Enter Michael Haaren, one of the country’s leading voices of online money scams. Haaren, a former Wall Street attorney, is the co-founder and CEO of Staffcentrix.com, a Web site aimed at helping people find online jobs, and co-host of RatRaceRebellion.com a site that screens thousands of online jobs a week, letting consumers know which ones are legitimate.
Haaren and partner Christine Durst have given their expertise through a variety of media sources including CNN, 20/20, Good Morning America and The Today Show, as well as in the Chicago Tribune, Fortune Magazine, the Washington Post and the New York Post.
For the work on their web sites, Haaren and Durst screen 4,500-5,000 work at home job leads every week. Their exhaustive research often produces shocking results.
“These scams are getting bigger, almost by the day; this stuff is really getting out of control,” Haaren says. “This is spreading so far so fast that it’s outstripped the ability of the authorities to corral it. We’ve been tracking this for 11 years and we’ve discovered that there is a 60-1 scam ratio of online jobs. That means that of every 61 job leads you look at online, only one is legitimate. One year ago, the scam ratio was 48-to-1; the year before that, it was 42-to-1.”
Because online scams are a dime a dozen, Haaren agreed to formulate a list of the most popular work at home scams currently going on.
1. Google Money Scams Using the popularity of the Google name, scammers promise to make you rich by teaching you how to place ads on Google. The fee, on the surface, seems small, but the fine print tells another story, and buyers find their credit cards being billed about $75 monthly for a "membership" plan.
2. Auction Listing/Rebate Processing Scams The scammers imply that you’ll be doing basic data entry work, and making good money at it. But once they get your $197 (the typical buy-in), they eventually reveal that you’ll actually be doing affiliate sales. But with no sales, you get no income.
3. The “Instant” Online Business ("Biz-in-a-Box") So many of these business-growth “programs” are spewing spam, it’s hard to know where to begin. They often carry names like “wealth builder,” “cash secret,” etc., and all promise high income quickly. Typically, the bait is big money for basic work-- typing, data entry, placing ads with Google. But the truth is, you’ll be selling everything from diets and vitamins to dating services, website hosting services, and even other work-at-home scams. Worse yet, the “kit” or “system” is often marketed as “free,” but the victim’s credit card is immediately hit with ongoing monthly “consulting” or “web hosting” fees of $39.99, $59.90, etc.
4. Check Cashing/Forwarding Often originating in Senegal, Romania, or Nigeria, this scam lures victims with promises of an easy commission (typically 15 percent) on the deposit of an apparently authentic cashier’s check--which may be a real check, stolen from a bank. The victim deposits the check and wires 85 percent to the scammers. A week or two later, when the bank declares the check fraudulent, the victim is stuck with the loss.
Authors note: This did indeed happen to me when I was trying to sell a piece of furniture through Craigslist. Fortunately, I caught on before I cashed the check.
5. Data Entry Scammers know that basic home-based administrative work is in high demand, and very scarce. (A few companies offer legitimate data entry work, but their waiting lists can be literally years long.) If you get an e-mail telling you how desperate a company is for qualified data entry specialists, it’s a scam.
6. Get Rich Taking Surveys Yes, you can make a little money – sporadically – taking surveys (usually $1-$5, more if it’s a focus group). But contrary to the scammers’ schemes, you should never have to pay a fee to take one.
7. Package Forwarding Postal forwarding losses are on the way to the $1 billion mark. In this scam, you agree to receive and repack electronics (MP3 players, video recorders, DVD players, etc.), fill out customs forms, and send the goods overseas. In exchange, the "hiring company" says they will reimburse you for shipping expenses and pay you a fee. The truth? You’re a “fence,” giving a cover of legitimacy to goods bought with stolen credit cards. Not only will you not get paid, you may be arrested for shipping stolen goods and the misleading information you put on the customs forms.
8. Mystery Shopping Before, this scam usually involved selling you an outdated list of companies that hire mystery shoppers. Now, scammers lure victims with a nice cashier’s check to be used for the shopping. You deposit the apparently-legit check, buy whatever you want up to a certain limit, then wire the balance of the funds back to the scammers via MoneyGram or Western Union. Later, the bank discovers the check is bogus, and the victim is on the hook for the funds--and may be answering Federal questions about bank fraud.
9. Order Processor Jobs (aka E-mail Processing) In this e-version of the classic envelope-stuffing scam (see No. 10), you’re asked to pay a fee to learn how to make money processing orders from ads that you’ll place on the internet. But your chance to “process orders” comes when you turn into a scammer yourself, and start sending the same scam to your own victims.
10. Envelope Stuffing Typically, you’re asked to send money to learn how to make money stuffing envelopes. Then, you either receive nothing, or a letter instructing you to place the same ad that you yourself replied to, so you can scam others the same way you were scammed. (Remember: companies have machines to stuff envelopes.)
But who would possibly fall for these? Surely people are smarter than to accept whatever offer comes their way.
“Well in hindsight, everything seems simpler. The fact is, the FBI just released its annual internet fraud figures and the dollar amount was roughly 565 million in consumer losses between 2008-2009. But here’s the kicker: it’s been estimated by the National White Collar Crime Center that fewer than 1 out of 10 victims complains to the authorities, so if you do the math that’s 5.65 billion in losses.”
The issue isn’t with the average consumer’s intelligence, but more with the sophistication of some scams.
“Scams are getting more complex, yet smarter. You have to watch out how current these scams are. There’s a lot of IRS scams because people are filing their taxes. And when you hear that there is a massive earthquake in Haiti, you can be sure that there will be a Haiti donation scam posted that afternoon. Whenever a big headline comes out, it’s a new hook for a scammer. It’s always developing.”
While Haaren admits there is a fair share of American-based scams, most, he says, generate overseas.
“There was a group of hackers in Ukraine, called Innovative Marketing Ukraine, literally a whole building full of gifted hackers working for this company. All they do all day is churn out code and send it everywhere. The shame is that, if these guys lived here, they could easily get a legitimate job on Wall Street or in Silicon Valley, but in their country, they just don’t have those resources.”
While Haaren feels that authorities are having trouble keeping up with crafty scammers, he does offer several tips in avoiding scams, and how to find a real job online.
“There are several red flags a consumer can look out for,” he says. The jobs are hard to find, but they really are out there.”
Stay tuned next week for part II of A Scammers Paradise as Haaren discusses those red flags and ways to secure a legitimate job online.
Oh God the get rich taking survey's scheme. That was awful.