Employment fraud

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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 a common confidence trick. 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 which, rather than earning money by sale of legitimate products to an end consumer, mainly earns money by recruiting new members with the promise of payments. As the number of members multiplies, recruiting quickly becomes increasingly difficult until it is impossible, and therefore most of the newer recruits do not make a profit. As such, pyramid schemes are unsustainable. The unsustainable nature of pyramid schemes has led to most countries outlawing them as a form of fraud.

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.

<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 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.

Email fraud is intentional deception for either personal gain or to damage another individual using email as the vehicle. Almost as soon as email became widely used, it began to be used as a means to defraud people, just as telephony and paper mail were used by previous generations.

<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 or advantage 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 perpetrators set up a coercive, fraudulent, extortionary, or otherwise illegal coordinated scheme or operation to repeatedly or consistently collect a profit. The term "racketeering" was coined by the Employers' Association of Chicago in June 1927 in a statement about the influence of organized crime in the Teamsters Union. Specifically, a racket was defined by this coinage as being a service that calls forth its own demand, and would not have been needed otherwise. Narrowly, it means coercive or fraudulent business practices; broadly, it can mean any criminal scheme or operation with ongoing or reoccurring profit, as defined in the 1970 U.S. RICO Act, which aimed to curtail the power of the Mafia and other organized crime.

<span class="mw-page-title-main">Romance scam</span> Confidence trick using romantic intentions

A romance scam is a confidence trick involving feigning romantic intentions towards a victim, gaining the victim's affection, and then using that goodwill to get the victim to send money to the scammer under false pretenses or to commit fraud against the victim. Fraudulent acts may involve access to the victim's money, bank accounts, credit cards, passports, Cash App, e-mail accounts, or national identification numbers; or forcing the victims to commit financial fraud on their behalf.

A money mule, sometimes called a "smurfer", is a person who transfers money acquired illegally, such as by theft or fraud. Money mules transfer funds 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 recruited on-line under the guise of legitimate employment, not aware that the money they are transferring is the product of crime. Similar techniques are used to transfer merchandise illegally.

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.

<span class="mw-page-title-main">Credit card fraud</span> Financial crime

Credit card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. The purpose may be to obtain goods or services or to make payment to another account, which is controlled by a criminal. The Payment Card Industry Data Security Standard is the data security standard created to help financial institutions process card payments securely and reduce card fraud.

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.

<span class="mw-page-title-main">Honest services fraud</span> Crime in the United States

Honest services fraud is a crime defined in 18 U.S.C. § 1346, added by the United States Congress in 1988, which states "For the purposes of this chapter, the term scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."

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.

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.
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