Bottom-Dollar Scam

What Is a Bottom-Dollar Scam?

A bottom-dollar scam is a fraudulent claim by swindlers or con artists who prey on job seekers and vulnerable people. Bottom-dollar scams involve false promises about making substantial deals of money through avenues such as working from home, mortgage modification, debt reduction, and so on.

Understanding Bottom-Dollar Scams

Bottom-dollar scams are also known as “last-dollar” scams by the Federal Trade Commission (FTC), the consumer protection watchdog in the U.S., because they claim that their outlandish promises are solid schemes on which an individual can bet their last dollar. Such scams are particularly egregious because they target people who may be going through a financially difficult time due to job loss or illness, and being victimized by such scams in many cases worsens a desperate situation.

In 2010, in the wake of the Great Recession and the subprime mortgage crisis, the FTC launched Operation Bottom Dollar to crack down on scam artists targeting desperate job seekers. Although the unemployment rate has since dropped significantly, the FTC continues to go after bottom-dollar scammers.

Types of Bottom-Dollar Scams

At the root of many bottom-dollar scams are classic pyramid schemes. For example, in June 2018, the FTC convinced a federal judge to halt the operations of a company called MOBE (My Online Business Education) that promised to teach people how to get rich by creating their own internet businesses. After an initial fee of $49, the “students” were bombarded with up-sale pitches totaling thousands of dollars, with students experiencing thousands of dollars in debt.

The FTC identifies two big red flags in identifying a bottom-dollar scam: a requirement to pay money upfront, and the promise of a guaranteed job. It notes that bottom-dollar scams can take various forms, some of which include:

• Job ads that are run in the classified sections of publications: These tend to give the scam an air of legitimacy, and purport to offer an actual job opportunity.
• Work-from-home schemes: The most popular of these are schemes that involve stuffing envelopes or assembling crafts.
• Employment listing services: Some scams offer to give job seekers access to exclusive employment listings in exchange for an upfront fee.
• Government jobs: Some bottom-dollar scams offer access to government jobs upon a substantial payment. The FTC warns consumers to stay clear of such scams since applying for U.S. government jobs does not require an upfront payment.

To avoid getting taken in by a bottom-dollar scam, the FTC advises that a prospective job seeker ask plenty of questions and check with the Better Business Bureau for complaints about the entity offering the job.