Work-At-Home Scams Don't Fall For These Age-Old Tricks

Why are we vulnerable to work-at-home scams?

There are, I suppose, as many answers to this question as there are people, but certainly in this down economy, more people than ever are feeling pinched, if not desperate, and looking for ways to bring in more income. When investigators actually reply to work-at-home ads that seem to promise easy money, they almost always conclude, as did the Consumer Reports journalist in the article cited below, that “He won’t be giving up his day job.” The U.S. Federal Trade Commission has gone after hundreds of work-at-home schemes in recent years, but as long as there are potential victims, there will be scams, so it pays to be on the alert.

Classic Scams

Get paid for stuffing envelopes. 

 You pay up front for a kit or a free trial membership. The payment gives you access to a website and a guide. You have to place classified ads to get people to send you $5 for reports such as “How to earn money at home.” Usually when you try to get back in touch with the company, you’re unable to do so.

Make money online with your own Internet business – turn your computer into a cash machine.

 You usually are asked to give your credit card to pay for the shipping of the CD that is going to tell you how to do this. One investigator had over $70 charged to his card for access to a Website unless he cancelled within seven days. The Website did not provide very helpful information on making money online.

Make easy money assembling crafts (or products) at home. No experience necessary! 

 You’ll be asked to buy a starter kit, but what you’ll be paid and the time it will take to assemble whatever it is will net an obscenely small amount of money per hour, if any at all. One company admitted that they made their money from selling the kits, not the assembled products.

Earn hundreds of dollars weekly processing medical insurance claims.

 This often involves buying expensive software and investing in business cards that you are told to hand out to medical offices that you are supposed to call on. Most medical offices already have insurance processing providers, so the sales job is difficult. The insurance claims industry is very specialized and requires trained people to do it properly. Also, many of these companies are truly scams and do not deliver what you have promised to your customer.

Chain letters.

Send $10 to each of the names on this list, then copy this letter, adding your own name to the bottom of the list, and send it to as many people as possible. Participating in this may well put yourself in violation of U.S. mail laws, not to mention that you will spend a lot of money on buying mailing lists, duplication and postage for little or no return.

Warning signs


Be suspicious of a scam if:

• You’re asked to pay for materials up front.
  
  
• Your income is dependent on your ability to sign up an ever-growing number of additional people (multi-level marketing). There are some very legitimate multi-level marketing businesses, but they require special personalities and skills to succeed, and virtually none can be done without leaving home and working hard.
  
  
• You have to find your own customers or your own outlet for selling a product.
  
  
• There is an ongoing membership or fee.

Do Your Due Diligence

A legitimate work-at-home program should tell you in writing what's involved , what you’re selling, and what’s expected of you. Be sure to ask the questions below and write down the answers. Document the person to whom you are speaking and the date you talked to them:

• What tasks will I have to perform? (Get step-by-step instructions).
  
  
• Will I be paid a salary or will my compensation be based on commission?
  
  
• Who will pay me?
  
  
• When will I get my first paycheck? (Do NOT give them your bank account number for direct deposit!)
  
  
• What is the total cost of the work-at-home program, including supplies, equipment and membership fees? What will I get for my money? Will I owe any more money in the future?

Consider checking out the company with your local consumer protection agency, state Attorney General and the Better Business Bureau, not only where the company is located, but also where you live. These organizations can tell you whether they have received complaints about the work-at-home program that interests you. But the FTC warns us to be wary: “the absence of complaints doesn't necessarily mean the company is legitimate. Unscrupulous companies may settle complaints, change their names or move to avoid detection.”

Are there really any legitimate work-at-home businesses?


Of course! And we here at IAHBE have written many articles about dozens and dozens of legitimate businesses that can be run from a home-based office, including some that involve being employed by another company but working from home. As an IAHBE member, you have access to all of the back articles in our archives. Be sure to explore this incredibly valuable resource.
For legitimate information on working from home (besides the IAHBE site, of course) visit the National Association for the Self-Employed, Entrepreneur.com, Start-up Nation, and the Small Business Administration.

What to do if You’re the Victim of a Scam

First of all, if you truly think you have been deceived, try to contact the company and get a refund. Don’t hesitate to say that you will report your experience to public officials. If you are unable to get satisfaction the next step is to file a complaint.

• The Federal Trade Commission’s task is to protect consumers from fraud and deception. If you wish to file a complaint, call 877-FTC-HELP (877-382-4357) or file online at http://www.ftc.gov.
  
  
• You may wish also to report your experience to your state’s Attorney General’s office. They can advise you whether or not there are any state laws that pertain to your situation.
  
  
• Check your state government office to see if there is a consumer protection department.
  
  
• Call your local Better Business Bureau (BBB) as well as the BBB in the town or city where the company that defrauded you is located.
  
  
• If your problem involved a chain letter scam or other postal-related problem, report it to your local postmaster.
  
  
• If you responded to an ad in a newspaper or online classified site, you may also wish to report it to the company that owns or sponsors that advertising medium. They will not wish to be associated with fraudulent advertisers.

If it quacks like a duck…

Always remember: there’s a lot of truth in that old cliché: “If it sounds too good to be true…it probably is.”