8 Common Work-from-Home Scams—and How to Know a Job Is Legit
Updated: Jul. 02, 2024
Looking for a new gig? Before you accept an offer, read this expert-backed advice for spotting work-from-home scams.
Imagine landing your dream job, only to realize it was an elaborate ruse to defraud you. It sounds like a nightmare, but it’s happening. A lot. Posing as companies or independent contractors, fraudsters are offering job hunters remote work—then pulling the rug out from under them. Instead of lucrative companies, these cybercriminals are running work-from-home scams that’ll steal your personal information or convince you to pay a small amount up front for something. Talk about kicking someone when they’re down.
The popularity of work-from-home jobs, coupled with the increased number of people looking for extra income in a challenging economy, has created a perfect storm, of sorts. In fact, the Better Business Bureau reports that an estimated 14 million job seekers are confronted with job scams annually, resulting in more than $2 billion in direct losses.
“Like other types of scams, these fraudulent jobs are a scheme to take your identity, bank information or money,” says Catherine Fisher, a career expert at LinkedIn who often writes and talks about job scams. “Work-from-home scams prey on people who want to make money working remotely and can be for job titles such as ‘mystery shopper,’ ‘virtual personal assistant’ or ‘caregiver’—and so you want to be vigilant when applying for these types of job opportunities.”
With the help of three renowned experts in this space, I’m laying out the tech tips you need to know to avoid work-from-home scams. I’ve been writing about technology for 30 years (and even host the Tech Impact TV show and Tech It Out radio show and podcast), so I know how to translate tricky topics in a way that’s easy to follow. Ahead, I’ll do just that to help you spot the red flags and take action if you fall prey to a work-from-home scam.
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What are work-from-home scams?
As the name suggests, work-from-home scams are fake job postings that promise part- or full-time employment from home but are designed to trick you into paying them instead of the other way around.
Work-from-home scams tend to fall into one of two categories:
- Fake applications: The “company” asks you to fill out a (phony) application, and then fraudsters steal your personal info, which could lead to identity theft.
- Fees and fake payments: The “company” asks you to pay a fee of some sort, perhaps for a (fake) background check, certification, training or equipment purchase.
The goal, however, is the same: to defraud you.
There are also work-from-home scams that involve you in criminal activity—often without your knowledge—such as having you ship illegally purchased goods out of the country.
“Scammers want your money and/or your personal information,” says Rhonda Perkins, chief of staff for the Division of Marketing Practices at the Federal Trade Commission (FTC). “Scammers place fake ads on job search sites, and often the position may be fake, or the scammer copies an ad by a real employer and swaps in their contact information.”
While these schemes have been around a long while, they’ve typically existed as phone, email and text message scams. But they’re increasingly migrating to direct messages on LinkedIn, WhatsApp and other social media sites and are focusing on many job seekers’ desire to work from home.
Who’s at risk of falling for a job scam?
Anyone looking for a new gig could fall for a scam, but if you’re looking for a work-from-home job, in particular, you’re especially at risk.
We hear a lot about elder fraud and scams targeting older adults, but perhaps unsurprisingly, young people have a greater risk of falling victim to work-from-home scams. As reported recently in the Wall Street Journal, fraudsters are often targeting college graduates, who are understandably eager to land their first jobs.
8 popular work-from-home scams
Work-from-home scams come in all forms and evolve regularly, but the following are a few of the more common ones you’ll come across today.
Pay-for-training scams
In a pay-for-training swindle, the “company” will tell you that you got the job. So far, so good. But shortly after sharing the good news, the fraudsters will ask you to pay for a certification they say is necessary for the role and/or for virtual training. In some instances, they claim they’ll reimburse you for the costs, adding those fees to your first check or direct deposit.
They’re banking on the fact that hopeful job seekers tend to go above and beyond for their new role. But there’s no job, and the training is bogus. By paying for it, you’re putting money in the hands of the bad guys.
Resume refresh scams
“Another scam we’re seeing is when fake job recruiters tell people to pay for a more professional-looking resume or, they’re told, they won’t find work-from-home opportunities,” says Toni Frana, the lead career expert at FlexJobs, the top job-searching site for remote work.
These phony recruiters can be hard to spot. “Even if these scammers are overseas, [generative] AI is helping them communicate with better spelling and grammar,” Frana adds.
Equipment-buying scams
Medical billing is a great work-from-home opportunity, but that plum gig may be a scam if your new boss asks you to buy your own equipment first. The company may tell you the products are necessary for getting the job done. It might promise to reimburse you along with your first payment. It’s all lies, courtesy of the scammers behind the fake job.
