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Serving members worldwide since 1935.
Peter BenjaminWritten by:
Lynn M. English
Lafayette Federal Credit Union
Senior Vice President, Risk Management

In the age of The Great ResignationOpens in New Window, increased remote work possibilities, and wage increases that are still not keeping pace with inflationOpens in New Window, job seekers are actively looking for better work opportunities. Many of them are looking for positions that offer flexible work hours, the freedom to work from wherever, and wages that allow them to live a comfortable lifestyle. Unfortunately, the combination of these desires means that employment scams, especially work-from-home scams, are on the rise.

According to the Federal Trade CommissionOpens in New Window, a work-from-home scam usually involves a notice in the form of a job advertisement promising a lot of money for easy, remote work when in reality, no such job exists. And work-from-home scammers can be surprisingly savvy. Find descriptions of five common work-from-home scams below, as well as tips for how to avoid them and what to do if you’ve been scammed.

The Fake Check Scam

One of the most common work-from-home scams is known as the fake check scam. In this scenario, the scammer sends you a check for more money than they "owe” you. They’ll ask you to return a portion of the money to them, often with another check or through a wire transfer, before depositing or cashing the check yourself.

When you do go to deposit or cash the check, the check will bounce. Not only will you have lost money that you sent back to the scammer, you’ll likely also have to pay a bounced check fee to your bank or credit union. Any time someone sends you a check for more than what they owe you and asks you to send the difference back to them, be wary. It’s likely a scam.

The Start-Up Training Scam

This scam is similar to the fake check scam in that scammers will ask you to send them money to get started at your new job or business opportunity. However, in this scenario, the scammers promise something in return for your upfront payment, such as a training course or software that will help you start your own business and enjoy immediate success.

This scam is tricky to spot because there are legitimate digital courses and tools that can help potential entrepreneurs learn how to start their own business. To determine if a particular advertisement is a scam, keep reading to learn about eight red flags that indicate whether or not a work-from-home training course is a scam.

The Medical Billing Scam

Increasingly popular and often legitimate work-from-home opportunities are available within the medical billing field, which also makes this type of job a perfect target for scammers. Many healthcare organizations and providers outsource their billing needs and often hire independent contractors to handle their billing departments.

However, scammers know that people are increasingly seeking work-from-home opportunities, so they’ll pose as medical billing companies looking for other contractors or employees to work for them. These scammers will ask potential victims to send money to purchase necessary equipment, technical support, or even a list of clients to start their own medical billing business.

Unfortunately, victims of medical billing scams usually won’t receive any of these things. And if they do receive something, the software or client lists they get may be out-of-date or entirely fraudulent.

The Envelope Stuffing Scam

Envelope-stuffing job scams have been around for years, even predating the internet. This scam works by promising easy money for an easy job – stuffing envelopes and earning money based on the number of envelopes you can stuff.

The scammer will ask that you send money to receive supplies or more information about the job to get started. Some people have reportedOpens in New Window that the information they receive actually contains instructions for how to place a similar ad that they responded to. This scam essentially turns victims into scammers themselves (similar to how a pyramid scheme works). Scam victims who become scammers – unknowingly or not – can end up in a lot of trouble, on top of experiencing a loss of money, making this particular scam even more dangerous.

The Date Entry or Clerical Work Scam

Similar to medical billing positions, data entry and clerical jobs are also ones that can be performed remotely. Therefore, scammers will pose as authentic companies who are hiring workers to enter information into databases for large companies.

As with medical billing and envelope-stuffing scams, these scammers will often ask you to pay a fee to apply or get access to special software to perform the job duties.

Because legitimate data entry jobs don’t require much (or any) experience, they typically don’t offer high pay for this kind of work. If you see an entry-level data entry job offering a large salary or hourly wage, this may be a scam that warrants further investigation before applying.

How to Recognize Work-From-Home Scams

Falling victim to a work-from-home scam can happen to anyone. As scammers get savvier, scams become more difficult to spot. It’s important to be wary when looking for jobs online and to be aware of signs of a potential scam.

To better protect yourself, watch for these seven red flags before applying for a job, most especially before sending any money to a potential employer.

The job seems too good to be true

If anything about the job seems too good to be true, it may just be a scam. Many people dream of a better work-life balance, making remote work opportunities more attractive and work-from-home increasingly more prevalent. More specifically, proceed with caution if:

  • The job pays significantly higher wages than other companies for similar positions
  • The advertisement claims they have a "proven process” to make a certain amount of money per week or month
  • You’re being offered a fantastic position you simply aren’t qualified for
  • The job promises to pay you "above average” wages in exchange for very little work

If it sounds too good to be true, this is a red flag that the "job offer” may actually be a scam. Trusting your intuition can save you a lot of money, frustration, and heartache down the road.

