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Scam artists target
job seekers and entrepreneurs

Updated March 25, 2010

Work-at-home scams

Cerritos residents are warned to beware of con artists who develop business opportunity frauds and work-at-home scams that encourage consumers to invest their own funds in start-up enterprises. These con artists typically place work-opportunity ads in the classified sections of newspapers. Consumers who contact these advertisers are then sold “business plans” for enterprises such as operating vending machines, distributing products or servicing pay phone and fax machines. The scammers claim that you can capitalize on and operate these businesses with minimal training to earn a substantial return.

As the scammers will often ask for a substantial amount of money to “start the business,” it creates the illusion that the business opportunity is a legitimate investment. Victims of these scams often believe they are investing in highly developed businesses. In fact, scam artists take the consumers’ investment as profits and commissions, and provide them with unprofitable business plans in return. The injuries to consumers can be devastating, not only in terms of the dollars they lose, but also in the time they invest in unprofitable enterprises. For example, one victim in a recent Federal Trade Commission case estimates that he spent $75,000 in an attempt to make such a business opportunity profitable.

Job placement scams

If you’re looking for a job, you may see ads for firms that promise results. Many of these firms may be legitimate and helpful, but others may misrepresent their services, promote outdated or fictitious job offerings, or charge high fees in advance for services that may not lead to a job.

Before you spend money responding to placement firms or completing placement contracts, keep the following tips in mind:

  • Reject any company that promises to get you a job.
  • Be skeptical of any employment-service firm that charges first, even if it guarantees refunds.
  • Get a copy of the firm’s contract and read it carefully before you pay any money. Understand the terms and conditions of the firm’s refund policy. Make sure you understand what services the firm will provide and what you’ll be responsible for doing. If oral promises are made, but don’t appear in the contract, think twice about doing business with the firm.
  • Take your time reading the contract. Don’t be caught up in a rush to pay for services. Stay away from high-pressure sales pitches that require you to pay now or risk losing out on an opportunity.
  • Be cautious about purchasing services or products from a firm that is reluctant to answer your questions.
  • If a company or organization is mentioned in an ad or an interview by an employment service, call the company to find out if the organization is really hiring.
  • Be wary of firms promoting “previously undisclosed” government jobs. Government positions are announced to the public in the form of flyers, website postings, etc.
  • Check with your local consumer protection agency, state Attorney General’s Office, and the Better Business Bureau to see if any complaints have been filed about a company with which you intend to do business. You may also contact these organizations if you have a problem with an employment-service firm.

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