Employment fraud

Last updated

Employment fraud is the attempt to defraud people seeking employment by giving them false hope of better employment, offering better working hours, more respectable tasks, future opportunities, or higher wages. [1] They often advertise at the same locations as genuine employers and may ask for money in exchange for the opportunity to apply for a job. [2]

Contents

Types of fraud

Recruitment agent fraud

Fraud is committed by recruiters when the profit margin is increased through misrepresentation. They try to convince candidates, contractors, or consultants that their skill set is beneath the wage they are seeking. On the other end, they try to convince the employer that there is no candidate on the market for the hourly rate the recruiter is offering. It is the misrepresentation that renders it fraudulent. This type of fraud is widespread in countries like the United Kingdom, where due to law enforcement agencies being negligent, jury trials not being mandatory or not even existing at all, and due to corruption, it is impossible to enforce the law through private prosecution or civil remedies. [3] [ failed verification ]

Recruitment fraud

This type of fraud involves a person misrepresenting themselves as an employee of a particular company and acting on its behalf to offer a fictitious job opportunity. This type of fraud is generally conducted through the internet utilizing tactics that include false social media advertising and the creation of fake websites. [4]

Advertising fraud

Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods or services, [5] including activity that may induce a person to become a victim of a crime such as theft, including identity theft. [6]

Employers conspiracy fraud

This type of fraud happens when several employers conspire against a specific candidate to force them to work for a specific employer and/or to cause financial damage to this person, so they would agree to work for lesser wage than their market value or conspiring employer job ad stated salary via avoiding hiring them under different false reasons and through misrepresentation. For instance, after the whole hiring process is accomplished, the conspiring employers may say they need more time to decide and never give any decision, or after the whole hiring process is completed, the conspiring employer would state the false reason for not hiring victim candidates. It is similar to price-fixing. This type of fraud is very difficult to prove.[ citation needed ]

Types of employment scams

Mystery shopper

The victim applies to be a mystery shopper. They are asked to test a money wiring service such as Western Union and to report back on the experience. The victim receives a check and is told to withdraw the value of the check in cash. This leads them to believe the check has cleared, although the check is fake. It can take weeks to uncover the fraud. They then send the money via the wire transfer service either back to the sender or some sort of money laundering scheme. [7]

Payment administration

The victim is asked to handle payments on behalf of an overseas company, earning a fee for every payment handled. The companies turn out to be a front for illegal activity, implicating the victim in the crime. [8]

Guaranteed employment/income scams

The victim is guaranteed a certain income, benefits or employment. To get this they first have to buy something like a business plan, start-up materials, or software. They may be asked to pay to be put on a directory to "guarantee" jobs. [9] This is merely a way to get the victim to spend money – no job awaits.

Multi-level marketing

People selling through a multi-level marketing scheme earn a commission on the sales of those they recruit, as well as on their direct sales. Some multi-level marketing, like Tupperware, can be legitimate businesses. However, some multi-level marketing schemes are pyramid schemes in disguise. The products may be of poor quality, overpriced, and hard to sell, or the victim may be asked to spend heavily on useless training materials. Some multi-level marketing schemes may require money from the victim to join. [10]

Visa/work permits

A prospective employer overseas says that it will handle the victim's work visa application but instructs the victim to send money in the guise of processing fees. The scammer takes the money and vanishes. [11]

International Trade

Crime and fraud are an increasing threat to businesses that operate within the international trade sector. Fraud is defined as deceit for financial profit, and it costs the UK an estimated £110 billion annually. [12] The main threat to international traders is from organized crime, including the theft of goods or business identity, cross-border crime, and road-freight crime. Other risks include infringement of intellectual property or employee fraud. [13]

Online trading developed a new platform for criminal activity, such as new ways of laundering money. Businesses that do international trade under the EU can rely on shared laws and commercial procedures to protect them. [14]

See also

Related Research Articles

<span class="mw-page-title-main">Advance-fee scam</span> Type of confidence trick fraud

An advance-fee scam is a form of fraud and is one of the most common types of confidence tricks. The scam typically involves promising the victim a significant share of a large sum of money, in return for a small up-front payment, which the fraudster claims will be used to obtain the large sum. If a victim makes the payment, the fraudster either invents a series of further fees for the victim to pay or simply disappears.

