They were duped into handing over cash by a fake chauffeur company, which was advertising for drivers through the Jobcentre Plus website.
One of the victims who was stung was 24-year-old Neil Moss from Liverpool believed he would be earning around £15 per hour.
He handed over £100 "key deposit" after being interviewed by Nationwide Chauffeur Services.
After borrowing the money from his parents he was told he would be contacted about starting work.
Mr Moss said: “When I hadn’t heard anything it just sort of clicked.
"I was really angry at first then I just felt devistated it really was too good to be true".
Karl Hammond, 40, from Nottingham was also taken in by the scam but did not hand over any cash.
He was outraged: "It’s shocking there is no vetting procedure for employers to go though".
Mr Hammond said: "I can’t believe someone would stoop so low and prey on people down on their luck".
The Department of Work and Pensions oversees Jobcentre Plus.
A DWP spokesperson said: "This activity is not tolerated. We do everything we can to root out bogus offers of employment; if we become aware that someone is abusing the system, we withdraw the vacancy and investigate fully".
He continued: "Our advice to an applicant has always been that they should never pay fees up front to a potential employer".
Officers from South Yorkshire Police who are investigating allegations of fraud have arrested a 43-year-old man from Sheffield. He has since been released on police bail pending further enquiries.
UPDATE (08/07/10):
South Yorkshire Police have charged a man following allegations of fraud.
43-year-old Mark Shortland, from Sheffield has been charged with offences under the Proceeds of Crime Act and appeared at Sheffield Magistrates Court yesterday (Wednesday 7th July 2010). He has since been remanded in custody and will appear at Sheffield Magistrates Court on Monday 12th July 2010.
43-year-old Mark Shortland, from Sheffield has been charged with offences under the Proceeds of Crime Act and appeared at Sheffield Magistrates Court yesterday (Wednesday 7th July 2010). He has since been remanded in custody and will appear at Sheffield Magistrates Court on Monday 12th July 2010.
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