Recruitment scams: common types, how to spot them, and their impact on business

With work-from-home and remote job postings on the upswing, it isn’t surprising that recruitment scams are likewise on the rise. While it’s often the job seekers who bear the brunt of the impact, being unwittingly entangled in these fraudulent acts can also have adverse effects on employers.    

In this article, Canadian HR Reporter delves deeper into how employment scams work. We will discuss the different tactics fraudsters employ to lure jobseekers and give tips on how companies can protect themselves and their workforce.  

If you’re an employer or an HR professional, you can use this guide to assess your hiring process. It can also help ensure that your job postings don’t look like recruitment scams and turn off potential candidates.  

How do recruitment scams work? 

Recruitment scams involve fake job listings designed to trick job seekers into giving away personal information or money in exchange for job offers or interviews. To lure victims, scammers often impersonate real businesses and organizations. 

Another factor that makes employment scams hard to spot is that they’re often advertised the way legitimate postings are. Fake job listings lurk in popular job boards, including Indeed and LinkedIn. Some are posted on social media.  

While using digital means and social media platforms to perform recruitment scams is new, the idea is not, says Cuneyt Karul, vice-president of IT and security operations at Hootsuite. In 2022, the company discovered that its name was being used in a fake recruitment scheme. 

“When it happened, we started researching and I found a lot of cases dating to a couple of years back,” he explains. “I even learned that this is actually a very typical scam that even existed before social media, so scamming people for the promise of a job is, unfortunately, quite old.” 

The Canadian Anti-Fraud Centre (CAFC) also warns of scams targeting job seekers using counterfeit cheques or “financial agents” to take their money or private information. 

The Edmonton Police Service has cautioned applicants on the prevalence of fake job postings, explaining on its website how recruitment scams work:   

 “Scammers are using advanced tactics to appear legitimate. Scammers use a ‘fake maker’ to construct a realistic online presence to help sell the scam. They create fake company websites or clone real ones, fake banks with websites, official looking employment documents like offer forms, tax forms, personal information forms, and banking deposit information forms.” 

In 2022, its latest record, the Edmonton Police received 148 reports of employment scams. These have resulted in $359,831 in financial losses. 

What are the common types of recruitment scams? 

Recruitment scams come in different forms, but the goal is always to extort victims of personal information or money. Here are some of the most common types of employment scams to watch out for. 

Application/screening fee scams 

Scammers ask the candidate for an application or screening fee to cover the cost of a background or credit check. They may also charge a fee for training, guaranteeing employment once completed. Legitimate companies, of course, do not charge applicants fees in exchange for employment.  

Fake cheque scams 

This type of recruitment scam comes in different forms, but often works the same. Here, scammers instruct job seekers to deposit a cheque in their account, send part of the money to another person or business, and keep the rest.  

Fraudsters may also ask applicants to purchase materials, equipment, or other supplies. Some offer to pay for car wrap advertisements on the victim’s vehicle. The result is always a bounced cheque, leaving the job hunter to pay for the full amount.    

Mystery shopper scams 

Scammers send a text message, email, or advertisement asking the victim to contact them for a “mystery shopper” opportunity. If the person accepts, the fraudster sends them a cheque and instructs them to spend a portion of the money at different stores to assess their products and services. The victim is also asked to send the rest of the money back. The fake cheque then bounces, with the victim ending up spending their own money.    

What makes this type of employment scam hard to catch is that there are legitimate mystery shopper opportunities out there.  

Phishing scams  

Phishing scams are common even outside the recruitment scene and work almost the same. In the job market, fake recruiters attempt to steal a victim’s personal details by sending a text or email responding to a resume they have posted. Some will also direct a job seeker to an application or credit check on their bogus website to get their personal information. Scammers then use the information they gather to steal the victim’s identity.  

Recruitment agency scams 

Scammers pretend to be legitimate recruitment and placement agencies and charge applicants for fees for their services. Job seekers must be aware that reputable recruitment agencies are compensated by the employers for finding the right talent. Real employment agencies don’t ask candidates to pay fees. 

Beware of the Growing Scourge of Job Recruitment Scams: Job recruitment scams have grown into a huge problem. The BBB reports that in the U.S. and Canada alone, an estimated 14 million people are exposed to job scams every year, with $2 billion in direct… https://t.co/wTOOPcjSo3 pic.twitter.com/i0kjMmGNDl

— Global Cyber Threat Intel (@cipherstorm) July 6, 2023

How do recruitment scams impact businesses? 

While recruitment scams impact job seekers directly, companies often receive collateral damage. The backlash happens when scammers impersonate an employee from a legitimate business, which can harm the employer’s reputation.  

“The biggest impact is the negative publicity because again, this has nothing to do with us, because both the attacker and the victim are totally outside of Hootsuite,” Karul explains. “So, the only link is the fact that they use our brands, and some victims fall for it. The damage for our company is mostly it is not a good branding issue.” 

Scammers have preyed on potential candidates by impersonating recruiters and hiring managers at Hootsuite. The company posted a blog about the issue to warn job seekers. 

“We had one or two cases that happened recently where an interview was held with that person and after the interview, they even received a job offer with official looking papers, asking about their personal information, social insurance number, bank account, and in one case, they actually asked for money. 

