Check for Breaches

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By Christine Giordano /
September 7, 2016
stencil finger print casting shadow
Photograph by Jeff Harris for Money

Working as a freelancer, gig worker or 1099 employee over the internet can sometimes be tricky. You want the work, but never want to fall for a scam or work for a company that won’t pay you.

When I started working as a freelance writer, I crafted what I hoped would be the ultimate writer’s profile on LinkedIn (we all can dream, right?) and began interacting with potential clients online, through groups and over email. Most were strangers I had never met. But as I posted more and more of my work samples online, clients began emailing me, asking if I could work for them.

The problem was, many would send me tax forms that I’d have to fill out before I started the work.

Again, I didn’t know these people. I didn’t know if they legitimately worked for who they said they worked for. Some of their company names weren’t familiar. So I worried about sending tax forms with my Social Security number to perfect online strangers. I didn’t want to set myself up for possible identity theft.

“It’s so easy for identity thieves to create a false profile online,” Dominick Miserandino, CEO of the marketing and website consulting business Dysleximedia, said.

Once they get your Social Security number, thieves can apply for loans, apply for credit cards, get medical treatment, order utilities, get your tax refunds, steal your benefits and even commit crimes using your identity — which could entangle you in their criminal history.

During the period from February 2011 to December 2015, the IRS identified almost 1.1 million taxpayers who were victims of employment-related identity theft, according to an August report from the Treasury Inspector General for Tax Administration. The problem is, unless you’re monitoring your credit report or looking for signs that your identity has been stolen, you might never know someone is using your number.

“An individual should be careful about sharing his or her number, even when asked for it,” Darren Lutz, a spokesperson for the Social Security Administration, said. “People should ask why their number is needed, how it will be used, and what will happen if they refuse to provide the number. The answers to these questions can help people decide if they want to give out their Social Security number.”

Read: 4 Ways Identity Theft Can Affect Your Credit

Your Sleuth Toolkit

You want to be careful, but you need the work, right? And you don’t want to aggravate what could be a very legitimate, well-paying company by treating them suspiciously. So you need a toolbox to do your own sleuthing.

Ask For Their Business Information: This is a reasonable ask if it’s not already on the email they sent you or on their LinkedIn profile. You’ll need to know their name, company name, email address, physical address and phone number to verify they’re legitimate.

Consider Using an EIN Number: I’ve since learned that many freelancers sidestep giving their Social Security number by establishing an “employee identification number,” which can be obtained within minutes through the IRS website. Once generated, it is a permanent number that links your business with your Social Security number. It might not leave you as vulnerable as if you gave your Social Security number to a scammer.

“Security-wise, using an EIN would be safer because it’s not linking to you as a person. In theory, if your identity was stolen, your company would take the hit, not you,” Miserando said. But keep in mind that scammers can still use your EIN to get lines of credit and apply for loans.

Read: 12.6 Million Reasons Why Identity Theft Matters

Nix the Tax Form for Small Gigs: Some companies require 1099s, but if it’s a job that pays less than $600 total, it’s not needed. “You could tell a client to forgo it until your accumulated pay is more than $600,” Miserando said. “It’s unnecessary paperwork for them. There’s no benefit.”

Do the D&B: “If it is over $600 and you’re dealing with a sizable contract, do your research,” Miserando said. You can head to Dun & Bradstreet’s website, which should tell you if the business exists. (For deeper research, a subscription to the program is available and free at some public libraries.) “But it’s not the be-all, end-all search,” Miserando said.

Search Through the State: If it’s a business in the U.S., find out where it is incorporated, then do a Department of State, Division of Corporations search to find out if the business truly exists. “You can look up any company, wherever it’s incorporated,” Miserando said. (To find the right website, Google the state name with the term “Division of Corporations.” Once you’re on the website, enter the name of the business into the search feature.)

Do They Pay Their Bills?: You’ll want to spend a few more minutes on Google to see if the client is known to actually pay its freelancers, Miserando said, so Google your company and the phrase “non payment.” You can also ask about them on freelance websites used by people in your profession, such as LinkedIn or Facebook groups. Be sure to copy and paste the email you received directly into Google to see if a scam alert has been issued about it. Googling the business name combined with “and scam” can also turn up interesting information.

WHOIS Search: This can give you information about a company’s domain and online presence.

Company Reputation: If you want to learn if the company approaching you has a good or bad reputation, you can check with the Better Business Bureau to see any registered complaints. Yelp! is another resource, but keep in mind that people are able to Yelp! about places and services they’ve actually never experienced.

If the Company is International: Reach out to the American embassy or consulate general in that country for information, explain your situation and ask for data — such as the age of the company, number of employees, revenues and reputation. Banks might also be able to tell you if there has been a series of transactions over time, which a more established company should have. Also see if there is a travel alert to the country you’re about to do business with, especially if you intend to travel there.

Read: How Your Favorite Song Lyrics Can Protect Your Identity

If You Do Get a Scam Email: If it’s over LinkedIn, the site wants to know about it. “When this type of activity is detected, we work to quickly remove it and prevent future reoccurrences,” May Chow, a spokesperson for LinkedIn, said. “We encourage our members to report any messages or postings they believe are scams and utilize our member help center as a resource to educate and protect themselves from frauds online.”

Signs Your Digits Have Been Tapped

If you want to check to see if people are working under your number and you’re over the age of 18, you can also review earnings posted to your record on your Social Security statement, through the Social Security website, Lutz said.

So, let’s say you accidentally give your numbers to the wrong person. Watch out for these signs oftaxpayer identity theft, per the IRS’ website:

You’ve attempted to file a tax return and it’s rejected.

You receive one or more notices stating:

  • More than one tax return was filed using your Social Security number.
  • You have a balance due, refund offset or a collection action taken for a year in which you did not file a tax return.
  • IRS records indicate you received wages from an unknown employer.
  • You receive an IRS letter about an amended tax return, fictitious employees or about a defunct, closed or dormant business.

If you’re working over the internet, it’s a good idea to keep a sharp eye on your credit, because even if your employer is legit, the email that used to send the tax forms can be hacked. (If that happens, you can see more on what to do here.) When you work hard stringing together freelance jobs in the gig economy, the last thing you need is for someone to mess with your credit or claim your tax return.