Victims of Employment Scams Speak Out

Work-at-home schemes, mystery shopping scams on the rise in a recession.

March 5, 2009, 11:04 AM

March 6, 2009 — -- Adding insult to injury during a recession, some people are preying on the vulnerable and unemployed.

You've seen the titillating ads, saying things like: "Make $600 a Day Wearing Your Pajamas" or "Achieve Financial Freedom Without Ever Leaving Your Couch."

Nearly 600,000 Americans lost their jobs in January, according to the U.S. Department of Labor, and 2-3 million more jobs are projected to be lost over the coming year. It's no wonder con artists are posting bogus work-at-home job leads at an unprecedented rate.

"Currently there's a 54-to-1 scam ratio among work-at-home job leads on the Internet," said Staffcentrix co-founder, Christine Durst, who screens up to 5,000 online job offers every week and rates them on her Web site. "That means that for every 55 [work-at-home] job leads that you find on the Internet, 54 of them are going to be outright scams or downright suspicious."

Unfortunately, 23-year-old Laura O'Neal from Aiken, S.C., wasn't aware of that statistic when she went looking for a job that would allow her to stay home and take care of her 2-year-old daughter. She saw an ad (at that promised $12 for every envelope she stuffed and thought she'd discovered the magic key to being a stay-at-home mom.

"It seemed like it would work out great," said O'Neal. "I could just sit here and stuff envelopes and pay attention to [my daughter] and be able to make a legitimate paycheck."

O'Neal said the ad lead her to believe she'd earn "anywhere between $300 and $800 a week," considerably more that what O'Neal was making outside the home, working a 9-to-5 job. She also hoped it would bring in enough money to help get her family out of debt.

After carefully reading the Web site that listed the job opportunity, O'Neal sent in $37.94 for a starter kit. She waited for weeks, but nothing ever arrived.

Frustrated, she went back to the company to register a complaint.

"I did go back to the Web site to see if maybe there was an e-mail address or a phone number or somebody that I could contact, and there was nothing."

Investigating Envelope-Stuffing Scheme

O'Neal complained to the Better Business Bureau (BBB), which forwarded her complaint to the Loveland, Colo., police. Officer Mike Braband had already received 50 similar complaints.

Braband's investigation focused on 27-year-old Matthew Whitley. After screening Whitley's bank records, Braband determined the envelope stuffing business had brought in $120,000 for Whitley in just nine months -- his only source of income.

"20/20" was present as Braband arrested Whitley at his high-rent condominium complex one morning last October.

When Whitley came to the door, it seemed the police visit had woken him up after a long night of partying and playing cards at his 7-foot poker table. The apartment also boasted a large flat-screen TV and seven computers.

Whitley refused to be interviewed by "20/20." At the Loveland police station, he was charged with felony theft and felony computer crimes. He was fingerprinted, photographed and later posted $5,000 bail. Since his arrest, he's hired a lawyer and pleaded not-guilty. A jury trial is set for June 2.

"It's good to know that this guy is going to get what he deserves, because from what the police officer was telling me he was ripping off people that were stay-at-home moms, disabled, elderly on a fixed income and, and people like us -- we don't have this money to throw away," O'Neal said. "It's only $37.94, but, you know, that's my $37.94. My husband worked hard for it, you know, and we don't have money to just throw away; we have a 2-year-old daughter to take care of, we've got bills and groceries to put on the table."

O'Neal is just one of nearly 2.5 million Americans who get sucked into work-at-home scams every year, an industry that takes in $400 billion annually, according to a report by the Federal Trade Commission. In the past, scammers tended to advertise their programs with letters, classified ads and signs wrapped around telephone poles. Today, the Internet has become the standard means to reach victims because it's cheap and reaches an international audience.

'Mystery Shopping' Scams

Staffcentrix's Christine Durst says she's noticed a sharp spike in the number of scams just in the past year.

"We're definitely seeing an escalation, and the escalation, of course, is coming because there's demand," she said. "We're seeing a change in the economy. We're seeing a lot of retirees who are looking for a way to supplement their retirement income. Work-at-home moms who want to be there for their children. People are looking for extra income."

Currently, one of the most vicious work-at-home scams is known as "mystery shopping." The ads promise to pay consumers to do something they typically love to do -- shop -- and then send in written evaluations about the store and the service. Some mystery shopping is legitimate (employing about 1 million Americans every year), but Kathleen Calligan of the Middle Tennessee BBB says when it's a scam, "it's beyond cruel."

"I think with my 30 years at the BBB I've seen all kinds of scams. This one in particular is the most cruel scam I've witnessed," she said. "This ruins your financial history and your credit report. It is financially devastating to your family."

Nashville, Tenn., resident Tresea Judson was a recent victim of a mystery shopping scam, drawn in by the promise of flexible hours and good money.

"I was desperate to just get any work because work here is kind of short," she said." And I was just looking to any job so that I can pay my rent and survive."

When Judson saw an ad in the local paper offering a so-called mystery shopping position, she applied. About a week later, she received a letter from Universal Research, Inc. with a check made out to her for $3,990 dollars.

"When I saw that letter I thought it was a godsend," said Judson. "I thought it was an answered prayer that I had gotten a good job, and I was happy."

Judson was instructed to deposit the $3,990 check into her bank account. Then, within two days, she was told to find the Moneygram branch inside Wal-Mart and wire $3,500 dollars back to Universal Research. There was a $90 fee to wire money, leaving her with $400 profit to pocket. All she had to do was send in a written evaluation of how she was treated by the Moneygram employees.

Avoiding Work-at-Home Scams

"The letter said to pay attention to what goes on," said Judson, "and watch the customer service people and rate them on their performance."

Judson performed her duty, but a week after she wired the money to Universal Research, her bank said the $3,990 check she deposited had bounced. Now, Judson must pay the bank back the full amount -- money she doesn't have.

"They're threatening to sue me. They've sent me letters. They put me on 'checkmate' where I cannot get another checking account. And they've also put it on my credit report."

Consumers need to be incredibly careful when researching mystery shopping sites and offers, says Durst. Her Web site lists companies that have been vetted, and she also advises people to "look for companies that are members of the mystery shopping association."

Experts also advise anyone looking at a work-at-home offer to search for contact information for the company, and refuse to sign up for anything without it. It's important in case you need a refund down the road or have questions. In reporting this story, ABC News ultimately enlisted a private investigator -- Benn & Associates, a subsidiary of Iversen & Biondo -- to help us locate some of the owners.

There are, of course, legitimate work-at-home jobs, but no one should expect to make more than you would at a brick and mortar job. And if an offer seems too good to be true, it probably is. Christine Durbst's Web site, where she screens and rates up to 5,000 online job offers every week.