Americans Lose $450 Million to Fake Job Scams

Americans are losing a whopping $450 million while trying to find a job online.

Fake job scams accounted for roughly 105,000 scams in 2023, according to the Federal Trade Commission, and they are now seen as one of the fastest growing types of scams as Americans face an uncertain job market.

All in all, fake job scams increased by more than five times over the past five years. The FBI recorded 15,000 victims of this type of scam, who say they lost more than $52 million. Many victims likely never report scams either, too embarrassed to come forward.

Artificial intelligence has made fake job postings even easier for fraudsters to create, and those who recently graduated or have been laid off are vulnerable to falling victim.

"While there have been many positive effects to the rise of AI, one of the negatives is the power to more easily scam potential employees on a larger scale than ever before," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

"The methods and delivery of these messages are more difficult to spot inconsistencies in, even to individuals who would label themselves as being more tech-savvy," Beene said. "Unfortunately, the allure of having a potential employer heavily interested in hiring you can blind people to the deception going on behind the messaging."

After victims click to fill out a job application, they are often taken to fake pages, which ask for their financial information and then rob them of hundreds or thousands of dollars. They can also be sent malware, via an email attachment or link, by a purported job recruiter.

In a recent report, LinkedIn said it catches more than 99 percent of fake accounts, which made up roughly 60 million profiles in 2022. But 196,000 profiles were taken off the site only after users complained.

A recent federal jobs report showed the United States added a booming 303,000 jobs in March, and scammers are looking to capitalize wherever they can.

"Graduation season is around the corner, and scammers are taking advantage of young and naive job seekers ready to hit the real-world post-grad after college, eagerly jumping on any opportunity that comes their way," Zulfikar Ramzan, the chief scientist and executive VP of product and development at online security platform Aura, told Newsweek.

What to Look Out For

It's easy for many job seekers to be led astray when they read descriptions of work from home roles that don't have many job requirements or needed skill sets. Scammers can even be advanced enough to create fake headshots for a recruiter and use formulaic language that replicates job postings that recruiters would actually write.

When job seekers are asked for their Social Security number before accepting a job offer, they might mistakenly believe it's a routine part of setting up direct deposit payment.

Job seekers can look out for key things, even when they're desperate to get back to work. For instance, a job application should never ask you for your bank account number or ask you to pay for equipment or training for the job.

"Unless the entity you're talking with has a verified online presence, you need to stay away," Beene said. "Under no circumstances should you be giving out bank information to an employer unless you've been officially hired and their human resources department is asking you for the information for direct deposit and the documents being filled out are legal and binding."

Those who believe they've been scammed should immediately report the scam to their banking institution.

"Job seekers must approach their search with heightened skepticism," HR consultant Bryan Driscoll told Newsweek. "Any job offer requiring payment for training, equipment or background checks should raise red flags. Legitimate employers do not ask for money."

Ramzan said many of the fake job listings include roles like "package handlers" or "shopping coordinators." There's also been a significant rise in the "start your own online business" scam.

"Depending on the scam, you may be asked to buy educational materials or sell goods and recruit new business owners," Ramzan said. "The goods you buy will prove worthless, or you'll only make money by inviting others to join your team and work with you."