Working-from-home scams
Consumers need to be especially wary of work-from-home scams, which are likely to become more prevalent with unemployment rates on the rise and many people looking for ways to make money during the economic downturn.
If a job seems too good to be true, it usually is. Always thoroughly research any work-from-home offer and do not get involved unless you are 100% sure the business is legitimate.
Here are four common types of job scams:
1. The ‘Envelope stuffing’ scheme
In this classic scam, an advertisement appears offering work packing envelopes and asking you to forward a fee for the raw materials.
When you respond to the advert with the fee, instead of getting materials to send out on behalf of a company, you get instructions to place an ad like the one you saw, asking people to send you money for information about the same work.
This is an illegal pyramid scheme because there is no real product or service being offered. You won’t get rich, and you could be prosecuted for fraud.
2. Making products and selling them back to the company
An advertisement offers work putting products together, such as model kits or toy dolls, and selling them back to the company.
In this case, while you do get the raw materials, when you return the completed product, you are often told there is no market for the product or that the work is defective.
Either way you don’t get paid and the company get their manufacturing for free.
3. The reshipping fraud
This is also known as the "postal forwarding" scam. Victims are typically offered an at-home job that involves repackaging goods, which may have been stolen, and forwarding them abroad.
Scammers ask victims to pay their own postal charges, and then repay them with a fake cheque. Those who fall for reshipping scams may be liable for shipping charges and possibly prosecution for fraud or handling stolen goods.
To add insult to injury you have paid the postal costs as well.
4. An advance on your pay
This scam takes the form of an advertisement offering a work from home opportunity where you get paid an advance before you do any work.
You generally receive a “payment” cheque as an advance payment and shortly afterwards you are notified you have been overpaid. You are also asked to send a cheque for the amount of the overpayment back to the “employer”.
By the time it becomes clear that the “payment” cheque has bounced, you may find that the cheque you sent back has been cashed.
Persons in this situation are known as “money mules”.