidemic. It’s opportunity time for fraud artists, and people are so desperate to earn a living that they easily fall for the scam,” said Ellyn Lindsay, an assistant U.S. attorney in Los Angeles who has prosecuted several of these swindlers.
Although federal authorities don’t keep statistics on employment-related fraud incidents, the Better Business Bureau says such cases are on the rise.
The bureau received nearly 3,000 complaints about work-from-home scams in the first eight months of this year. That’s more than double the 1,200 it received in the same period in 2007, just before the recession began, said Alison Southwick, spokeswoman for the Council of Better Business Bureaus.
Ida Jimenez, an unemployed mother of four from Fontana, Calif., said her attempt to work from home cost her $200 she couldn’t afford to lose. It all started with an unsolicited e-mail: “If you have 60 minutes a day, here’s a certified, proven and guaranteed way to make $225 and more every day, the easy way — from home!”
There was just one catch: She had to pay $197 for a guide before she could start processing manufacturer rebates from home. It seemed like such a good opportunity. After all, somebody has to do the paperwork on those things, she figured. Jimenez cut back on grocery purchases until she’d saved enough money to get started.
The guide never arrived. Jimenez spent weeks pursuing a refund, then gave up.
Crooks are counting on it. In contrast to investment fraudsters, who often seek big money from a small number of victims, job scammers aim to fleece large numbers of people for small amounts. Their hope is that victims won’t squawk over modest sums, allowing the schemes to grow, undetected by authorities. The unemployed are particularly inviting targets because they have few resources to fight back.
The scammers “don’t think they can possibly get caught because the victims they target generally don’t have a voice: poor people, old people, people who don’t speak English so well,” said Lindsay, the federal prosecutor. “It’s really nasty. These are not people who can afford this in the first place.”
Stevan P. Todorovic siphoned $6.1 million from 80,000 job-seekers — that’s about $75 a head — before being busted by federal law enforcement in 2008. The U.S. attorney’s office in Los Angeles accused the Santa Ynez, Calif., resident of promising nonexistent bartending and secret-shopper jobs to customers who paid for unnecessary certification. A federal jury in Los Angeles convicted Todorovic in July on seven counts of wire fraud and three counts of mail fraud.
He’s scheduled to be sentenced March 21. The charges carry a maximum sentence of 200 years in prison.
But such criminal prosecutions are rare. The Federal Trade Commission filed a civil lawsuit against Michael Allen Brooks and his company, Penbrook Productions in Irvine, Calif., in 2009, accusing him of operating the rebate-processing scam that duped Jimenez out of $197.
The FTC obtained a judgment against Brooks for $7.6 million. He settled by paying a $125,000 fine and agreeing to give the FTC all proceeds from the sale of another company he owned. He also agreed to never again operate a work-from-home business.
That punishment hardly seemed fair to Yadira Briseno, a mother of two in Baldwin Park, Calif., who also paid $197 for the rebate-processing opportunity. She and her husband, Albert, tried for weeks to get a refund. Instead of making extra cash to pay for accounting classes, Briseno and her husband ended up victims.
“I don’t buy anything online anymore from a company I don’t know. There’s a lot of people that take advantage of you,” she said. “They shouldn’t let those people get away with paying a little settlement.”
Con artists are quick to adapt to the times. In addition to job-hunting scams, debt-restructuring and mortgage-modification scams have flourished in the economic downturn.
Southwick, of the Council of Better Business Bureaus, said job-hunters should research potential employers online. “If you have the gut feeling this doesn’t sound like it’s on the up and up, try contacting the company on your own,” she said.
And if an employer asks for money upfront, that’s a good sign you should look somewhere else, authorities said.
“The things to watch out for are the job opportunities where you as the consumer or employee would have to pay money to get the job. That’s a huge red flag,” said Rozina Bhimani, a lawyer with the FTC in Chicago, which obtained a judgment against Todorovic. “A lot of times, a quick check with the Better Business Bureau, once consumers have a company name, will shed light on whether it’s a legitimate job — or not.”
Scammers prey on neediest
Offers of debt relief, work-at-home jobs, loans draw in victims
Monday, January 10, 2011 02:51 AM
By Tracy Turner
THE COLUMBUS DISPATCH
Most people taken in by scams last year were the least able to afford a loss, according to a report on the top cons of 2010 from the Better Business Bureau of Central Ohio.
“With the economy still on the mend, scammers had a field day targeting those looking for work and trying to make ends meet,” said Kip Morse, president and CEO of the consumer-advocacy group, in a statement.
“Some new additions to the list are signs of our tough economic times, while others have always plagued consumers.”
The list is based on the frequency of calls and complaints, he said. The group puts out the annual list to help consumers avoid falling prey to similar scams this year.
A look at 2010′s most-common scams, according to the BBB:
• Advance-fee loan scams prey on consumers and business owners applying for a loan online. They are told that they qualify but must pay a fee, often more than $1,000. The victim wires money to the scammers but never receives the loan.
• Home repairers or roofers go door to door promising consumers repairs but fail to deliver. Complaints to the BBB nationally about roofing companies increased by 40 percent in 2010, according to estimates.
• Lottery/sweepstakes scams, many of them fraudulently using familiar names such as Reader’s Digest and Publishers Clearing House, work by sending the consumer a check that supposedly represents part of the consumer’s winnings. To get the rest, consumers are told to deposit the check and wire some of the money back to cover supposed taxes or fees. The deposited check then bounces, leaving the consumer to pay bank fees and out whatever sum they wired.
• Companies offering debt-relief and debt-settlement services say they help consumers to get out of debt, but they often require upfront fees and can leave consumers in worse shape than when they started. Complaints to the BBB nationally about such services increased by 30 percent in 2010, according to estimates.
• Duct-cleaning companies run ads offering services for a low price, typically $69.95. Once they enter the home, the furnace is disassembled, and the price increases significantly. The victims are left with the choice of paying the bill or not having their furnace put back in working order.
• Identity-theft scams were perpetrated in a variety of ways, including “phishing” schemes and stealing information from credit-card offers.
• Work-from-home scams often used online or newspaper ads to get consumers to wire a fee to a company to get job information. Consumers ended up getting nothing for their money.
• Mystery-shopper scams had consumers evaluate consumer services and retail companies using money from a check the consumer receives in the mail. The consumer deposits the check and wires the rest of the money to the scammers as part of the supposed evaluation, but the check is fake, and the consumer is left owing the bank.
• Vehicle service contracts by some companies have significant restrictions on repairs they cover. Consumers should clearly understand the warranty coverage before buying, the BBB says.
• Overpayment scams typically target small-business owners, landlords or people with rooms to rent, and sellers on sites such as craigslist. The scammers overpay the amount for the services or products they bought, and then ask the victim to wire the extra amount back to them. The check is fake, and the victim is out the money wired back to the scammers.