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The Red, Yellow, and Green Flags of Job Searching

Job searching can be stressful, so it’s natural to be excited about interviews and offers. Unfortunately, not all job opportunities are what they seem. Criminals and dishonest companies pretend to offer real, fulfilling jobs, but don't be fooled. These organizations and scammers only want to make money off employees and applicants. They over-promise, under-deliver, and leave job-seekers worse off than when they started.

This lesson will teach you to spot the red flags, or warning signs, of scams and shady job offers. You should stay away when you see red flags in your job search. Avoiding these offers will let you focus on finding the job you deserve while helping you save your time, money, and credit.

When you’re under pressure to find a job, you may want to consider every option, but that makes it easy to fall for one of the biggest threats in job searching: the hiring scam. Criminals and liars all over the Internet, even on reliable job posting sites, claim to represent real or made-up businesses. No good can come from interacting with these “companies.” The jobs they advertise don’t exist. They take advantage of the stresses of job hunting to cheat people out of their personal information and money.

Hiring scams are surprisingly common. The US Federal Trade Commission reports that in the first three months of 2022, Americans were scammed out of 68 million dollars. Here are just a few ways these scammers can try to fool you. They might ask you to…

• Pay upfront for a certification, a service charge, or a background check. Once they have your payment or payment information, you won’t hear from them again.
• Send personal information like your social security number, driver’s license number, phone number, etc. Scammers can use this information to steal your identity.
• Repackage and ship items delivered to your house or cash checks and send part of the money to another address. These schemes are often used to move stolen merchandise or pass off fake checks as real and leave you to pay back the bank when the error is discovered.

When it comes to scams like these, there are a few simple guidelines you can follow to protect yourself.

1. Never pay money upfront for a job.
2. Do not send private, personal information before you are hired for a position.
3. Keep a list of jobs you’ve applied to, and don’t respond to companies that aren’t on your list. Often repackaging and check cashing scams find your information online and contact you directly because those types of job postings are taken down from online job search sites.

Poor Business Communication

Hiring scams aren’t always easy to spot at first, but the good news is that scammers have a hard time faking professional business communication. A large business like a restaurant chain or a bank has specific policies about interviewing, hiring, and responding to applicants. Scammers tend to operate alone or in small groups, so they’ll make unprofessional mistakes that you can spot. Here are some signs that you might be dealing with a scammer:

• Spelling and Grammar Mistakes: People make mistakes, but companies are better at catching errors than individuals. Copying and pasting the messages you receive into a Google Doc or sites like Grammarly will help you see mistakes you might miss on a quick read. You're probably not dealing with a real company if you’re receiving messages with lots of typos or bad grammar.
• Fake Emails: Most companies pay for professional email accounts for their employees, usually containing the company name. In general, it’s safer to ignore emails from a personal account claiming to represent a company or an email that looks off (like “[email protected]” or “[email protected]”).
• Odd Interview Process: Every company has a slightly different interview process, but some interview requests are giveaways that you’re dealing with a scammer. First, it’s incredibly rare to receive a job offer without an interview. Second, while in-person interviews are less common than they used to be, some online interviews are more suspicious than others. Real jobs don’t interview over instant messengers like Yahoo IM or Facebook. You should be worried if you receive an offer without seeing anyone’s face. Finally, be wary of interviews that don’t leave you room to ask questions or push you to make a decision immediately.

In the following activity, imagine a friend is texting you to tell you about a job offer they’re considering. Choose the responses you think will help your friend avoid falling for a job scam.

Researching and Reporting Scams

Another great way to combat hiring scams is by searching the web to see which jobs you can trust. You can do this simply by typing in the name of the person contacting you about the job, their company, or a sentence from the message, along with the word “scam.” But if you want to be thorough, you can research and report scams through the Better Business Bureau (BBB). The BBB exists to help consumers figure out which businesses are trustworthy and which aren’t. To help, they’ve created the Scam Tracker. You can use this tool to see what scams have been reported in your area. Search by “Employment” under “Scam Type” and select your state to see a list of reported scams and the amount of money people lost to each. You can also search by keywords if you are concerned about a company or name from your job searching.

In addition to hiring scams, you also need to look out for jobs that make their money without guaranteeing you anything in return. Unlike hiring scams, these jobs are real and legal, but don’t let them fool you. Some companies are happy to use you for profit and leave you in debt. Often, these companies are Multi-Level Marketing schemes. These organizations, sometimes called MLMs, advertise themselves as network marketing, referral marketing, or direct marketing businesses. No matter what they’re called, the system looks the same. Instead of hiring employees, MLMs sell their products to resellers (also called recruits). These resellers are encouraged to sell to and recruit friends and family to earn money, though very few make back enough to cover what they paid to get started.

To learn more about why so many MLM resellers lose money, watch the video below.

As with hiring scams, you should steer clear of any organization asking you to pay upfront before you begin making money. These systems are called “pay-to-play” schemes, and by paying cash to an MLM for resale products, you take all of the risks away from the company and put them on yourself. The company gets paid right away, but if the products don’t sell, you lose money and have to store or throw away the supplies you bought.