<span class="mw-page-title-main">Pyramid scheme</span> Type of unsustainable business model

A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.

<span class="mw-page-title-main">Fraud</span> Intentional deception made for personal gain or to damage another individual

In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law or criminal law, or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements.

Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many instances, bank fraud is a criminal offence. While the specific elements of particular banking fraud laws vary depending on jurisdictions, the term bank fraud applies to actions that employ a scheme or artifice, as opposed to bank robbery or theft. For this reason, bank fraud is sometimes considered a white-collar crime.

<span class="mw-page-title-main">Internet fraud</span> Fraud or deception using the Internet

Internet fraud is a type of cybercrime fraud or deception which makes use of the Internet and could involve hiding of information or providing incorrect information for the purpose of tricking victims out of money, property, and inheritance. Internet fraud is not considered a single, distinctive crime but covers a range of illegal and illicit actions that are committed in cyberspace. It is, however, differentiated from theft since, in this case, the victim voluntarily and knowingly provides the information, money or property to the perpetrator. It is also distinguished by the way it involves temporally and spatially separated offenders.

<span class="mw-page-title-main">Email fraud</span> Deception through email, made for personal gain or to damage another individual

Email fraud is intentional deception for either personal gain or to damage another individual by means of email. Almost as soon as email became widely used, it began to be used as a means to defraud people. Email fraud can take the form of a "con game", or scam. Confidence tricks tend to exploit the inherent greed and dishonesty of its victims. The prospect of a 'bargain' or 'something for nothing' can be very tempting. Email fraud, as with other 'bunco schemes,' usually targets naive individuals who put their confidence in schemes to get rich quickly. These include 'too good to be true' investments or offers to sell popular items at 'impossibly low' prices. Many people have lost their life savings due to fraud.

<span class="mw-page-title-main">Lottery scam</span> Fraud pretending to be a lottery

A lottery scam is a type of advance-fee fraud which begins with an unexpected email notification, phone call, or mailing explaining that "You have won!" a large sum of money in a lottery. The recipient of the message—the target of the scam—is usually told to keep the notice secret, "due to a mix-up in some of the names and numbers," and to contact a "claims agent." After contacting the agent, the target of the scam will be asked to pay "processing fees" or "transfer charges" so that the winnings can be distributed, but will never receive any lottery payment. Many email lottery scams use the names of legitimate lottery organizations or other legitimate corporations/companies, but this does not mean the legitimate organizations are in any way involved with the scams.

Insurance fraud is any act committed to defraud an insurance process. It occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due. According to the United States Federal Bureau of Investigation, the most common schemes include premium diversion, fee churning, asset diversion, and workers compensation fraud. Perpetrators in the schemes can be insurance company employees or claimants. False insurance claims are insurance claims filed with the fraudulent intention towards an insurance provider.

Racketeering is a type of organized crime in which the persons set up a coercive, fraudulent, extortionary, or otherwise illegal coordinated scheme or operation to repeatedly or consistently collect a profit. Narrowly, it means coercive or fraudulent business practices; broadly, it can mean any criminal organization with ongoing profit, as defined in the 1970 U.S. RICO Act, which aimed to curtail the power of the Mafia and other organized crime.

A money mule, sometimes called a "smurfer", is a person who transfers money acquired illegally in person, through a courier service, or electronically, on behalf of others. Typically, the mule is paid for services with a small part of the money transferred. Money mules are often dupes recruited on-line for what they think is legitimate employment, not aware that the money they are transferring is the product of crime. The money is transferred from the mule's account to the scam operator, typically in another country. Similar techniques are used to transfer illegal merchandise.

Telemarketing fraud is fraudulent selling conducted over the telephone. The term is also used for telephone fraud not involving selling.

<span class="mw-page-title-main">Work-at-home scheme</span> Scams focused on businesses run from ones home

A work-at-home scheme is a get-rich-quick scam in which a victim is lured by an offer to be employed at home, very often doing some simple task in a minimal amount of time with a large amount of income that far exceeds the market rate for the type of work. The true purpose of such an offer is for the perpetrator to extort money from the victim, either by charging a fee to join the scheme, or requiring the victim to invest in products whose resale value is misrepresented.