(This employment scam is related to another tactic: Someone reaches out to you with an offer of a “free” brace, wheelchair or walker. Medicare will pay for it, they assure you. But to process the benefit, the seemingly generous good Samaritan will ask you for your private Medicare info. You guessed it: The goal isn’t to gift you free medical devices; it’s to steal your info.)
Overpayment scams
Your new work-from-home job may seem legit until the company sends you your first check for much more than it owes you. “Oops! Our bad,” your new boss may reply before asking you to send back the difference. Do it, and you’re falling hook, line and sinker for an overpayment scam.
Here’s how the con works: You send back the difference in payment by wire or check. When you attempt to cash the check your employer originally sent you, it will bounce—and your bank may notify you of this after the fraudsters cash your money.
Perkins says the scammers may also “ask for gift cards or cryptocurrency” when you return the extra cash that had been “accidentally” added to your paycheck. The reason is simple: They’re both difficult to trace. If that sounds like an unreasonable request, know that they “may come up with a reason why they’d like to be reimbursed by those methods,” she says.
Identify theft scams
When applying for a work-from-home job, you may be asked to fill out forms that seem innocent enough—with requests for your name, address, phone number and such. But in an identity theft job scam, these forms can graduate to asking for more sensitive details, often under the false claim of needing to perform a background check on you. The scammers’ ultimate goal is to gather enough information to steal your identity.
MLMs and pyramid schemes
Yes, there are legit multi-level marketing (MLM) companies, or companies that sell products via person-to-person sales. But as the FTC points out, there’s a very fine line between MLMs and pyramid schemes. If a multi-level marketing company promises you money for recruiting others to work for them—not based on your retail sales alone—it’s a pyramid scheme, the organization says.
How do you know that an MLM is up to no good? You earn a commission based on what the people you recruit sell, and you’re first asked to buy the company’s products with your own money. Don’t think that a recognizable name means a company is legit; pyramid schemes may sell products you’ve heard of. And don’t be lured by promises of wealth. The con artists often tout the potential to make big bucks, but you’re likely to spend more than you can ever earn.
Reshipping scam
Jobs that promise high earnings for minimal work, all done from the comfort of home? No wonder job seekers are jumping at such opportunities. Unfortunately, these are often scams—and ones where fraudsters rope unwitting employees into assisting in the con.
Without realizing it, you may be performing illegal tasks as part of your lucrative new work-from-home “job.” That’s the case with a reshipping scam. As part of this con, a company may send small boxes for you to repack and mail with labels it provides. In reality, you’re unknowingly smuggling drugs or other items.
Mystery shopper scams
In another common scam, mystery shopping jobs by fake retailers or faux recruiters promise to find you high-paying “secret shopper” jobs in your area—for a small fee. Once you pay up, the scammer will disappear … with your money.
Some versions of the scam ask job seekers to pay for training or products, while others tell them to pay for access to surveys that promise compensation when completed. In all cases, once you pay, you’ll never hear from the scammers again.
12 telltale signs that a work-from-home job isn’t legit
Your Spidey sense should be tingling if you see any of these red flags in the job post or while corresponding with someone at the company.
- It sounds too good to be true. (Because it is!) Take, for instance, an ad promising that you can make $1,000 per week in your pajamas—no experience necessary.
- The job offer is unsolicited (a work-from-home opportunity you never applied for) or the offer comes far too easily, maybe after only one short interview.
- The job description is vague.
- Information about the company is sparse or nonexistent.
- The offered wage is higher or lower than the average wage for that job. Here’s your reminder to check current wages on the internet!
- The company or recruiter isn’t willing to chat via phone or video call, conducting all aspects of the hiring process over text or direct message. They may say they’re traveling or live out of the country and can’t talk.
- You are asked to pay for supplies, training, certification or equipment.
- There are no employees on LinkedIn and no company reviews.
- The recruiter or company quickly suggests moving the conversation off LinkedIn to another messaging platform. As Fisher points out, scammers will do this often. Similarly, they may ask you to download encrypted software to chat with them.
- A company or recruiter asks you to provide personal info or banking details very early on in the application process.
- You receive a check for more than you expected, and your company instructs you to send the additional cash back.
- Your new “boss” asks to ship you boxes and requests that you send them to a third party.
How to avoid work-from-home scams
To sidestep work-from-home scams, you need to know they’re out there, understand what they may look like and be aware of the fact they can evolve over time. From there, you can best avoid becoming a victim of a job scam by taking the following advice to heart.