There are also hidden costs when working in an MLM. Many organizations suggest “networking” by hosting parties and selling to friends and family, which can lead to food, drink, and transportation costs. Recommended “Training” Retreats or pushes to sell the latest product can drain your savings as well. And if you pay for any of your MLM expenses with a credit card, interest can quickly add up.

Despite all of the drawbacks of joining an MLM, many still successfully bring in recruits. Company representatives are great at saying what people want to hear. You can help yourself avoid losing time and money by reviewing the plans MLMs use to bring in new resellers below.

MLMs…

• “Sell” the Idea of Being In Charge: Many MLMs try to get recruits excited about being their own bosses and deciding their own schedules. That’s not as much of a benefit as it seems, though. The company doesn’t need you to make your sales or pay you for any of those hours.
• Celebrate Small Sales: MLMs celebrate when new members make their first sales. Early on, friends and family tend to be supportive when someone starts a new job. These small successes rarely last, though. Without consistent sales every month, recruits don’t earn back their money.
• Create Images of Success: Social media feeds often show MLM resellers at the highest levels and offer expensive prizes to members who recruit and sell the most. They want people to think about the company and big money at the same time, even though very, very few people will reach those levels.  These unrealistic goals keep resellers involved in the company by giving them false hope.
• Push Exaggerated Products: MLMs try to get people excited about their products by making them seem like something everyone should want. There’s a reason that many of these companies sell beauty products and diet supplies. They make products seem glamorous or miraculous (like life-changing skin cream and effortless weight-loss shakes) because it makes recruits believe that selling will be easy.
• Use Friendly Faces: This is one of the biggest reasons MLMs continue finding recruits. According to an AARP study of MLMs in 2018, about 60% of surveyed MLM resellers were recruited by friends, neighbors, coworkers, or family. It’s easy to get excited about a business supported by trusted friends and family, and companies make the most of that. And if a recruit loses money, that may hurt those relationships but not the company.

If you know someone who’s thinking about getting involved in an MLM and you’re worried about their experience, read the article linked below for advice on how to talk about the challenges.

Most red flags in job searching come down to one issue: dishonesty. Even jobs that aren’t scams or MLMs can still create big problems. When you start a new job, you deserve openness and honesty about the job, company, benefits, and challenges you should expect. If that job misleads you, you may end up leaving or turning down better jobs for one that wasn't what you hoped. And if your company doesn't have the wages or benefits you expected, you're stuck with the consequences. With that in mind, let’s consider some more red flags you should know about.

Misleading Companies

You should steer clear of companies that aren’t clear about how their business works or what they do. But how will you know these companies when you see them? Here are a few ways.

• “Miracle” Products: Some companies will exaggerate the value of the things they sell, much like MLMs. They promise that their products will help you lose weight or make money quickly. If these products worked, everyone would use them, and they would be sold almost everywhere. But most of these companies claim to have a secret recipe or patent that only they know about. And if you have any doubts that a product works, you don’t want to be in business with the company selling it.
• General Vagueness: When you read a job description or finish an interview, you should have a very good idea of what the day-to-day work of that job looks like. It’s a bad sign if a company is vague about what you will be doing or what the whole company does. Often, this is a sign that the company has something to hide: expectations that they don’t want you to know about until you’ve signed a contract or problems within the company that aren’t being fixed.

Unrealistic Salaries

It’s natural to be curious whether you could make more money at a new job, but if the money seems too good to be true, it probably is. Some salaries listed online are flat-out lies. Others aren’t lies but are so exaggerated that they may as well be. In either case, you should be cautious. Well-run companies don’t have to attract employees with promises of huge money. Read the examples below to learn more about what makes a salary unrealistic.

Understanding Commissions: If you work on commission, you make money when you sell a product or complete a task, no matter how long it takes. This would be great if everything worked out perfectly: you could work as fast as possible, make good money, and have free time to spare. But you can’t count on things working out perfectly. You might try to make a sale all week, but if it doesn’t work out, you won’t make a cent.

So when jobs that pay by commission talk about money, you have to be careful. You’ll often see the phrase “earn up to…”. Keep in mind that is the most you could possibly make. Ask yourself, how many people make the most available? How much does the average person make? And can workers get by on a low monthly commission? Being paid on commission by itself isn’t a red flag, but a company that doesn’t offer realistic expectations for the commission is.

Hourly Earnings and Actual Earnings: On the other hand, some jobs will offer very high hourly pay. You may be thrilled to see this if you’re used to working 40 hours a week, but you can’t always assume you’ll work full time. Some jobs that make high hourly wages work at odd or unpredictable hours, which makes it difficult to work other jobs in your spare time. If your employer exaggerates or is vague about the difference between your hourly earnings and your actual earnings, it’s probably because you’re going to make less than you first expected.

Scams and dishonest companies can be discouraging, but it’s important to remember that there are a lot of good jobs out there. Learning about the worst job-searching experiences will make it easier to spot them and focus on the jobs you really want. And if you’re worried about missing an opportunity or falling for an offer you shouldn’t, you can use the checklist linked below as a guide or talk to friends and family about your concerns. Remember to take your time and think through your options. Rushed decisions can lead to expensive mistakes, but a little knowledge can help you find your way in the job market and end up where you want to be.