A vivisection of scam companies

In this golden era of digital misinformation, telling apart a legit organisation from a fraudulent one is difficult, especially when an employee becomes unfortunate enough to be lured into working for a gang of scammers with promises of “revolutionising the industry.”

A peek at media reports show that there has been no shortage of companies defrauding their customers in recent years, and most of them are scamming their staff as well – engaging in various irregularities, and subverting employee rights protected by the law.

The likes of Evaly, People’s Leasing and Fareast Islami Life Insurance are now infamous for their shady corporate culture.

The situation becomes especially muddy when such companies “invest” in morally bankrupt media outlets. Under the guise of “objective news,” these outlets then spread propaganda to divert public attention and disperse fabricated information to protect the scammers.

There are pointers for consumers on how to avoid getting scammed from shady companies and misleading news outlets, but as an employee, how do you identify and distance yourself from being part of such scams?

Though financial irregularities are notoriously difficult for any regular employee to pin down, luckily, a thorough analysis of several fraudulent companies, and the collective experience shared by their staff reveal a number of red flags an employee can watch out for.

Toxic work environment

The most common red flag for identifying a scam company is the presence of extreme hostility and toxicity at the workplace – almost always perpetrated by a select group of cronies backed by upper management.

Blatant nepotism is a telltale sign displayed by all such establishments. These toxic people are usually the close friends, brothers, girlfriends, former colleagues, and cronies of the top officials. Complaining against their misconduct usually makes your job even more difficult.

Aside from shelter by the top management, these toxic staff also gets the highest salaries, large increments that are grossly disproportionate to their contribution at the workplace, expensive gifts from company fund, and a free pass to threaten, bully and harass others as they see fit.

Such issues can easily be identified by a professional even before joining such a workplace, as these companies tend to have an alarmingly high number of resignations and firings within very short periods of time. A company’s failure to retain employees is always an alarming sign.

For an employee, it is a good practice is to track down current and former staff of an organisation they plan to join, and then ask for reviews before making the leap. Researching the professionalism, market reputation, and experience of your future employers is essential.

How do scammers build brand value?

Scam companies will hire a lot of professionals and industry veterans in the initial stage to give off a false sense of legitimacy. As soon as the firm develops a sizable brand value through misleading marketing and aggressive social media tactics, it will start cutting staff and budget.

Some of these companies go even as far as declaring themselves “Number One” in their sector without any tangible data. They use social media to suppress negative exposure, spend money to boost post visibility, and lie about the number of likes and comments on their main websites.

Many employees – especially senior staff not in on the scam – begin leaving voluntarily after they get wind of a company’s irregularities. However, this is exactly what the scam organisations want, as industry veterans do not work cheap.

When brand perception is no longer important, scammers distribute money recouped from ex-employees’ salaries among their top management and cronies under the guise of promotions and unnaturally high increments.

Firing competent staff and harassing existing ones inevitably result in a manpower shortage when remaining employees begins to resign en masse.

Scammers – unconcerned with market reputation – will start hiring incompetent and inexperienced staff because they work cheap, and continue operations on the backs of their existing competent workforce.

This results in a noticeable fall in quality, productivity, perpetual shortage of manpower, gradual increase in workloads, mandatory overtimes, unreasonable deadlines and sales targets, faced by anyone who is not a management goon.

The management also acts extremely hostile and aggressive for any qualitative shortcomings caused by the manpower crisis and lack of competent staff, because a scam company needs to maintain its remaining brand value as long as possible to continue swindling consumers.

Needless to say, management cronies are never held accountable for any mishaps.

High employee turnover, baiting interns

Another telltale sign that a company might be scamming their employees is the unusually high employee turnover within short periods of time. These firms have a staggering rate of staff hirings and firings almost every month.

Many employees leave due to a combination of workplace toxicity, salary disparity, and harassment from the management, but many more are fired to make room for interns and fresh graduates.

Scam companies – using their brand value as a baiting tool – hire students, fresh graduates or other low-pay alternatives as interns or junior workers to keep their operations running.

These scammers bait the inexperienced, and sometimes even some experienced staff, with salaries far below the market average, but promise a high pay if they are employed after the “probationary period.”

Once this period is over, regardless of performance, the interns are fired unceremoniously. This is a common technique used by scammers, as hiring and firing inexperienced staff every three to six months is far cheaper than making them permanent employees.

Scam organisations also declare fake salary structure when hiring employees, but refuse to let their staff cash in their annual leaves, or provide them with other benefits during and after their employment period – such as paying due salaries and bonuses.

Many legit companies also suffer from similar issues, but they usually make a serious effort to make their businesses sustainable and profitable in the long run.

Scam organisations however seek only to make the upper management and their cronies wealthy by defrauding investors and consumers. Such organisations can irreparably tarnish the reputation of any professional – even when they have no involvement with the scammers.

Such companies and their scammer overlords should be avoided at all costs as soon as you can identify them.

The writer is a journalist working at The Business Post. He can be contacted at sairasrahman@gmail.com