Beware Employment Scams

Pyramid Schemes (otherwise known as Multi-Level Marketing Schemes)

Pyramid schemes are frauds that are based on recruiting new investors. The premise of the organization is to recruit new investors or salespeople who are required to buy into the company by purchasing inventory and/or paying member fees. From an outside perspective, the job may look like a simple sales position, but the real red flag is when “employees” are aggressively encouraged to recruit friends and family members. No new money is created in pyramid schemes, as the initial buy-in costs far outweigh the realistic earnings of selling the products. The only people who make money are the initial investors at the top of the pyramid, who profit from the money invested by new recruits.

Before you invest any money in a multi-level company that could be a pyramid scheme, get all the facts about the company, its associates and the products being sold. Avoid promoters who fail to clearly explain their plans. Remember that the greater the promised return, the greater the risk. Pyramid schemes are illegal under the Competition Act, and serious charges may be brought against you if you are operating or affiliated with one of these schemes.

Payment Transfer Job Scams

Scammers are using unsolicited email and social media "job offers" to trick recipients around the world into falling for payment transfer scams. Victims are promised a percentage of the payments transferred. In fact, the scheme is a method of "laundering" stolen money and victims may be unwittingly participating in illegal activities.

These bogus "job offers" are very common. The messages ask recipients to accept cash or cheque payments into their bank accounts and then wire-transfer the payment to the "company" running the scam. In some versions, victims are asked to accept direct electronic transfers into their own bank accounts. Victims are instructed to keep a specified percentage of the transferred funds as payment.

Typically, the scammers claim that there is some impediment, such as slow processing or currency conversion problems, which stops them from accepting overseas payments in their country. Therefore, they claim, they need an overseas "agent" who can accept payments and then forward these payments back to them in an acceptable format such as a wire transfer. However, the real purpose of such schemes is to "launder" stolen funds by making it difficult for law enforcement agencies to follow the money trail.

Red Flags That a Job is an Employment Scam

• There’s no experience necessary. Even if you’re fresh out of university, you’re going to need some type of work experience in order to get hired. Be wary of ads that make it sound like anyone can do the job, because frankly, not everyone should be able to do any job.

• The salary is too high. As a new grad or someone who’s been out of work for a long time, you may read an ad for a job with a very high starting salary and think, “Score!” – but before you start dreaming of your next vacation, do your research into the company and see what similar positions with other companies typically pay. Job scammers will often post a much too high salary to lure in desperate job seekers.

• You’re offered the job on the spot. You know that you’re qualified for the job, but how does the hiring manager know? Hiring on the spot is a huge red flag that a job is a scam. Real employers take the time to get to know their job candidates before offering them a position.

•  You’re asked for personal information BEFORE being offered the position— such as your Social Insurance number, your bank account and routing number. While a potential employer may give you several reasons why they “need” the info — to run a credit check, to deposit initial funds into your account — there is never a real reason for a potential employer to ask for personal financial information about you prior to you being hired for the position.

•  You have to pay for the job. Savvy job scammers are no longer demanding cash up front in order for a job seeker to get a job. They will ask for it in a seemingly innocuous way, such as asking potential employees to pay for their proprietary software or to pay monthly for insurance on a laptop they will loan you for work. You should never, ever have to shell out money in order to be hired to work.

To wrap up, remember these 3 essential rules when job hunting: NEVER pay administrative or any other type of fees and NEVER send confidential financial information and NEVER give out your personal information prior to receiving an offer of employment. Remember – if a job sounds too good to be true, it probably is!