7 Work-at-Home Schemes You Shouldn’t Fall For
How to identify a scam before you make a mistake and take the bait
You open your email one morning and there it is — a seemingly perfect job ad. “Be part of one of America’s fastest growing industries. Earn thousands of dollars a month from home!” The best part, aside from no commute and a great salary, is that the job will require very little work.
It sounds too good to be true. And it likely is. Taking the job could actually cause you to lose money — or worse. Some work-at-home offers are illegal and could land you in trouble if you participate.
Here are some of the most common work-at-home schemes, according to the Federal Trade Commission (FTC) and the Federal Bureau of Investigation (FBI):
1. Start your own Internet business. The company offering this deal claims no experience is necessary because they will coach you on how to run the business. You are required to pay up front for the opportunity to get in on the deal (money you will never see again). Once you make the initial payment, the company upsells you into more expensive services as a way to "guarantee" your success.
2. Be an envelope stuffer. This classic scheme asks for a small fee so that you can make money each week stuffing envelopes. After you send the money (kiss it goodbye first), you’re likely to receive a letter encouraging you to petition your friends and family with the same opportunity. In the end, you receive money only if the people you invite respond to your invitations the same way you did. The promoters rarely pay anyone, the FTC says.
3. Assemble products or make crafts. This offer says you can assemble or create items from home if you invest money in equipment and supplies. After you’ve spent hours making the product, the company says your work is not up to standards and refuses to pay.
4. Processing rebates. These ads require a small fee for training, certification or registration so you can earn a living processing rebate checks. You are guaranteed to learn from trained consultants that have successfully worked the program. All you end up getting is poorly written training materials and no rebates to process.
5. Medical billing. These schemes encourage you to help doctors process claims electronically. In exchange for a fee you’ll receive the software necessary to launch your own medical billing business. In reality, the company rarely provides legitimate contacts in the medical community, and you end up generating very little income.
6. Become a mystery shopper. The biggest scam in the mystery shopper industry centers on fake checks. You’ll be asked to deposit a check into your bank account, keep a small amount for your “work” and then wire some of your money back to the “employer.” The problem is that the original check was phony. Once your bank finds out, you’ll be on the hook for the counterfeit check.
7. Multi-level marketing pyramid schemes. Some multilevel marketing plans are legitimate. You earn money by direct sales of a product, the FTC says. But those ads that suggest you’ll earn money by recruiting friends and family to be distributors of a product are pyramid schemes. The scheme grows exponentially as more and more people are recruited and send money to the company for the promotional materials and inventory. However, in the end no one makes a real profit except the criminals, the FBI says.
How to spot a work-at-home scheme
People in challenging financial situations are prime targets for work-at-home schemes. Senior citizens are also susceptible because they grew up in a different era, were raised to be polite and trusting and are less likely to report fraud or suspicious activity, according to the FBI. Even college students are now being targeted, the FBI says.
If one of these emails finds its way into your inbox, here are some clues the "great opportunity" may be a scheme:
- Lots of money promised for simple tasks
- The job offer comes from a complete stranger
- The company requests up-front payments
- They ask you to wire money
- There is high pressure to “Act now!”
- It’s promoted as a limited time offer
If you choose to follow up on the solicitation, do your homework. The FTC has safeguards in place to help you determine if a work-at-home opportunity is risky. Asking questions like, “What tasks will I perform?”, “When will I get my first paycheck?” and “What is the total cost of the program?” may help you sniff out a scam. Most important, take it slow and don’t be pressured into something you might regret later.