Economic uncertainty and job loss due to the COVID-19 pandemic means a record number of Americans are looking for new employment opportunities. According to the U.S. Department of Labor, the unemployment rate was 6.7% in December 2020. By comparison, the unemployment rate was 3.5% in February 2020. The increased need for employment has also created increased opportunities for fraud. While some scams are blatant, others may be more subtle. That’s why it’s critical to be aware and educate yourself about the potential for identity theft and fraud connected to your job search. Here are few warning signs that a potential employer may not be legitimate:
The Federal Trade Commission (FTC) has identified a host of work-from-home scams preying upon people who want to work remotely. From data entry, virtual personal assistants and caregivers to government and postal jobs, the fraudulent ads will tout the benefits of flexible schedules where you can “be your own boss,” earn thousands of dollars per week, with very little time and effort, and you can start right away. If you come across a job posting with claims like this, do not apply. These positions are not real. They are simply a cover for criminals to access your personal information or have you complete work with a promise of a paycheck that never arrives. Remember, if it sounds too good to be true, it probably is. The FTC lists industries that are particularly vulnerable to fraudulent postings on its website. It’s a great resource for current information to help keep your identity safe during your job search.
It should never cost you money to apply for a job. Legitimate companies do not require application, processing, or training fees when applying for employment. They won’t ask you to purchase a starter kit. If a potential employer requests a personal check or asks you to pay a fee with a credit or debit card, don’t do it. These are warning signs of potential identity theft. Scammers are eager to access personal financial information, including Social Security numbers, checking accounts, and passwords. Don’t give them the opportunity. Shut them out, and move on.
An employer’s refusal to meet with you through a video conference is a red flag. Prior to the pandemic, video conferences were common practice for companies interviewing out-of-state candidates. The practice is even more prevalent during the pandemic. If a prospective employer only communicates through text, email, or chats, consider this a warning sign. There’s no good reason for them to be elusive.
Until you formally accept a position, there is no reason for an employer to request your Social Security number or access your bank account. Never provide personal information at this stage of the process. The same holds true for companies that offer to pay you in advance. While it may be tempting to grant them permission to directly deposit funds into your account before you even start working, don’t do it. You could be left with no job and a compromised identity.
Some job scams are packaged in a neat, tidy email bundle with a message that appears to be promising for your future. Through popular social media sites, they may offer employment or the opportunity to interview for a job. If you didn’t apply for a position, proceed with caution. Flex Jobs advises job seekers to treat all unsolicited job offers as scams, and don’t engage.
When it comes to preventing fraud, we hear it time and time again: never click a link in an email from an unknown source. This is good advice, and it applies to job applications, too. If an employer encourages you to apply for a position through a link, do not click that link. If the position is legitimate, it will be posted on the company’s website and you can apply there.
One final tip for job searchers: avoid vague job descriptions. Pay particular attention to whether the position is for a full- or part-time employee, or if the company is looking for independent contractors or freelancers. It’s important to understand the difference because this will impact the way you handle your finances.
According to the Internal Revenue Service (IRS), “employers are required to withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.” If you are not hired as an employee, those financial responsibilities fall to you as the independent contractor or freelancer. That’s why it’s so important to be clear about the types of jobs you’re pursuing.
If you’re unsure about the type of job you’re applying for, just ask. Legitimate companies will make that information readily available. If freelance or independent contract work is something you may want to pursue, consider discussing it with your accountant, financial planner, or Banker. They can help you create a financial plan for success in your new endeavors.
Fidelity Bank has built a strong history as trusted advisors to clients served, and is proud to be an active member of the community. With 20 branches located throughout Northeastern Pennsylvania and the Lehigh Valley, Fidelity Bank offers full-service Trust & Investment Departments, a mortgage center, and an array of personal and business banking products and services. The Bank provides 24 hour, 7 day a week service to clients through a variety of digital banking tools, branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 1-800-388-4380.
Daniel J. Santaniello, President, and CEO, of Fidelity Bank, publishes Financially Fit with Fidelity, your guide to financial well-being, every Thursday. If you’re interested in a financial topic we haven’t yet covered or want to subscribe to our emails, please feel free to drop us a line at blog at fddbank dot com. We would love to hear from you.