Work From Home Scams and What to Know

Michael Bennett
October 28, 2015 - 30 Views

A lot of people would love to be their own boss. They are attracted by ideas of earning thousands without leaving their house. Because this is a known fact, there are many different work from home opportunities posted all over the internet. Generally, they all say the same thing: earn a huge income in your spare time at home. The reality, however, is that many of these supposed opportunities are simple scams, or don’t deliver. Take your time to look into them and be aware of some red flags to avoid falling victim to them.

Things to Know About Work from Home Opportunities

Many people continue to struggle for money and this makes any work from home opportunity sound good. Some even offer a money back guarantee, which makes it sound even more of a good idea. The problem is that you are more likely to be scammed. You may be asked to pay for certifications or kits that aren’t worth the paper they are printed on. You may find unexplained charges on your credit card, or end up in a fake check scam.

Some are not as dangerous as those mentioned, but simply do not deliver on their promises. For instance, you may have to work long hours before you get paid anything at all. Others will expect you to pay to have access to necessary information. You will probably be told that you will be getting back the money you have spent very quickly, but oftentimes you never will. People have literally lost thousands, as well as a lot of time and energy, through these scams.

Common Work from Home Scams

The most common work from home scams are:

Internet Businesses

Here, you will be told that you can earn a huge income by starting an internet business. They say you will be fully coached, so you don’t need prior experience. Pressure will be put on you to pay for vital information straight away. If you do, further services will be offered to you that cost even more money and that are described as ‘essential’. With these scams, you are likely to be thousands out of pocket and not a single penny richer.

Others will tell you that you can earn money by doing things like filling out forms or doing online searches. They will usually tell you that you need to pay a small fee for shipping and handling. But once you do, you will quickly find that the company isn’t linked to search engines or other businesses. Rather, you have just handed over your credit card details and allowed them access to your personal details.

Envelope Stuffing

Everybody seems to know somebody who genuinely made money stuffing envelopes, but it seems that none of this is actually true. The idea is that you pay a fee to be registered and the only thing you will receive is a copy of a letter telling you how to get other people to buy the opportunity and pay you. You can earn something here, from the people that fell for the same spiel as you did.

Craft or Assembly Work

Lots of people love to craft things so they are attracted by crafting business opportunities. You will usually be asked to pay several hundreds for supplies and equipment. These include things like sign makers, baby shoes, aprons, and so on. After hours of making your crafts and sending them to the company, you will hear that your work was ‘not up to standard’ and you won’t get paid, leaving you in debt for the equipment.

Rebate Processing

This is also a very popular scam. You will be told that you have to pay a small fee in order to be registered, certified and trained, but you will earn back the fee almost instantly. You will usually have contact with a ‘consultant’, who will tell you how to be successful. You will actually receive training materials most likely translated from Chinese using Google Translate and you won’t actually find any rebates to process.

Launching a Medical Billing Company

This is another very popular scam that offers full- or part-time work. No experience is needed to electronically process medical claims. All you have to do is phone a toll free number, where you will be told that many doctors are screaming for people to help them. You will need to invest several hundred (or thousand) dollars in order to launch you own business, which is for various things, such as software, clients and technical support.

In reality, you will simply be provided with a list of doctors straight from the Yellow Pages. In all likelihood, none of them will require your help. The software you receive is unlikely to work. As a result, very few people manage to ever earn back the money they have spent.

Mystery Shopping

Mystery shopping sounds too good to be true and it generally is. Basically, you will be told that you could be sent to restaurants and shops, and that you will be refunded any money you spend, as well as get paid for your efforts. The problem with this scam is that there are legitimate opportunities out there as well. Scams will usually want you to pay for things like certifications, job guarantees or directories. There is also a chance that you could fall victim to a fake check scam. This means that you do your mystery shop and you are paid using a check that would turn out to be fake.

Multilevel Marketing

Finally, there is multilevel marketing or MLM. Here, you are told to sell things to the public in whatever way you see fit, as well as recruit other sellers. You will earn commissions on your own sales, as well as from those of your downlines. While there are some genuine MLM opportunities out there, the reality is that most of the thime you will never be far up enough on the ladder to earn a significant commission.

Many MLM plans are completely fake. You may be shown images of luxury lifestyles, parties and more. Before you fall for these, you need to ask for figures in which you can clearly see accurate average earnings after deduction of expenses. And also bear in mind that those programs that say the way to earn a lot of money is by recruiting more sales people are actually pyramid schemes. These are illegal.

How Can You Tell a Scam from the Real Deal?

There are a few specific red flags to look out for. If you have to pay any kind of up front fee, or if you are told that you can earn big money doing very little, you should start to be suspicious. This is true even if the ad is in placed in a very trusted source, or if people on the phone sound legitimate. Scammers have very few scruples.

If you have seen a work from home offer and you are interested, you have to do some research first. Do make sure to follow the guidelines laid out in the FTC’s Business Opportunity Rule, which will give you the necessary information to safeguard yourself from scams. All genuine sellers have to be able to provide you with a one page disclosure document that should tell you all you need to know. Fact check this information and ask the seller:

  • • What will you have to do exactly in order to earn money?
  • • Will you be paid a commission or a salary?
  • • How are likely earnings calculated?
  • • How will you be paid?
  • • When will you receive your first payment?
  • • How much does it cost to join the program?

These are important questions that could help you identify whether the opportunity is actually a scam.

Investigate the Company

Do try to find out what types of experiences others have had with the company. Google is an excellent source for this and all you need to do is enter the name of the promoter or company, as well as ‘reviews’, ‘complaints’, or ‘scam’. This will tell you what others have experienced. Do not, however, take this information as gospel truth, because many reviews are fake.

Speak to your consumer protection agency, the Better Business Bureau and your state Attorney General as well. Do this for where you live and for where the company is located. This will tell you whether complaints have been lodged against the opportunity or the company. But keep in mind that a company without complaints is not necessarily a genuine company. After all, they could have settled on the complaint and then simply changed their name.

How to Report a Scam

If you believe that you have spent money on a fraudulent work from home opportunity, the first thing you need to do is ask the company for a refund. Do also tell them that you intend to speak to the relevant law enforcement professionals about what has happened. You can also:

Additional Resources:

Michael Bennett

About Michael Bennett

Michael Bennett is Editor-in-Chief of Consumer Protect.com. Since 1999, he's worked across a multitude of areas of consumer protection including defective products, environmental issues, identity theft, predatory lending and more. If you find his articles helpful please share them with your readers.