WASHINGTON — The Federal Trade Commission said last week 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 jobseekers 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 upfront 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 are 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 last week 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, jobseekers 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. Company representatives couldn’t be reached for comment.
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.
Adam Cortez, an attorney representing Abili-Staff, said the company posts “legitimate jobs” and has given refunds to more than 700 customers who have complained.
The company is fighting the FTC’s charges in court and expects a ruling by the end of the month.
Cathy Willburn, a resident of Grandview, Texas, said she was bilked by Career Hotline Inc., a company the FTC pursued last year.
Willburn, who participated in the FTC’s press conference, said she responded to a classified ad last June that promised jobs as forklift drivers and other warehouse work.
Career Hotline, which was based in Florida, told her that it helped fill jobs for Fortune 500 companies, Willburn said. Once she paid an $89 fee she would be able to access its list of jobs and would be working in 14 days, the company said.
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.
Meanwhile, the FTC said it reached a settlement with Susan Bright, the owner of Career Hotline, which is now out of business. The settlement includes a $75,000 penalty that has been suspended due to Bright’s inability to pay.