So you want to start a home business and work at home. Millions of people do. Unfortunately, there are also millions of people working at work at home scams.
Youve seen the ads theyre in your newspapers, plastered across the Net, in your email. Work at home! Make $3000 a week! But the only ones who make money off these supposed work at home or home business opportunities are the scamsters. All you get is a dent in your pocketbook and disappointment.
In case youre tempted, heres how to recognize and avoid some of the most common work at home scams.
1. Envelope Stuffing Work at Home Scam
The pitch: You can learn how to earn money stuffing envelopes at home (for a small fee).
For your fee, youll likely receive a letter telling you to place that same envelope stuffing ad in newspapers or magazines. You, of course, get to pay for placing the ads. The only way you will earn money is by bilking other people who respond to your work-at-home ad.
2. Assembly or Craft Work at Home Scams
The pitch: You will make good money working at home by making things which the company will then purchase from you.
The way this scam works is that you pay (sometimes thousands of dollars) for materials and equipment upfront. You might have to buy a sewing machine from the company, for instance and/or parts for whatever item youre assembling. Then you make the items but the company never does buy them back from you. None of your work is ever up to standard according to them.
3. Computer Work Work at Home Scams
The pitch: You will make money working at home doing data entry and word processing tasks. All you have to do to get started is send in a small fee.
If you fall for this work at home scam, what youll get is a useless guide to work at home jobs or a disk with generic information on how to run a business and a list of business names. If you bother to contact the businesses listed, youll find that theyre either not interested or pay an abysmally low rate.
4. Medical Billing Work at Home Scams
The pitch: Theres a crisis in the health care system and you can make big money by starting a home business providing electronic billing services, providing services such as billing, accounts receivable and electronic insurance claim processing to doctors and dentists.
For your investment of $2000 to $8000, you are promised software, training and technical support. Unfortunately, you are not promised any clients. The FTC (Federal Trade Commission) says,
Few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues - let alone recover their investment and earn a substantial income. Competition in the medical billing market is fierce and revolves around a number of large and well-established firms.
5. MLM-Style Pyramid Scheme Scams
The pitch: You will make big money selling the products or services of a particular company.
The way MLM works is that as a distributor, you earn commissions both on your sales and on the sales of the people you recruit to become distributors.
The problem is that some MLM businesses are just pyramid schemes, frauds where the products and services only exist to make the opportunity look legitimate. The scam is that only the people at the top of the pyramid make money. Everyone else is just a bagholder.
Pyramid schemes are illegal in Canada and in many American states. See Is It MLM or a Pyramid Scheme? for more on how to tell the difference between the two and protect yourself.
These are just five of the most common work at home scams. There are many, many more, often masquerading as business opportunities. Internet-related business opportunities are just the latest flavour of these work at home scams promising big money for little work or investment. Whenever you read a business opportunity or work at home ad, stop and ask yourself:
- Is the ad vague about what you would actually do but promises big earnings or wealth?
- Does the ad promise that you will make big money working a few hours a week?
- Is there a fee for getting more information (either a direct fee or a number for you to call which you will be billed for)?
- Is there any experience necessary to do the work or start the business?
- If you express interest, are you pressured to act immediately?
Genuine business opportunites, whether work at home or not, dont require fees to get further information or use high-pressure sales tactics to try to force you to make a fast decision. If the work at home ad meets any of the above criteria, trash it; its just another work at home scam or bogus business opportunity from someone who wants to take your money and run.
If you do become the victim of one of these work at home scams, in Canada contact:
The Canadian Council of Better Business Bureaus. Call 416-644-4936 (Eastern time zone).
The Canadian Competition Bureau. Call toll free 1-800-348-5358.
In the U.S. contact:
The Federal Trade Commission. Call 1-877-FTC-HELP (1-877-382-4357).