Chris O’Reilly, 28, turned to the freelancing website Upwork when he lost his job in March after the country went into lockdown to reduce the spread of the coronavirus. After applying for a handful of job postings, he was invited to a Skype interview for a proofreading and editing job at the pharmaceutical company Sanofi.
Things were looking up. A few days later, he got an offer letter on what appeared to be an official Sanofi letterhead and an emailed check to buy supplies that his new employer said were for his home office.
O’Reilly deposited the check, and, once it seemed to have cleared, he used the funds to send money to accounts listed on an invoice sent to him by his new boss. He sent one payment, which he thought was for office supplies, through the money transfer app Zelle and a second via Venmo.
Minutes later, he received a notice that his bank account was overdrawn by nearly $3,000.
O’Reilly had fallen victim to an elaborate and updated version of a classic check scam that has found renewed life on freelancing platforms like Upwork, where victims said they have been defrauded of thousands of dollars while looking for work-from-home options during the pandemic following one of the steepest economic downturns in U.S. history.
Since the pandemic began, resulting in nationwide lockdowns, AARP’s fraud tip line has been receiving over 100 more calls a day than it did in the months before the country went into lockdown, said Kathy Stokes, AARP’s director of fraud prevention programs.
The Justice Department has gone after scammers of all stripes capitalizing on the coronavirus, catching scams purporting to sell protective equipment and scams designed to pilfer Americans’ IRS relief payments or install malware. As of May 21, the Federal Trade Commission said it had received more than 52,000 reports of coronavirus-related fraud costing people almost $40 million.
“We’re seeing people accepting offers to do basic accounting work, but what it ends up being is money muling,” Stokes said.
The scammers don’t start and stop on Upwork. Fraudsters looked on Freelancer.com for people who would be willing to hand over their Upwork accounts to be used to run scams for a cut of whatever is made. Once victims are in the throes of a scam, they’re implored to send money through peer-to-peer money transfer apps, like Venmo, Cash App and Zelle.
Venmo, Cash App and Zelle all said in emailed statements that they encourage customers to contact their customer service departments immediately if they believe they’ve been the victims of a scam.
Upwork said in a statement that users agree to its terms of service when signing up, which requires all communication and transactions to occur on the Upwork platform. When users take their conversations off Upwork, the company can no longer monitor for or address suspicious activity, the statement said.
Wait for the check to clear
When news of the coronavirus outbreak began to saturate headlines, a woman in Washington, D.C., applied for positions on Upwork in case she lost her job in the economic downturn. She asked to remain anonymous because she has still not recovered the over $2,000 she lost to a scam in April.
She quickly heard back from a man who claimed that he was an architect looking for administrative help for a company called Pen Construction. They talked on the phone, and he sent her a contract to get started. After a few days, her new boss instructed her to make a purchase through a vendor and sent her a check to make the payments, which she deposited in her account.
“The bank made the check available. It cleared, so I thought,” the woman said. The boss asked her to send payments to the vendor with Cash App.
Shortly afterward, she got a notification from her bank that the funds hadn’t actually cleared. She was out $2,300.
Her bank told her there was nothing it could do to get her money back after she sent the payments with Cash App, and Upwork said that because the conversation was taken off the platform, the issue was out of its hands. Cash App wouldn’t comment on its procedures for protecting victims of scams, but it said it is working to educate customers about scams.
Amalia Brockman, 25, lost $2,500 to a scam from Pen Construction on Upwork in March.
Since she started looking for freelance opportunities on Upwork in February, Brockman said, she’s seen what she estimates to be about 30 scam job postings.
One interview Brockman had that ended up being a scam came from a posting for a virtual assistant at a hospice company in Chicago. After learning that she had gotten the job, she was told by her boss that he would send her a check to cover setting up a home office. Skeptical, Brockman called a hospice company with the same name in Chicago, which told her that others had called about an Upwork scam, too. There was no job.
“I wrote him back saying, ‘You are a scam, Dear Sir,’ and then he blocked me,” she said.
All the victims of work-from-home job scams who spoke with NBC News first encountered scammers on Upwork. But scammers are skilled at persuading job seekers to move their conversations to phone calls, conduct interviews over Skype or transfer payments using peer-to-peer cash transfer apps instead of Upwork’s payment processing system.
“As soon as the scammer gets the victim or the target off the platform, it’s no longer the platform’s issue,” said Stokes of AARP. “The harsh reality is that with most scams, when the money’s gone, it’s gone.”
“One thing to realize is that these aren’t lone individuals hanging out in their mom’s basement. These scams are a criminal enterprise, and they’re international in scope,” Stokes said.
Many scammers on Upwork find other people’s accounts to use by soliciting them from other job sites, like Freelancer.com, in exchange for a cut of whatever is made from the scam.
“Nine out of 10 of the messages I receive on Freelancer.com are scam artists that will ask you to give up your Upwork profile,” said Heath Douglass, a voice artist and teacher based in Brazil, who has been looking for work online during the pandemic.
The scams often start with Douglass applying for a job posting, but when he gets a reply, it’s a scammer asking for credentials for his Upwork account.
When Douglass messaged Freelancer.com over Facebook to ask about the deluge of scam messages he’s received, the company said there was nothing it could do, recommended that he work only with verified accounts and refused to provide any additional information about what it does to mitigate scams, according to messages reviewed by NBC News.
“I broadly categorize this as spammer activity,” said Matt Barrie, the CEO of Freelancer.com. “I certainly can tell you that 90 percent of messages are not scammers on our platform.”
Two other people interviewed by NBC News also said they had been contacted on Freelancer.com by scammers proposing business opportunities in exchange for using their Upwork accounts.
Upwork and Freelancer.com both instruct users not to leave the platforms when connecting about job opportunities. Upwork offers its own video messaging service on the platform so job applicants can take calls all on Upwork’s website. Freelancer.com also has on-platform phone, messaging and video calls.
Upwork doesn’t mention scams or the requirement to stay on the platform on its main how-to page, but it does mention the requirement in the fourth video of a six-video series for new freelancers and in its lengthy terms-of-service contract. Freelancer.com also explains on its “Getting started” page that communications should be kept on the platform.
Still, anyone who has ever been hired as a freelancer or as a temporary worker from a posting on the internet knows there’s nothing strange about being asked to speak on the phone, over Skype or in email or text when corresponding about a job.
Upwork’s main help page doesn’t mention scams, either. The Trust and Safety page, which is separate from the help page, does have a link to report suspicious activities, but it’s not clear that reporting someone will result in any restitution. Upwork declined to provide information about the size of its Trust and Safety team.
Veena Dubal, a professor at the University of California Hastings College of the Law who studies gig work platforms, said the fact that Upwork represents itself as a safe place to find work could mean the company has some legal responsibility to its users to deal with scams and fraudulent activity more than it already is.
But more broadly, Dubal said, one of the problems with the rise of the freelance workforce in recent years is that companies that depend on contract labor, like Uber, Instacart and Upwork, treat workers as if being scammed or exploited is just the price of doing business.
“There should be more of a sense of owing something to these workers,” Dubal said. “But instead there’s a sense that the way to not have to deal with any kind of potential liability is just to not interfere at all.”
O’Reilly said that after a local news station picked up his story, Venmo emailed to offer to refund the money he sent on the platform, even though, when he previously spoke to the company, it said there was nothing it could do.
“It felt like a reprimand,” O’Reilly said of the refund. “It stressed this is a one-time thing.”