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The gig economy is hotter than ever and riddled with scams. ZignSec’s KYC verification solutions are here to save the day.
The rise of the gig economy (and related scams)
The gig economy has virtually exploded in popularity this past year, with millions of people pursuing it as their main source of income and even more professionals turning to it for a secondary source of income. Technological advancements have made remote work more common. This has led to a steady uptick in freelance jobs and a significant expansion of the gig economy. But, with more people than ever shifting from traditional office jobs and schedules to virtual solutions and working remotely, we have also seen an unfortunate increase in gig economy related scams.
With roughly half of the global population somehow involved in contractual jobs the opportunity for fraudsters to fulfil their malicious intent is greater than ever. Whether it’s identity theft or money laundering, the gig economy today faces staggering losses due to scams in the freelance sector. Let’s take a quick look at some of the more common scams.
A freelance employer offering payment outside the platform is usually a big red flag and means that you’re likely dealing with a fraudster. Doing this is forbidden by most major freelance platforms, as it makes it difficult for these companies to protect the transaction and the scope of work. If you agree to an offsite payment, don’t be surprised if you never get paid upon completion of the task, or never hear from the original employer ever again.
This is a commonly used scam for the actual employer, and it’s a pretty straightforward one that relies on the frequent professional use of retainers or initial down payments for a future service or task. In short, this scam involves fraudsters pretending to be freelance workers and asking for partial or even full payment in advance as proof of the employer’s legitimacy. Once paid, they never complete the job, and swiftly move on to new potential targets.
Accidental or incorrect payments
With many people now aware of and alert to common digital scams like money laundering and other freelancing frauds, cybercriminals have moved on to slightly more sophisticated swindles. At first glance in many cases everything about the transaction looks legit. There’s a job post, a task that is being completed, and a freelancer that is paid as promised. So, where’s the scam? The fraudster pays the gig worker with a stolen credit card and then asks the freelancer for a full or partial refund depending on the amount paid. The fraudster usually states that they’ve overpaid or gotten the invoice wrong. The money and payment are real however from a stolen source. Naturally, the freelancing victim will return the money as asked, by which point the scammer has switched out the stolen credit card credentials with their own card details. The fraudster receives the stolen money and the victim is liable to pay once the owner of the stolen card files reimbursement claims.
One solution: KYC
At a time when we’ve seen an uptick in gig economy workers and related scams the need for safe and secure ways of verifying employers, employees, customers, and important documents is perhaps more important than ever.
Thankfully, freelancing platforms can fairly easily employ a robust Know Your Customer (KYC) process to avoid these issues. Such a process enables websites and/or companies to safely onboard legitimate clients, while assessing risks of illegal intentions for the business relationship. The right KYC process makes it easier for your company to filter and eliminate fraudsters before they ever become a real problem or threat.
We have aggregated a plethora of industry leading and highly rated Know Your Customer (KYC) solutions at ZignSec, including multiple providers of e-ID and Online ID Verification. Our platform supports and can read more than 8,000 different document types, is 100% automated, and can be securely used in more than 170+ countries across the globe.
With easy implementation, real-time results, unparalleled safety measurements, global coverage, and world leading user experiences, we can not only prevent, but eliminate the increasing fraudulent activity in the gig economy.
Let us show you what we can do
Contact us today at firstname.lastname@example.org or book a demo to learn more about how you can protect yourself, your business, and your customers with our robust KYC solutions.
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