“Then that person who impersonated HR was trying to reach out from random people who are not part of our company at all.” 

For some companies, being dragged into an employment scam may cause recruitment issues. This is because potential candidates may associate the brand with recruitment scams.  

How to spot recruitment scams: red flags to watch out for 

For job seekers, there are obvious signs pointing out that a job offer isn’t real. Here are some common red flags of a fake job posting, according to experts.  

Random job offers 

Job hunters should be cautious of random job offers as legitimate companies would never send job opportunities indiscriminately.  

“One of the main signs is you didn’t apply for the job, and an employer contacts you and says, ‘Hey, you got the job.’ That’s a big warning sign,” says Hussam Eldib, international student career advisor at Mohawk College in Hamilton, Ontario.  

He adds that this tactic often works with students as they tend to apply for a lot of jobs and lose track of the ones they have applied to.  

Communication is only via text messages and online chats 

If the recruiter uses only certain apps – such as Telegram and WhatsApp – as a means of communication, job seekers must be careful. 

“Encrypted texting services are pretty suspicious,” warns Karul. “It is very widely used in the underground of the cybersecurity-crime world because it’s anonymous, so if somebody receives a message that is not very typical, they should be very cautious about it.” 

He adds that even when it comes to job postings on legitimate job boards such as LinkedIn, there are a few things to check after a message arrives. 

“Check the profile individually, not just respond but see if the profile is old enough? Does it have posts? Does it have connections? Actually, one case, we found an individual who did a good job faking that it looked like he was a Hootsuite employee. It looked like [he was] a part of our organization but we went to our databases going back two years, we didn’t find any record of that person.” 

Job offer lacks important details 

Fake job offers do not often have a lot of details. This is the opposite of how most legitimate job postings are presented.  

“We spend a lot of time writing down our positions,” Karul notes. “Our job positions are usually very detailed and if they receive a job description that is very, very high level, that is one thing that should alert them.” 

Job offer is just too good to be true 

When looking for a job, Eldib reminds applicants of an old maxim.  

“If it’s too good to be true, it probably isn’t. That’s the sort of mentality that we hope our students take when they’re job searching because a lot of the times when you’re short on money as a student, and a great opportunity presents itself, you’re more likely to get scammed, just because you want it so badly, and you think it’s going to fix a lot of problems. 

“If the salary is way too high for the actual job and what you’re doing, if they’re saying you’re getting $1,000 a week for minimal work and no experience required, no education required, that’s a big, big red flag.” 

Find out what it takes to be a successful recruiter straight from an expert.  

What should employers do if they’re being used in a recruitment scam? 

Once you’ve become aware that your company’s name has been dragged into an employment scam, you must respond quickly to stop the malicious actors. Here are some of the steps you need to take.  

Speak out.  

Scammers will likely keep at a fraud if it is successful. Once you’ve discovered the scam, consider putting out a public statement to warn potential victims of the fraudulent activity. Post announcements on your website, social media accounts, and profiles on job boards such as Indeed, LinkedIn, and ZipRecruiter. This can also help deter scammers. 

Report the scam to the authorities. 

Reporting the recruitment scam to law enforcement can help impede the fraudulent activity. You can contact the Canadian Anti-Fraud Centre at 1-888-495-8501. You can also report the scam to local authorities. 

Keep documentation. 

Be sure to document the recruitment scam and the financial losses the business has suffered because of it. Keep these records as law enforcement may ask for them when building a case against the scammers. You may also, through counsel, send a cease-and-desist letter to the malicious actors directly. 

How can you protect your business against recruitment scams? 

Companies can implement several measures to safeguard their reputation and protect potential candidates from being unwittingly entangled in employment scams. Here are some best practices: 

• Monitor your job listings regularly to identify any unauthorized postings. This also allows you to maintain control over your online presence and your business’ brand. 

• Direct job seekers to your official website or designated recruitment channels to make sure that they’re accessing legitimate job opportunities. Your careers page must also list all the websites and platforms where your listings can be found.   

• Let applicants know about what information they will and will not need to provide during the hiring process. It helps to inform them that you will not request any private details such as social insurance number and bank accounts.  

• Be transparent about your recruitment process. Tell job seekers if you’re using recruitment firms or in-house recruiters only. 

• Educate your HR team and potential candidates about common employment scams and what to watch out for. Ensure that they remain informed and vigilant throughout the recruitment process. 

• Enforce verification procedures to check the authenticity of all job postings and inquiries. This reduces the risk of your business being used in recruitment scams. 

• Watch out for scammers cloning your website to commit fraudulent recruitment activities. You can usually have fake websites taken down by filing reports with the web or email domain hosting companies. 

• Have a point of contact on your HR or recruitment team where job seekers can verify that the communication they receive is from your company. 

Another way of safeguarding your business against employment scams is by keeping abreast of the latest developments in the industry. You can do this by checking out our Recruitment & Staffing News Section. Be sure to bookmark this page to access breaking news and the latest industry trends.  

Has your business ever been unwittingly used in recruitment scams? How did you respond to it? Let us know in the comments