Unscrupulous fraudsters are using the government's Universal Jobmatch website to rip off the unemployed, it has been claimed.
In yet another blow to Iain Duncan Smith's work and pensions department, it has confirmed that as many as 179 employers, advertising over 350,000 jobs, might be fraudulently using the site.
Labour's Frank Field, who is demanding an inquiry into the system, said one scam is for jobseekers to be asked to pay a £65 fee upfront for Criminal Records Bureau checks only to later discover that no job or company exists.
He said the department had written to him admitting that 179 employer accounts advertising 352,569 jobs might potentially be in breach of the website's terms and conditions.
The site demands that ads should be for an "actual job or work opportunity" , properly described and paying at least the minimum wage. There must be no duplicates and no premium-rate phone numbers should be used.
Field said: "Anyone can place an advertisement on the site in the space of five minutes by ticking a few boxes. Ministers need to get a grip before more people fall victim to fraudsters preying on them with the helping hand of a major government department."
He said he had even been told of cases of sham firms advertising fake jobs and holding what turned out to be bogus job interviews under false identities in Jobcentres.
"Jobseekers who applied for jobs with the sham company were required, as part of the application process, to provide bank details and an upfront payment of £65 for criminal background checks."
They only found out when they turned up for work that there was no such employer.
Field has demanded an urgent investigation from the National Audit Office.
The innovative website was set up in 2012 and is seen by the department as an effective way of helping people into work.
A spokesman said: "The truth is that the vast majority of employers post genuine jobs, and we crack down on those who don't play by the rules. We also regularly monitor the site and remove jobs that don't meet our rules".