With record unemployment and the ongoing financial impact of the pandemic, many Americans are struggling to make ends meet — and scammers are pitching income scams with false promises of success and financial security.

In a typical pitch, scammers state that you can make a lot of money, for example, working from home with little time and effort, or starting your own online business. But those promises of big money are all an income illusion. In fact, in the first nine months of 2020 alone, Americans reported to the FTC that they lost at least $150 million. The total amount of alleged losses is over $1 billion.

Sometimes these scammers focus their pitches on particular communities.  In one case, a work-from-home scam targeted Latinas through Spanish language TV ads. In another case, an alleged investment scam affected older adults, retirees, and immigrants. And even veterans, students, and college-age adults are targeted with a business coaching scam.

The Federal Trade Commission (FTC) found in income scams the average loss was less than $500. Americans who lost money were 44% more likely to live in majority Black communities.

How to Spot an Income Scam

Everyone can be targeted by income scams.  A scammer’s offer may tell you that:

• Make money selling in your community. Be your own boss.
• Learn from the experts how to generate guarantee income.
• You got the job! Deposit this check and send money or buy gift cards.
• Work from home and make money with little time and effort!
• Just recruit more people to make big money!

Before you accept a business offer:

• Take your time

Avoid high pressure sales pitches that require you get involved now or risk losing out.

• Be skeptical about success stories and testimonials.

Glowing stories could be fake and online reviews may have come from made-up profiles.

• Don’t bank on a “cleared” check.

If you’re told to send some money or buy gift cards, you can bet it’s a fake even if you see the   money in your account.

• Do your research.

Search online for the company’s name plus words like “review,” “scam,” or “complaints.

For more information, click here.

Teaching Suggestions

• Ask students if they, their friends, or families have received such offers from scammers. If so, how did they respond?
• Ask students what they would personally do to fight income scams and help people recognize and avoid them.

Discussion Questions

1. Why do scammers focus their pitches on particular communities?
2. Why is it important to search online for company’s name plus words like “review”, “scams”, and “complaints” before making a decision”?