Federal agencies are targeting a number of scam operations that they believe prey on jobless Americans' desperation by offering them work at home schemes, access to supposedly hidden job listings and other too-good-to-be-true opportunities that require significant costs and provide little return.
The Federal Trade Commission (FTC), which has the authority to shut down business operations in a company it believes is using deceptive practices, has already done so at about a dozen companies, according to the Washington Post. The Justice Department, the Postal Inspection Service and various state law enforcement agencies have also participated in the year-long sweep, named "Operation Empty Promises." During that time, the Justice Department has won 48 cases regarding job scams, the Postal Inspection Service brought seven civil actions and state authorities investigated 28 cases, according to the news source.
In participating in these scams, consumers risked "their limited financial resources in response to the promise of a job, an income or the chance to build a profitable home-based businesses," explained David C. Vladeck, the director of the consumer protection arm of the Federal Trade Commission. "But these turned out to be empty promises. And the people who counted on them ended up even deeper in debt."
Three of the businesses that have been sued by the FTC are accused of defrauding consumers out of $49.5 million, according to the New York Times.
One of the companies that has been targeted by the FTC as part of the sweep was the Santa Barbara-based National Sales Group, which was accused of putting phony job listings on an online job board in order to charge applicants a fee for background checks. This outfit alone generated 17,000 complaints to law enforcement agencies, according to the Post.
Perhaps the most significant alleged fraudster investigated by the FTC was Ivy Capital, which promised to help workers start their own at-home internet businesses and earn as much as $10,000 per month. The Commission accused Ivy of scamming consumers out of $40 million in tax advice and access to credit services that consumers were never actually given. Each consumer who had been duped into using Ivy's services had paid up to $20,000 for a variety of phony business advisory services such as these, it was alleged.
Among the consumers who ended up trying to work with Ivy as a last resort after failing to find traditional employment was Floridian Tom Bernard. According to the Post, he said he signed up for the company's services in 2009 after he was laid off from his job. He was skeptical, but he also felt he needed to find a way to make a living, and thought the program would be a way to "help tide me over."
Bernard ended up paying $12,000 for the firm's business services before he realized he wasn't getting anything close to the promised results. When he asked for a refund, the company allegedly only gave him $400 of the money he spent back, and he said he is still unemployed and struggling to pay off the debt he's accumulated due to his experience with Ivy.
Bernard is one of many - according to the Los Angeles Times, the FTC received 22,896 complaints about employment scams involving supposed business opportunities and work-at-home schemes. Scam operations have become so common that they've given rise to another questionable consumer service, according to the Post. Among the firms investigated by the FTC and the Justice Department was a company that promised to recover money consumers lost in employment schemes. In an ironic twist, Business Recovery Services, the firm in question, charged consumers up to $500 up-front for its recovery services and produced few results, the agencies claimed.