WASHINGTON – The Federal Trade Commission said Wednesday that it is cracking down on con artists who target the unemployed with bogus job placement and work-at-home scams.
The consumer protection agency said it has asked federal courts to shut down seven entities charged with peddling such schemes and to freeze their assets.
The Justice Department has pursued criminal action in 44 additional cases and state attorneys general are pursuing 18 more, FTC officials said.
The agency is also increasing its efforts to educate job-seekers on avoiding the scams. Any advertisement or pitch that promises job listings in return for a fee or promises a business opportunity in return for an up-front investment is likely fraudulent, the agency said.
David Vladeck, director of the FTC's bureau of consumer protection, said such schemes aren't new but are taking advantage of the increasing number of people who are unemployed or working fewer hours due to the recession, the worst downturn since the 1930s.
"These are scam artists targeting the most vulnerable people," he said. "They are tricking job seekers into parting with their last dollars."
There are 14.8 million jobless Americans, the Labor Department said earlier this month, almost double the 7.7 million out of work when the recession began. There another 11 million people who are working part-time but would prefer full-time work or who have become discouraged and given up on their job searches.
Among the seven cases announced Wednesday were charges against a company called Entertainment Work Inc. that listed jobs for television and movie extras. The company "deceptively claimed" that in return for a membership fee to its Web site, job-seekers would find work near their homes in the entertainment industry, the FTC said.
The company has agreed to an interim court order halting its alleged misconduct, the FTC said.
Another company, Abili-Staff, sold work-at-home job listings for $29.98 to $89.99 and falsely said the fees would provide access to more than 1,000 "scam-free" work-at-home jobs, the agency said.
The FTC pursued another company, Career Hotline Inc., earlier this year that Cathy Willburn, a resident of Grandview, Texas, bilked her. She lost a job in October 2008.
Willburn, who participated in the FTC's press conference, said she responded to a classfied ad last June that promised jobs as forklift drivers and other warehouse work.
Career Hotline told her that it helped fill jobs for Fortune 500 companies, Willburn said. Once she paid an $89 fee so she could access its list of jobs and be working in 14 days.
Willburn borrowed the money and paid the fee but never heard back from the company, even after she left messages saying she was out of work and couldn't afford to lose the money.
"People are desperate for work, but you've got people looking to take advantage of that," she said.
Willburn now has a job at a Pier 1 Imports distribution center.
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