college finances

Internship Scams: Protecting Yourself from Thieves

As you get further into your college career, you may find yourself looking for more practical experience outside of the classroom setting. One of the best ways to obtain this experience is through an internship. Working as an intern in a professional environment is a wonderful way to learn while earning experience future employers will appreciate.

However, there is a dark side to internships. There are people who will take advantage of college students eagerly looking for experience. If you’re on the hunt for an internship then you need to know about this common internship scam. I’ve also added some helpful tips at the end about how to spot and avoid internship scams.

Internship Scam

The Internship Scam

The  internship scam presented here follows a very common pattern. Here’s how it works:

  1. A scammer will create a posting on a communal job board. The posting is usually part-time, paid, and features the name of a reputable company.
  2. When you apply, you will receive a quick response asking for an interview. The scammer then schedules the interview to take place via a video message program (even if the company has an office near where you live).
  3. Typically, on the day of the interview your contact will say something unexpected came up and ask to complete the interview via chat software. However, some scammers conduct face-to-face video interviews.
  4. After the interview (usually short), you will receive a job offer and instructions to start training immediately. Training will involve purchasing specialized computer programs (ex. accounting software). They will offer to send you money to purchase the necessary software.
  5. They will send you check via email with instructions to print and deposit it in your bank account using your bank’s mobile application. This prevents the check from ever being in the hands of a teller who would recognize the check as fraudulent. Also, the delay time caused by mobile uploads will allow you access to the money before many banks withdraw it out of the check issuer’s account.
  6. After the mobile upload, they will ask you to go to your bank to withdraw the money in cash and deposit it into a provided bank account (typically at a different bank than yours). They will probably stress several times to complete the transaction in cash. Their reasoning is the other bank account belongs to their computer software vendor and the money is to pay for the specialized programs.

The Result

At this point, I’m sure you can guess what happens next. Your bank will try to collect money for the check you deposited and will discover the check is a fraud. The money is then removed from your account for insufficient funds. Because the money you withdrew to pay the other account was in cash, there is no way for you to rescind the payment. The representative who interviewed you will no longer answer your messages or e-mails. It all becomes clear; there was no internship and the money you paid was lost for good. I know of scams that ask for up to $2,000 under the pretense of purchasing training supplies. There are several different variations of this same scam, though this format is the most common.

Internship Scam

Tips for Spotting and Avoiding Scams

Getting caught in an internship scam is scary, but you can avoid it. Here a few good rules to follow in order to help you avoid internship scams.

  • Check the Company Website – Most scammers use the name of a big company on a job board to entice people to “apply” for the internship. Most large companies have a job board on their own website. Check the company website to see if the internship is listed. If so, apply directly on that website rather than through the job board.
  • Check the E-Mail Address – Large companies will have a dedicated e-mail address. If the person you are in contact with is using a general address it may be a scam. Example:
    • Good – johndoe@largecompany.com
    • Bad – johndoelargecompany@gmail.com
  • Never Pay Money – You should never have to pay money upfront for any internship or job.
  • Never Give Out Personal Information Online – Your never give out your social security number, bank account, or other sensitive information online. You should only give these numbers to an employer in person while you are at the place of employment.
  • To Good to Be True – If it sounds to good to be true, it probably is. A part-time, work-from-home internship that pays $35 per hour should signal a red flag.
  • Get Out – If at any point during the interview process you become concerned about being scammed, get out. Politely tell the interviewer that you feel this internship is not for you. You don’t need to be rude. Simply say you don’t feel like it is a good fit and end the conversation. Protecting yourself is your number one priority.

Have any other tips for avoiding internship scam? Leave them in the comment section below!

Putting Together a Freshman Year Plan

College life brings with it a limited budget and almost limitless free time.

There are plenty of hours to fill, but not a lot of spending money in your pockets. However, there are many resources at your fingertips which can make the experience affordable and enjoyable, allowing you to graduate with good spending habits and without debt.

Here are three tips to help you transition to college living while using your time, money and talents wisely.

freshman year gameplan

1. Start Building Your Resume

Once graduation is over, it’s time to get working. Right after high school you have a whole summer to begin saving for the future. Jump right in and get some real life experience to put on your resume and learn what it’s like to have an income.

Once you start school, either reduce your hours to part-time or find another job that better suit your class schedule. For some students classwork can make employment tough, but this does not mean it’s time to quit working. Just working two shifts over the weekend will give you money to use for saving and spending.

There are a variety of jobs out there for you to try. Whether or not you want something social, like working on campus or something to start networking, or doing entry level work in your field, get started early. Even food service or retail jobs can be the stepping stones to learning leadership skills you will use in the future.

2. Evaluate Income and Spending

Putting together a budget requires accurately estimating how much income you have and what regular expenses you will owe. Determine the funds you have to work with by adding together the money you were given for graduation, any regular spending money your parents will provide and financial aid money that will go toward expenses and paychecks from working.

Even if your parents can’t afford much or checks from graduation are small, the money can be leveraged so that you have a cash safety net during college.

Use Microsoft Excel or another online budgeting application to create a budget that tracks the cost of books, cell phone bill and other personal items. Discuss with your parents early on the costs they will assume for you. Making a plan before it’s time to pay can prevent you from spending more than you can repay or taking out more than you need in student loans.

Open a student checking and saving account to receive discounted rates and track your spending to make sure you follow your budget. Start with at least $100 to open the savings account and then deposit some of your earnings every two weeks until you have $1,000. You can use the savings for major expenses such as flying home for winter break or making an emergency visit to the hospital after breaking in your leg in intramural soccer.

3. Manage Time Intentionally

Believe it or not, studying is a major way to save money, not to mention improve your grades and prepare you for a career. Putting a sizable portion of your time into study groups or planting yourself at the library utilizes this time to its greatest potential. Take the initiative to be a disciplined student and devote hours to your class work.

You may feel tempted to use these hours for fun events like shopping, going out to eat or paying for other entertainment. Limit your nights out to once or twice a week so that you are in control of your grades, but still able kick back and relax here and there.

Take advantage of the on-campus events sponsored by your school. After all, part of your tuition is going toward these activities, which are often free to you and accompanied with free food. This will help with immersing you in the community as well as saving you from spending money on other forms of entertainment.

College is a time to embrace many new things, but debt doesn’t have to be one of them. Make the most of your freshman year by working hard, sticking to your budget and hitting the books.

Alanna Ritchie is a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College.