If you feel that you’ve found a position that seems legitimate, always do your due diligence before accepting an offer (see #5 below). Thoroughly do your research before signing on the dotted line.

You have to pay to start work

Anytime you have to pay an employer money to start work, you should be cautious. Unless you know exactly what you’re getting in return, such as a work uniform for an onsite job, you should (almost) never pay someone money to start working for them. The employer should be paying you for services rendered.

You have to provide specific personal info

Some employment scammers aren’t just looking for your money – they’re also looking to steal your identity. If a potential employer asks for your Social Security number or bank account number, they could be a scammer.

However, some legitimate work opportunities will ask for this information for tax purposes or to enroll you in direct deposit, which can be confusing. You should only provide this information after you’ve properly vetted the company by communicating with other company representatives or other employees to confirm the company’s legitimacy.

You're encouraged to open attachments

If you receive emails from a potential employer encouraging you to open attachments, this could be an attempt to threaten your computer’s security. Scammers know how to make attachments look convincing. They might be disguised as a job description, job application, direct deposit form, or something else that seems legitimate.

Attachments from scammers can contain malware that can install a virus on your computer or steal your personal information and passwords. A good rule of thumb for any email – not just emails from a potential employer – is to never open attachments or downloads unless you know and trust the sender.

You can find little to no company information

As mentioned above, it’s becoming more important to thoroughly research and vet companies who are offering you a job. If you perform a search for the company’s website and no such website exists, you may be getting scammed.

Luckily, while the internet makes it easier for scammers to fool people, it also makes it easier for would-be victims to sniff out repeat scammers.

Agencies like the Federal Trade CommissionOpens in New Window, the Better Business BureauOpens in New Window, and the Internet Crime Complaint Center Opens in New Window(IC3) provide opportunities to file complaints and keep records of repeat scammers. Scammer warnings are also sometimes posted on online forums and even in news articles, which may appear in search results during your investigation.

The employer is overly eager to hire you

Additionally, overly eager employers are a red flag for a possible scam. Of course, someone might legitimately be excited to bring you on to the team. Authentic employers are often busy and may not respond to your communications immediately – much less reach out to you multiple times to speed you through the hiring process.

If an employer does not conduct a screening process to ensure you’re a good fit for the position, or worse, if they pressure you to accept a job offer, they may be a scammer. If you suspect you’re being scammed, it’s best to cease all communication.

Written communications contain multiple spelling and grammar mistakes

Finally, significant spelling or grammar mistakes are another red flag that a job opportunity may not be legitimate.

Of course, everyone makes mistakes. But job ads or email communications riddled with errors can signify that a scammer may be hastily writing illegitimate content. A real employer is more likely to compose communications in a professional manner.

What to Do If You Have Been (or Think You've Been) Scammed

If you’ve been scammed or recognize a posted job advertisement as a scam, do not communicate with the scammer. By doing so you put yourself at risk for accidentally revealing personal information or clicking on an attachment that contains dangerous malware.

Instead, report the ad to the job listing site or publication in which the scam was posted. You can also file a complaint against the scammer with agencies like the Federal Trade CommissionOpens in New Window, the Better Business BureauOpens in New Window, or the Internet Crime Complaint CenterOpens in New Window.

If you’ve sent a scammer money or provided details about your banking information, contact your financial institution immediately. If you paid a scammer with a credit or debit card or a scammer has made an unauthorized withdrawal from your account, your financial institution may be able to reverse the transaction.

If you provided personal information to a scammer, visit www.IdentityTheft.govOpens in New Window to learn about steps you can take. You should also consider freezing your creditOpens in New Window to prevent the scammer from taking out loans in your name. Contact each of the three credit bureaus (EquifaxOpens in New Window, ExperianOpens in New Window, and TransUnionOpens in New Window) to put a freeze on your credit.

And remember that falling victim to a scammer can happen to anyone. It’s normal to feel ashamed or embarrassed after you’ve been scammed, but perfectly intelligent people fall victim to scammers every day. There is nothing to be ashamed of.

In fact, talking about your experience can help lessen those feelings of shame and protect others from being victimized in the future.

Better Protect Yourself by Partnering With Lafayette Federal

At Lafayette Federal Credit Union, we care about our members’ online and financial safety. Our team is trained to help you spot potential scams or abuse that could harm your financial wellbeing.

If you have concerns about a potential scam or believe you may be a victim to one, don’t be afraid to ask questions. Come into a branch or learn moreOpens in New Window about protecting your identity online at Lafayette Federal.

Not a Lafayette Federal member yet? You can become a member by completing an online membership applicationOpens in New Window, scheduling an appointment or walking into a branch, or scheduling a virtual meeting with a Business Development Officer.

Not a Lafayette Federal member yet? You can become a member by completing an online membership applicationOpens in New Window.

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