Unemployment Fraud: Thieves Use Fake Job Ads To Collect Benefits

Job search.
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One thing you can always count on is that scam artists will keep coming up with new and inventive ways to commit fraud. Lately, many of them have used fake job ads — often on popular job listing and social media sites — to create fraudulent unemployment benefit accounts and bilk taxpayers out of billions of dollars.

See: Unemployment Fraud — Suspected Colorado Scammers Net Over $73M in Benefits
Find: Entry-Level Job Seekers Still Struggling to Get Hired Despite Labor Shortage

More than 18,000 fake job listings are currently on the web, according to the My Background Check website, which cited estimates from job search engine Indeed. Millions of job listings need to be removed from Indeed each month for failing to meet its quality guidelines. LinkedIn, which also posts millions of job listings, uses automated software to detect and remove scam postings.

My Background Check estimates that fake job listings have led to as much as $7 billion in fraudulent unemployment claims. With these scams, job seekers are drawn to fake listings, where they provide personal information. Scammers then use the job seekers’ names and info to apply for unemployment benefits.

The Better Business Bureau said in a September alert that Indeed, LinkedIn and Facebook topped the list of online platforms where users reported spotting fraudulent job ads. Facebook has even hosted fraudulent pages that masquerade as state unemployment agencies.

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See: Companies Hiring for 2021- And Beyond
Find: 5 Things To Negotiate at Your Job Other Than Salary

This has become an increasingly worrisome problem in recent months. The FBI,  Federal Trade Commission and U.S. Secret Service, along with cybersecurity firms, have reported a major increase in sham job ads seeking to steal people’s personal data, ProPublica reported in late October.

In March, LexisNexis detected about 2,900 ads that touted unusually high pay, used sketchy email domains and required visitors to verify their identities upfront. That number had grown to 18,400 by July and 36,350 in October. One reason these scams have grown so fast is that Americans have been quitting their jobs in record numbers to seek better opportunities elsewhere, which has led to a tight labor market and steep rise in job listings.

See: Great Resignation Not Over — 4.2 Million Americans Quit Their Jobs in OctoberFind: Labor Shortage Forecast — 3 Main Factors That Could Delay Recovery for Years

The best way to avoid being scammed yourself is to use caution when replying to job ads. My Background Check says these are some red flags to look out for when reviewing job listings:

  • Interviews are not conducted either in-person or using a secure video call
  • Employer contacts you through a personal email or teleconference application
  • Employer requires you to pay a fee for background screening or purchase equipment to perform the job
  • Employer requests credit card information or sends an employment contract that asks for personally identifying information
  • Posting is on a job board but not on the employer’s own job listings
  • Recruiter posting the job doesn’t have a profile or has a profile that doesn’t match their stated role
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ProPublica warns that some of the scams are quite sophisticated, with fraudsters going so far as to recreate companies’ websites.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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