FTC and Law Enforcement Agencies Partner up against Fraudulent Income Schemes Targeting Consumers

The Federal Trade Commission (FTC), in partnership with 19 law enforcement agencies, recently disclosed a nationwide clampdown on fraudulent income schemes, including fake jobs, pyramid schemes and investment opportunities targeting US consumers.

It’s no secret that the economic condition created by the pandemic economic conditions has fueled the spread of income scams targeting individuals who either lost their jobs or need extra income to support their household.

According to an FTC report, consumers have lost more than $610 million to scammers since 2016, with more than $150 million reported losses in the first nine months of the pandemic.

The operation dubbed “Income Illusion” saw more than 50 law enforcement actions since the start of 2020 against fraudsters promising remote work opportunities, employment scams or fake coaching courses. The FTC’s efforts are expected to end these deceptive income schemes while returning victims” money.

“Scammers are preying on the unemployment and anxiety arising from the pandemic by making false promises of big income working from home,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection said. “If someone promises you guaranteed income, but then tells you to pay them, tell the FTC right away so we can work to shut them down.”

The most common tactic used by income scammers includes a fake job listing involving fake checks. According to reports, individuals who apply for these bogus jobs go through the hiring process very quickly.

“Scammers tell people hired as “mystery shoppers” to buy gift cards as they evaluate a retailer (the scammers get the gift card PIN numbers, of course),” the FTC explained. “People hired as “virtual personal assistants” are told to send some of the money to a supposed supplier of home office equipment. Other people have even reported that their so-called boss told them to use some of the funds to buy gift cards for co-workers sick with COVID-19.”

By the time the bank uncovers that the check is fraudulent, the employee must pay back the funds, reaching a median of $2,300.

The agency also reported that investment cons targeting individuals in their 50s and 60s racked up a median loss of nearly $24,000 per victim. Consumers are advised to watch out for deceptive income schemes by researching the online company that is “hiring” and avoiding advertised success stories on social media that promise overnight wealth.