Consumer Protection Data Spotlight | December 2020 1

Income scams: big promises, big losses

When the job market is tough, scammers target people 

who are looking for work or trying to bring in extra 

income. Economic conditions caused by the COVID19 pandemic may have created ideal conditions for 

these scams to proliferate. In fact, the volume of 

reports to the FTC about income scams reached the 

highest levels on record in the second quarter of 

2020.

1

These income scams take many forms. Looming large

are phony job offers involving fake checks. Schemes

that promise to teach you insider secrets to start your 

own business are part of the mix, too, as are 

investment scams promising high returns. Chain letters 

and pyramid schemes are also popping up. People 

have reported losing about $610 million from income 

scams since 2016, with nearly $150 million reported 

lost in the first nine months of 2020 alone.

Roughly one in three income scam reports is about

phony job offers with a fake check as part of the ruse.

Sometimes these scams start with an unexpected email 

about a job. For example, some college students have 

reported getting messages from someone

impersonating their school’s career services office. 

Other people have reported that the scam started after

they applied for a job or posted a resume online. After 

a speedy hiring process, people get a supposed 

paycheck to deposit. But there’s always a plausible 

explanation for why they can’t keep all the money. 

Scammers tell people hired as “mystery shoppers” to 

buy gift cards as they evaluate a retailer (the scammers 

get the gift card PIN numbers, of course). People hired 

as “virtual personal assistants” are told to send some 

of the money to a supposed supplier of home office 

equipment. Other people have even reported that their

so-called boss told them to

use some of the funds to buy 

gift cards for co-workers

sick with COVID-19. 

These scams work because 

banks have to make funds 

from deposited checks 

available within a day or 

two, but it can take weeks to 

uncover a fake. When you 

see the funds in your 

account, parting with some 

of the money may feel riskfree. But when the fake 

check ultimately bounces, 

the bank will want you to 

pay back the funds. The 

median reported loss on fake 

check job scams is $2,300,2

and adults in their 20s are 

more than three times as
Consumer Protection Data Spotlight | December 2020 2

likely to report a loss on a fake check job scam than 

other age groups.

3

Another common tactic income scams use is making

false claims about likely earnings from starting your 

own business. Business opportunity scammers promise 

attractive incomes to trick entrepreneurial people into 

buying bogus marketing services, training, or coaching 

programs. But despite testimonials that flaunt lavish 

lifestyles, their “proven systems” just don’t work.

People have reported that some scammers are even 

invoking the pandemic as part of their pitch in offering 

work-at-home “opportunities.” But these opportunities 

frequently add up to huge losses. In fact, the median 

individual loss people report on business and work-athome opportunities is $3,000, and for people in their 

60s and 70s, the reported median loss is four times 

higher.

4

Drumming up interest in investments is another 

lucrative tactic scammers deploy. Many investment 

seminar cons work by promising to teach people how 

to earn high returns on things like trading online or 

investing in real estate. But people report losing more 

on these scams than on any other fraud: the reported 

median individual loss is over $16,000. People in their 

50s and 60s are more likely than other age groups to 

report losing money on these cons,5 and their reported 

median individual losses are nearly $24,000.

Some income scams put people to work as unwitting 

accomplices in another scam, costing people their time 

and effort. People report being hired on a 30-day 

probationary period, with titles like “logistics 

manager.” The scammers tell them their job is to 

receive and reship packages. What they don’t know is 

that they’re reshipping items bought with stolen credit 

cards. And after their probationary period ends, the 

scammers simply cut off communication without ever 

paying the person.

Another variety is the pyramid scam. That old scam 

got new life by using novel names, like “blessing 

looms,” “circle games,” and “sou-sous.” A sou-sou is 

a collective savings club with historic roots in West 

Africa and the Caribbean. In a real sou-sou, money is 

rotated within a family or close-knit group, and 

everyone gets back what they contribute. Fake sousous, on the other hand, are pyramid schemes or chain 

letters. Like so-called blessing looms, they claim 

you’ll multiply the money you put in. But unlike a real 

sou-sou, payouts depend on recruiting new members –

like family and friends. People typically lose all the 

money they invest.

While reports of fake sou-sous by any name are still 

relatively low, they increased sharply starting in the 

second quarter of 2020,6 and nearly 40% of people 

who reported said they heard about the supposed 

opportunity on social media.7

It is clear that income scams take many different 

forms, but they share some tell-tale signs. Keep these 

tips in mind to avoid income scams:

• Take your time. Avoid high-pressure sales 

pitches that require you to 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 of the 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 complaint.

To learn more, visit ftc.gov/incomescams. If you spot 

a scam, report it to the FTC at ReportFraud.ftc.gov. 
Consumer Protection Data Spotlight | December 2020 3

1 In Q2 2020, 11,879 income scams were reported, a 70% increase from reports captured in Q2 2019. In total, 29,419 income scams were reported directly to the FTC in 

2020 through Q3, compared to 26,719 in all of 2019. These figures do not include the complaints collected by other organizations that contribute to Sentinel. Counting all 

reports to the FTC or any Sentinel data contributor, there were 44,274 income scam reports in 2020 through Q3 and 52,837 such reports in all of 2019. Income scams are 

defined in this Spotlight as frauds reported directly to the FTC classified as business and work-at-home opportunities, job scams and employment agencies, pyramids and 

multi-level marketing, investment seminars and advice, stocks and commodity futures trading, art, gems and rare coin investments, and miscellaneous investments. 

Additionally, reports about fake check scams that were identified through a keyword analysis as involving a job or other income opportunity are included.

2 The median individual reported dollar loss figures provided in this Spotlight are based on reports directly to the FTC for a robust and recent time period, January 2018 

through September 2020.

3 From January 2018 through September 2020, 83% of income scam reports included age information. This age comparison is normalized based on the number of loss 

reports per million population by age during this period. Population numbers were obtained from the U.S. Census Bureau Annual Estimates of the Resident Population for 

Selected Age Groups by Sex for the United States (June 2020).

4 See endnote 2. The median individual dollar loss on reports classified as business and work-at-home opportunities submitted by consumers ages 60-79 was $12,000.

5 This age comparison is based on the methodology explained in endnote 3.

6 Reports of fake sou sou scams increased from an average of less than one report per quarter from Q1 2017 through Q1 2019 to 47 reports in Q2 2020 and 191 reports in 

Q3 2020. These scams were identified through keyword analysis of the narratives provided in income scam reports. Reports about multi-level marketing companies (MLMs) 

and pyramid schemes of all types doubled in the second quarter. 

7 Reports in which the consumer heard about the fake sou sou on social media include income scam reports where the method of contact was specifically identified as 

social network, and reports where the method of contact was not specified, specified as internet, or consumer initiated contact, if the comments field also included mention 

of Facebook, Instagram, LinkedIn, Pinterest, Reddit, Snapchat, TikTok, Tumblr, Twitter, or YouTube.