Look up the company
Frana says she always advises people to check out the company’s website to see if it exists. If the company is fake, there may not be a website for it. If there is a site, stay skeptical while you poke around—and consider it fishy if there’s no contact information.
Look for the company’s affiliation with organizations like the Better Business Bureau. But overall? “Just trust your gut,” says Frana.
Verify the recruiter
If the company seems legit, determine if the person contacting you actually works there. A scammer may pretend to work for a legitimate business or recruitment agency. If you can’t find them listed on the website or on social media tied to the company, it’s probably a scam.
Another quick way to spot a scammer is by looking at the sender’s email address. If the person works for a big recruitment agency or large corporation, why are they corresponding with you from a Gmail, Yahoo or Outlook account? The likely answer: They’re trying to con you.
Official communication should come from verified company email domains—not a generic address.
Look for a verification badge
When job-searching on LinkedIn, look for a verification badge on the hiring manager’s profile and job post, advises Fisher. “When users see verifications on job posts, that means there is verified information about the company and job poster—including, for example, if the poster is affiliated with an official company page, has verified their association with a particular workplace or has verified their identity through Clear or one of LinkedIn’s other identity-verification partners,” she says. “And most of all, if something doesn’t feel right, report it.”
Be wary of classified ads
Those looking for work may (understandably) look for opportunities on various employment platforms, such as LinkedIn, Indeed and Glassdoor. But know that con artists frequently use classified ad sites like Craigslist to advertise phony jobs.
Scammers are essentially exploiting the limited verification processes inherent in these free-for-all platforms. You’ll often find postings for envelope-stuffing jobs from home (reminder: scam!), while bigger corporations generally use more formal recruiting avenues.
What to do if you’ve fallen for a work-from-home scam
Scammers are smart, so there’s a chance that even the most careful job seeker can fall prey to fraud. So what should you do if you’re a victim of a job scam? “If you lose money to a scam, immediately contact the company or bank you used to send the money, report the fraud and ask to have the transaction reversed if possible,” says Perkins. “Then report it to the FTC at ReportFraud.ftc.gov.”
In other words, the smartest thing to do when you’re a victim of a work-from-home scam is to take these steps:
- Report the fraud and reverse the transaction. The FTC has a handy chart that lists exactly how to do this, based on the payment method you used when paying the scammer.
- If you gave a scammer your Social Security number, go to IdentityTheft.gov to see what steps to take, including how to monitor your credit.
- If you gave a scammer your username and password, immediately create a new, strong password. Did you use the same password anywhere else? If so, change it there too.
Falling for a work-from-home scam isn’t ideal, but the faster you act, the better your chances are of getting your money back. A quick reaction can stop scammers in their tracks—before they have a chance to access your financial accounts or steal your identity.
About the experts
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Why trust us
Reader’s Digest has published hundreds of articles on personal technology, arming readers with the knowledge to protect themselves against cybersecurity threats and internet scams as well as revealing the best tips, tricks and shortcuts for computers, cellphones, apps, texting, social media and more. For this piece, Marc Saltzman tapped his experience as a technology journalist of 30 years, author of several books (including Apple Vision Pro for Dummies) and host of the syndicated Tech It Out radio show and podcast. Then Chuck Brooks, the president of Brooks Consulting International and a consultant with more than 25 years of experience in cybersecurity, emerging technologies and other tech topics, gave it a rigorous review to ensure that all information is accurate and offers the best possible advice to readers. We rely on credentialed experts with personal experience and know-how as well as primary sources including tech companies, professional organizations and academic institutions. We verify all facts and data and revisit them over time to ensure they remain accurate and up to date. Read more about our team, our contributors and our editorial policies.
Sources:
- Rhonda Perkins, attorney and chief of staff for the Federal Trade Commission’s Division of Marketing Practices; email interview, June 17, 2024
- Toni Frana, lead career expert at FlexJobs; phone interview, June 17, 2024
- Catherine Fisher, LinkedIn job trust expert; email interview, June 14, 2024
- Better Business Bureau: “Job Scams Study”
- CNBC: “Americans lost $68 million to job scams so far this year—here’s what to look out for”
- The Wall Street Journal: “New Job Scams Are Flourishing. Young Workers Are Especially Susceptible”
- FTC: “Multi-Level Marketing Businesses and Pyramid Schemes”
- FTC: “FTC Halts Bogus Envelope-Stuffing Scam”
- FTC: “Mystery Shopping Scams”
Originally Published: July 02, 2024
