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Legitimate Scams Work-At-Home JobsFor months BLACK ENTERPRISE (Business magazine focused on African-American business and consumer issues is published by Earl G. Graves Publishing.) researched these schemes and how swindlers targeted victims and then pocketed their hard-earned cash. Knowing how these scams work can help you avoid getting ensnared in a con artist's trap. Federal Trade Commission's Mora places scams into two categories:Work-At-Home ScamsHow often have you seen ads promising thousands of dollars for working at home in your spare time? If you've answered one, you may have been a mark in a work-at-home scheme. These con jobs tend to require less in the way of up-front cash and, as the name indicates, lure people intrigued by the idea of working from home.Business Opportunity SchemesGenerally, these are frauds where investors can lose more than $500. "People might buy overpriced equipment or software packages to go into business," says Mora. "Investors are given false and misleading ideas as to how much money they can earn. Often, phony references are given to show that others have been successful. After they put their money into the deal, investors find out that there's no real demand for that product or service."So what types of scams are derivative of work-at-home and business opportunity cons? They fall into the following subcategories: 
Vending MachinesBogus companies lure victims into paying thousands for vending machines--often at marked-up prices--then offer to help place them in retail establishments. Usually, the purchasers have to place the machines themselves or eat the cost.Assembly Work-At-HomeThese schemes require you to invest hundreds of dollars in instructions and materials. Then you'll spend many hours of your time producing items such as baby booties or toy clowns' for a company that has promised to buy them. Once you've purchased the supplies and completed assembling the product, the company often decides not to pay you because your work does not meet certain "standards." Often, victims are stuck with merchandise that's impossible to sell.Work Home Mailing Envelopes Scams : Envelope StuffingThere are several variations on this type of scheme, most of which require you to spend money on advertising and materials. Actual envelope stuffing, though, is hard to come by. According to officials at the U.S. Postal Inspection Service, the envelope-stuffing operations of most businesses use sophisticated mass-mailing equipment. The Inspection Service "knows of no work-at-home promotion that ever produces income as `alleged.'"Multilevel MarketingSuch companies ask you not only to sell their wares but also to find other sellers. This can be a legitimate form of business--take for example the pink Cadillac-driving Mary Kay reps. On the other hand, illegitimate pyramid schemes can resemble legit sales operations. An obvious difference is that the emphasis is on recruiting others to join the program instead of selling the product. Unless you find others to join, you'll wind up warehousing overpriced merchandise.Internet Work From Home Scams Such As Paid Surveys Online, etc...Here, you pay for a useless guide to work-at-home jobs--a mixture of computer-related work such as word processing or data entry, and envelope stuffing or home crafts scares. If you get a computer disk, it's probably a worthless list of free government Websites and business opportunities that require more money.Sheila Adkins, associate director of public affairs for the Arlington, Virginia-based Council of Better Business Bureaus, says the Internet is increasing exposure to all types of scams. "We see the same things as before but they're reaching more people over the Internet. If you're looking for a possible business opportunity, don't be fooled by fancy graphics on a Website." Online bulletin board ads may be disguised as casual conversations, warns J. Steven Niznik, a technical guide at www.about.com. "It may appear that a few people just got together to discuss the `wonderful opportunity' they've found," he says. "Sometimes the people posting the inquiries are nothing more than ropers (there to rope you in) in cahoots with the scammers." Detecting Scams: Paid OnlineOnline or off, certain features are common in these rip-off schemes. "Be cautious of ads that incorporate eye-catching words and phrases such as `free,' `no work,' `no special skills required,' and `get out of bed when you want to,'" says Niznik. "What type of business truly gives away anything for free or hires lazy, no-account, unskilled employees?"But the biggest clue that a work-at-home offer is a scam is when a company requests your dollars. "Legitimate employers don't charge you to work for them, period," says Niznik. "To avoid falling victim, never pay up-front fees or do business with companies that operate exclusively by phone, mail, or e-mail." Similarly, Mora advises would-be investors to watch out for promises of earning large amounts of money in a short time with little effort. Most solid investments, from securities to franchises, provide prospectuses and allow you to engage in substantial due diligence. Don't even think about putting a single cent into a prospective venture unless a company provides you with adequate information. "In some types of offerings," says Mora, "earnings claims must be disclosed. Prospective investors must be told how many others have made money. Even if such disclosure is not required by law, you should ask for it. A sponsor's failure to provide it may be a good tip-off that you're dealing with a scam." Make sure you get references as well as check with organizations such as the Better Business Bureau. "Do your own homework to find out if there's a market for your work, or a market for the product or services offered by a certain type of business," says Grant. "Check with your state and local consumer protection agencies, too. Before you make an investment in a business, have an attorney or CPA look it over." Federal agencies can offer critical assistance. The FTC can help find legitimate locator companies. However, most victims aren't fortunate enough to realize a happy ending. If you don't heed the telltale signs of scams, your dreams of financial security can easily turn into bank-account-draining nightmares. Work-At-Home: Avoiding Scam JobsMaking the distinction between a business opportunity and a con game may come down to asking the right questions. The Federal Trade Commission suggests asking the following questions of work-at-home promoters; many apply to anyone offering a business opportunity. Make sure you get the answers in writing:* What tasks will I have to perform? (Ask the program sponsor to list every step of the job.) * Will l be paid a salary or will my pay be based on commissions? * Who will pay me? * When will I get my first paycheck? * What is the total cost of the program, including supplies, equipment, and membership fees? What will l get for my money? After you get a response, decide whether it makes sense to proceed. If the answers are elusive or not forthcoming, find yourself another way to make some money. If you get satisfactory answers, go to the next level of due diligence--references and government agency filings. As you go through the process, make sure you have a topflight attorney, accountant, and financial advisor. What To Do If You're Ripped OffIf you think you've been scammed by a business opportunity or work-at-home offer, it's possible to get your money back. If a company refuses to refund your investment, contact the following agencies:
Work-At-Home
Jobs, Home-Based Business
Opportunity :
Note: These scams are not ranked
by dollars lost or people scammed.
In
fact, there's nothing scientific about the list. It's just the ten home-based business scams
we find the most disturbing. |
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