A scam letter is a document, distributed electronically or otherwise, to a recipient misrepresenting the truth with the aim of gaining an advantage in a fraudulent manner.

Unreported employment, also known as money under the table, working under the table, off the books, cash-in-the-claw, money-in-the-paw, or illicit work is illegal employment that is not reported to the government. The employer or the employee often does so for tax evasion or avoiding and violating other laws such as obtaining unemployment benefits while being employed. The working contract is made without social security costs and does typically not provide health insurance, paid parental leave, paid vacation or pension funds. It is a part of what has been called the underground economy, shadow economy, black market or the non-observed economy.

Crime rates in Singapore are some of the lowest in the world, with petty crimes such as pickpocketing and street theft rarely occurring, and violent crime being extremely rare. Penalties for drug offences such as trafficking in Singapore are severe, and include the death penalty.

Mass-marketing fraud is a scheme that uses mass-communication media – including telephones, the Internet, mass mailings, television, radio, and personal contact – to contact, solicit, and obtain money, funds, or other items of value from multiple victims in one or more jurisdictions. The frauds where victims part with their money by promising cash, prizes, and services and high returns on investment are part of mass market fraud.

Elder financial abuse is a type of elder abuse in which misappropriation of financial resources or abusive use of financial control, in the context of a relationship where there is an expectation of trust, causes harm to an older person.

An overpayment scam, also known as a refund scam, is a type of confidence trick designed to prey upon victims' good faith. In the most basic form, an overpayment scam consists of a scammer claiming, falsely, to have sent a victim an excess amount of money. The scammer then attempts to convince the victim to return the difference between the sent amount and the intended amount. This scam can take a number of forms, including check overpayment scams and online refund scams.

References

  1. ↑ "Employment Fraud Law and Legal Definition | USLegal, Inc". definitions.uslegal.com. Retrieved 2019-09-06.
  2. ↑ "Job Scams". US Federal Trade Commission. 24 October 2013. Retrieved 16 August 2019.
  3. ↑ Mehta, Riju. "Job scams: Fake job offers: How to avoid getting duped in job scams". The Economic Times. Retrieved 2020-08-02.
  4. ↑ Mehboob, Asad; Malik, M.S.I. (2021). "Smart Fraud Detection Framework for Job Recruitments". Arabian Journal for Science and Engineering. 46 (4): 3067–3078. doi:10.1007/s13369-020-04998-2. S2CID   228908425 . Retrieved 31 August 2021.
  5. ↑ Gunn, Sherry (January 1990). "Lanham Act Revision Provides Relief for Misleading Comparative Advertisements: Does It Go Too Far? Advertisements: Does It Go Too Far?" (PDF). Washington University Law Review. 68 (3): 713. Retrieved 31 August 2021.
  6. ↑ Voas, Jeffrey; Kshetri, Nir (February 2021). "Monetizing You". Computer. 54 (2): 13–15. doi: 10.1109/MC.2020.3038509 .
  7. ↑ "Mystery Shopping Scams". Federal Trade Commission. March 2021. Retrieved 31 August 2021.
  8. ↑ "Beware of these 8 digital payment-related scams - How to avoid payment-related scams". The Economic Times. Retrieved 2020-08-05.
  9. ↑ "Job Scams". Consumer Information. 2013-10-24. Retrieved 2019-08-29.
  10. ↑ "SEC.gov | Beware of Pyramid Schemes Posing as Multi-Level Marketing Programs". www.sec.gov. Retrieved 2020-08-03.
  11. ↑ "Fraud Act: Legal Guidance: The Crown Prosecution Service". Cps.gov.uk. 2014. Retrieved 28 October 2014.
  12. ↑ Copper, Christopher (2018-05-21). "Fraud epidemic costs the UK £110bn annually: report". www.internationalinvestment.net. Retrieved 2019-08-20.
  13. ↑ "Investigations and enforcement: what we do, our outcomes, and complaints". GOV.UK. Retrieved 2019-09-06.
  14. ↑ Titievskaia, Jana. "EU Trade Policy: Frequently Asked Questions" (PDF). European Parliament.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.