Close this search box.

Rising risk of fraud in an increasingly digital labour market

Vaidotas Sedys, Head of Risk Management at Oxylabs, discusses how organisations can face the risks of fraud in an increasingly digital labour market.

The development of network technologies and the digitalization of business has opened the doors for the labour market to become truly global. Companies whose crucial daily tasks are done chiefly on computers can look for talent all over the world. On the other hand, specialists don’t need to choose between home and excellent professional opportunities anymore. Digitalization unchained a generation of digital nomads who combine constant travelling with work.

However, the virtualization of working relations also created additional risks of fraud and victimization for both recruiting companies and job seekers. Technological advancements often amplify these risks. Yet, technology also helps counter the work of fraudsters.

Online identity crisis

Peter Steiner’s famous cartoon captioned “On the Internet, nobody knows you’re a dog” was just an easy-going joke when first published in 1993. As the web and its usage grew, it became evident that the joke touches upon one of its most significant features—the trickiness of online identity.

While no dog has yet been proven to misuse online anonymity, malicious actors who often use bots for automation create millions of deceptive profiles on the Internet. The desire to stay anonymous when browsing the web is understandable and within our rights. However, bad actors take advantage of this anonymity and social media bots to create fake identities or steal the real ones.

Improved artificial intelligence technology is only going to muddy the waters even more. In addition to not knowing whether the comments we read are written by humans and not AI solutions, we now have reason to doubt whether the videos we see show actual people. These uncertainties surrounding online identity provide a ripe ground for data theft, qualifications fraud, brand misuse, and other market fraud, hurting those on both sides of the hiring process.

Dangers to job seekers

Online recruitment scams are distributed in various channels. While browsing the net, one will likely come across sponsored ads and links in social media comments with too-good-to-be-true job offers. The scammers reach even those who refrain from scrolling the forums and comments by bombarding them with fake offers on WhatsApp and other popular messaging apps.

Some of these scams are easy to spot for those with experience in the labour market. A message offering to work from home for 2 hours a day, making thousands of dollars, can hardly fool a seasoned professional. However, even cautious specialists are not immune to more sophisticated scams.

Criminals will invest more time and resources to tailor scams to high-ranking job seekers who are likely to be better off financially than unqualified workers. Thus, they can send convincing documentation or trial task materials possibly stolen from actual firms. These targeted scams can be especially effective in times of low demand for particular types of advanced skills. We are all prone to lower our guard when a rare and lucrative opportunity is presented very professionally.

These scams aim to get money from job applicants directly or steal their data for later use. In the first case, the fraudster can ask for an upfront payment to cover the costs of checking criminal records or for some pre-work training, claiming that it will be repaid after a successful application. In the second case, fraudsters can use the data shared by the job seeker to hijack their bank account or apply for credit in their name.

Well-known brands become tools in these scams. Criminals take advantage of the trust and prominence associated with established brands when preying on job seekers. Firstly, they exploit reputable profession-oriented platforms like LinkedIn and Indeed by creating fake profiles and job ads. Additionally, they often claim association with real companies, from world-leading brands to established and reputable recruitment agencies.

Labour fraud leading to further threats

There have always been dishonest applicants hurting businesses in one way or another. At best, qualification fraud leads to subpar performance by the new hire, which can already be very costly for the business. At worst, it can lead to financial, legal, and reputational damage.

Technology and the surge of remote work have taken labour fraud to another level. The FBI warned about the increased usage of voice spoofing deepfakes and stolen credentials to apply for remote work during the pandemic. Since then, the technology to create forgeries, including visual deepfakes, has only improved, thus also increasing the many risks for employers.

Hiring someone with a stolen identity might invite data thieves into your company network. Once inside, bad actors can commit further occupational fraud, likely the world’s most costly type of financial fraud. Even in less extreme cases, giving the job to someone with fake qualifications or without the right to work in specific jurisdictions can lead to legal and reputational problems.

Methods of protection

No one is entirely safe from falling victim to online labour market frauds. However, some best practices increase the chances of both job seekers and employers to stop the scam before it can do grave damage.

Good old prudence protects the workers

Job seekers deal with job opportunities on a case-by-case basis, scrutinizing them manually. Prudence and attentiveness to details are crucial here. When coming across a work offer on a particular platform, the first thing to do is check if the company exists and if the associated person works there. Visiting the official website, company pages on professional and general social media platforms, and trusted employee review sites can help verify the business.

The fraudster might be hiding behind the name of an actual company employee. Thus, when feeling suspicious, it is best to contact the company through a different channel to get verification before sending any personal information. Of course, apt anti-virus protection should be used to scan any sent-through materials for malware.

Employers need modern solutions

Intensive global hiring leads to receiving hundreds or thousands of applications with credentials listing experience or degrees gained from diverse institutions in various countries. Thus, businesses cannot rely on manual credential check-ups and must implement automated solutions. Proxy-supported email protection tools can be used to scan and sandbox suspicious applications. Pieces of malicious code can be hidden anywhere within the email or the documents received.

Companies also need tools or services to check the credentials and criminal record of the applicant, which might mean going over public data from institutions and registries all over the world. However, if you want to scan the whole Internet, you may need country-specific proxies to access such registries on a larger scale.

Summing up

Both employers and employment seekers suffer in many ways, including financially and emotionally, when falling victim to labour market scams. Thus, professionals at both ends of the line need to be prudent and use the best resources available to safeguard the legitimacy of the online recruitment process. At the same time, we must seek to make the improving technology work better for us than it does for the criminals.

    Read more

    Latest News

    Read More

    Is there equality on Mars?

    22 July 2024


    Receive the latest HR news and strategic content

    Please note, as per the GDPR Legislation, we need to ensure you are ‘Opted In’ to receive updates from ‘theHRDIRECTOR’. We will NEVER sell, rent, share or give away your data to third parties. We only use it to send information about our products and updates within the HR space To see our Privacy Policy – click here

    Latest HR Jobs

    University Of The Arts LondonSalary: £32,624 to £39,342 per annum

    University of Oxford – Radcliffe Department of Medicine, MRC Weatherall Institute of Molecular MedicineSalary: £28,759 to £33,966 per annum, with a discretionary range to £37,099

    Swansea University – Human ResourcesSalary: £45,585 to £54,395 per annum

    Job Title: HR Director Location: Kent, United Kingdom Job Type: Full-time Salary: £60,000-£80,000pa Job Description: Reed HR are seeking an experienced HR Director to join

    Read the latest digital issue of theHRDIRECTOR for FREE

    Read the latest digital issue of theHRDIRECTOR for FREE