The advent of technology has brought several conveniences to our lives. Communication was never easy, but smartphones have made it as convenient as possible. Businesses are also benefiting from advanced technology. Globalization has rapidly increased and the world has become a global village. People often consider job hunting a challenge but modern technology has allowed individuals to choose to work from home. Also known as freelancing, the workers can now work from the comfort of their home and earn a handsome income. The number of freelancers is increasing and contributing to a new economy called ‘the gig economy.’
Freelancing sounds like an easy job, however, it is not easy at all and demands attention from workers as well as employers. Nevertheless, the comfort of working from home is always joyful. It brings ease, convenience, and flexibility to work whenever you want, and wherever you want. Unfortunately, freelancing is solely an online business and embraces numerous scams every year. Combating these scams is essential, otherwise, the gig economy will suffer significant losses.
Scams in the Freelancing Business
There are several scams that prevail in the freelance sector. Fraudsters are coming up with new ways to terrorize freelancers, and here are a few of the scams that every freelancer has fallen victim to at some point.
Pre Payments
Either the worker or employer suffers from this scam at least once in the freelancing career. The worker can ask the employer to deposit some money as proof of legitimacy. On the other hand, the employer can ask workers to transfer some funds to prove their identity. In either case, it’s a scam that never ends up well for any of the parties.
Offsite Payments
One of the most common digital scams scams is offsite payments. Freelancers agree on getting paid on a different platform without sensing the malicious plans of fraudsters. After finishing the task, workers end up with no money in their bank accounts.
Personal Information Request
Everyone recommends keeping personal information private when it comes to online security. Follow the advice religiously on freelancing platforms too. Providing personal information will result in identity fraud and financial crimes like account takeover and chargebacks.
Third-Party Money Transfers
This is a new kind of scam that results in money laundering. After successfully completing the job, freelancers are paid for the task and employers transfer some extra funds as well. These extra dollars are not a tip for working so hard. Instead, employers ask the worker to transfer these funds to some other account. Unknowingly, the freelancer becomes a money mule in the money laundering chain. Never transfer money on behalf of anyone you barely know.
How to Combat Scams in the Gig Economy
The freelance economy is growing every day and so are scams in this sector. There is a dire need for combating these crimes. Otherwise, workers and recruiters will face tremendous losses in terms of finance and trust.
One of the most effective ways of combating scams like prepayments, fake job posts, identity theft, and financial crimes, is that freelancing platforms should know your customer verification. The robust verification solution verifies freelancers before onboarding and reduces the risk of fraud from the website. Websites can check the documents of customers for forgery or any other issue. Furthermore, it enhances the credibility of the platform which attracts more workers. The bulk of workers switched to freelance websites during the COVID-19 outbreak, and protecting them from fraud is critical. Know your customer services ensures security at all costs.
Conclusion
The freelancing economy is growing rapidly with every passing day. However, fraudsters are also increasing and coming up with more sophisticated methods of fulfilling their malicious intent. Prepayments, offsite payments, requests for personal information, fake job posts, and money laundering have significantly increased over the years. Adding a kyc solution will assist all platforms to boost credibility and secure all the freelancer workers and recruiters.