What is Employment Fraud?

The crime of employment fraud involves either scamming job hunters or companies seeking employees. The types of employment fraud that exist include occupational fraud, which usually occurs in the form of work-at-home schemes, and identity theft. Individuals must take the precautionary steps to identify and protect against fraud and deception.

Employment fraud occurs when thieves lure people into applying for false job openings. This deception known as occupational fraud, in particular, involves setting up an phony company and tricking people into applying for nonexistent positions. Scammers often offer "too good to be true" benefits such as easy work for high pay. The unsuspecting victim usually ends up participating in work-at-home schemes such as envelope stuffing, phishing, or reshipping tasks.

Envelope stuffing in occupational fraud involves having people work from home to stuff multiple envelopes. The catch is that the scammers require these "employees" to pay for registration and other supplies. Those who participate in this work-at-home scheme never get paid, but the scammers end up collecting money from registration and supply fees.

Another type of employment fraud, phishing, happens when a scammer posts a seemingly valid job opening in print or online. A person applies for the position assuming it's legitimate, but the scammer actually tricks the applicant into providing personal details such as an email address, a physical address, a Social Security number, and a full name. The information is sold to third parties, often resulting in the applicant receiving nuisance solicitations such as spam email or worse.

The third type of occupational-related employment fraud offers reshipping opportunities to job seekers. In this case, the person's job responsibility involves receiving stolen goods from one scammer. The victim then sends the packages to another scammer, usually without knowing he or she is participating in the crime.

Besides occupational fraud, another category of employment fraud comes in the form of identity theft. Not only do thieves steal personal information to apply credit or other accounts, but they can also use it to apply for a job. These scammers use a few different techniques to fake an identity, including stealing, Dumpster diving, and pretexting.

To obtain a job under an assumed name or Social Security number, for example, a fraudster might steal a wallet or handbag to access identifying items like Social Security cards, driver's licenses, checks, and credit cards. Just like other identity thieves, employment thieves also sort through trash to collect addresses, account numbers, or dates of birth from old mail. Fraudsters often acquire personal information from banks or other companies under false pretenses, such as impersonating the victim or producing false documents. This trick often enables a scammer to apply for employment by using the victim's personal information.

People can avoid being scammed through employment fraud by fact-checking, confirming, and using caution when providing personal information. Job seekers should conduct research by checking out websites, phone directories, and other business resources that verify a company's legitimacy. Questions should also be asked about company history and policies as well as details about the job opening. Employee references also help to verify company details, and offers should be made in writing for confirmation. Finally, people can protect against employment fraud by not divulging optional information such as driver's license numbers and never giving out a Social Security number unless the job has been determined to be legitimate.