Scams

This page provides you with information you need to know to protect yourself against scams including common scams to avoid, how to evaluate work-at-home opportunities and consume protection resources. Be sure to check the Scam Alerts for recent scam news.

Work-at-home opportunities are big business for scam artists. Each year over billions of dollars is lost to scams. You can protect yourself by learning how to evaluate opportunities, knowing about the most common scams you will run into, and using consumer protection resources. This page provides general information on how to protect yourself.

Scams to Avoid

– Envelope Stuffing (mailing programs)

– Assembly Work

– Gifting Prgrams

– Chain Letters

– Email Processing

– Rebate Processing

– Repackaging Jobs

– Payment Processing (never use your personal bank account to help a company do business).

– Jobs (offers of employment) that ask for money

– Business opportunities that don’t have a product or service.

Evaluating “Opportunities”

You are reading an e-mail or magazine ad that promises to help you make good money working at home. Or your neighbor invites you to a “meeting” to learn about a new way to “leverage time and money”. They all sound so tempting and convincing. So how do you know which deals may be legit and which aren’t? Here are a few rules of thumb to consider when tempted by work-at-home schemes:

  1. If it sounds to good to be true, it probably is. Avoid any program that will “do the work for you” or gives grandiose
    income claims.
  2. Avoid any company that doesn’t have a street address (not P.O. Box) and phone number.
  3. Envelope stuffing and assembly work….stay away from it. I haven’t run into anyone yet who hasn’t lost money on these.
  4. Be careful with jobs that have a free or commercial email address. Anybody with a legitimate job to offer over the internet should have an email address with their company’s domain name… not a commercial account (unless of course it is AOL or Yahoo offering the job).However, many solo-preneurs are now hiring help and sometimes use these accounts to help them organize and screen applicants. So you don’t have to reject jobs from a gmail or AOL account automatically, but do proceed with caution.
  5. The same rule applies to website URLs. Any websites listed at free hosting sites such as Angelfire, Geocities, and Freeyellow, should be carefully investigated. Any company that can’t afford its own website with domain name can’t afford to hire you!
  6. NEVER SEND MONEY TO GET A JOB. Is isn’t uncommon to invest money in a home business, but if you are responding to a job announcement, don’t send money.
    Legitimate employers never charge to hire you. The non-legitimate company will tell you to send money to cover the cost of materials or to process your
    application.

    Don’t believe it. You wouldn’t pay for training or paperclips at your current job would you? These companies usually aren’t offering jobs, just information on how to scam others or how to start a business.

  7. Avoid the hype and look for the meat. Many programs rely on copywriting to create excitement and that feeling of “This is it”. However, you need to look behind the hype for the actual details of the program such as what does it involve?
  8. If you are looking for a home-based job from your newspaper classified ads, 800 numbers should raise a red flag. Most local companies don’t use 800 numbers in
    local ads. If you decide to call, and it sounds like a “job” situation, get as much information as possible so you can research the company. And remember, never send
    money.
  9. What about infomercial opportunities such as Carlton Sheets or Jeff Paul? To be honest, they do provide legitimate information on building your own
    business BUT, most of the information they provide you can get for FREE or cheaper at the library or local book store.

    Further the library and bookstore won’t continue to contact you to upsell thousands of dollars worth of coaching and products.

  10. Network marketing opportunities abound. Over the past few years, MLM has begun to recover from the negative association with pyramid schemes. While the hierarchy is a pyramid in shape (come to think of it, all businesses are!), network marketing is a legitimate business opportunity IF the main purpose is to market
    products.

    You can feel safe in joining the companies that are well-known such as Mary Kay, Melaleuca, Discovery Toys, Shaklee and others. Even so, it always pays to research any business opportunity. Be sure you understand the compensation plan and any refund policies. See below for information on how to investigate companies.

  11. Always “sleep-on-it”. Many business opportunities can get you so excited about the possibilities that you end up writing a check without thinking. Always leave your checkbook and credit cards at home! Put the magazine ad away for a day or two. Turn off the t.v. You won’t miss out. The ads are run all the time. If you decide to pursue it, it will still be there…if its still in business.
  12. 12. Watch out for Home Business Associations and Home Business Seminars. Many have been investigated by the Federal Trade Commission mostly for misrepresenting earning potentials to consumers. That’s enough to keep me away.

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Protect Yourself

You have some ideas on how to weed out the scams from the legitimate work-at-home opportunities, but there is more you can do to prevent being a victim of a scam and
recoup your loss if you are scammed.

First, consider the above information before doing anything. If you think you might have a viable opportunity, do the following:

  1. Contact the Better Business Bureau located in the area the company is located. Look in the phone book for the area code and call (area code)555-1212 for long distance
    information to get the local BBB phone number. Or visit the Better Business Bureau on-line. Remember though that just because a company isn’t listed doesn’t mean it’s legitimate.
  2. Visit the Federal Trade Commission on-line for its consumer protection information on money-making schemes. You can also file complaints if you have been scammed.
  3. Contact the Attorney General’s Office in the state in which the company is located.
  4. Get references, lots of them, and call them all. Be aware that some references may be bogus. Some scam organizations have people giving false references.
  5. See what you can find on the Internet. You can do searches and participate in message boards.
  6. NEVER PAY BY CHECK ONLINE! If the company only does checks online, that should be a tip off. (In fact, if any work-at-home opportunity only takes cash or check…think twice). Once you give your checking account information to someone else, you are vulnerable to having more funds withdrawn. The only recourse if that happens is to close the account.If this has happened to you, contact your bank and file a fraud report. Sometimes your bank will reimburse your money.
  7. Pay with credit card not a debit or check guarantee card. Credit card companies offer greater ease of getting your money back if you are a victim of fraud and can give you a charge-back if the company isn’t co-operating. Further, you are usually liable for only $50 when your card is lost or stolen. That kind of safety may not be offered with a debit or check guarantee card.
  8. Any doubts? Don’t do it!

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Common Scams to Avoid

Typing/Data Entry

“Home Typists Needed,” You may have seen ads like this in your local paper and online. Perhaps you even responded, calling the 800 number or going to the website hoping to hear about companies hiring home workers. If you did, you probably discovered these ads were misleading. Usually you get a sales pitch to buy a book, a deceptive ploy to become an affiliate marketer, or simply asked to send money for a “kit” to get started. The first two are not necessarily illegal, but they are deceptive in that don’t actually involve a job. The third usually is illegal as you usually don’t get a kit.

Money/Payment Processing Schemes

This scam presents itself as a “job” and since it doesn’t cost any money to participate, many people have been duped into joining and then have lost thousands of dollars. The scam works like this: A company outside of the United States says it needs help processing payments from customers in the U.S. The “employee” would open a bank account into which the company would arrange for it to receive payments. The “employee” then gets a certified check made to the company for the amount deposited minus 10% (the employee’s payment). Unfortunately, a few days later, the bank calls the employee to inform him that the deposit was bogus. The “employee” (victim) is now responsible for covering the check that was sent to the company.

The best way to avoid schemes like this is to remember that companies will never ask you to use your personal account in business transactions.

Chain Letters

Remember when a chain letter was a chain letter? It told you to send money, recipes, or whatever to the person on the top of the list and add your name to the bottom. (Then they added a bad luck curse to get you to do it!) Today chain letters have gotten a little more clever…seemingly offering something for the money you send. Nevertheless, United States Post Office clearly states that chain letters that promise monetary gain, regardless of what else it offers, are illegal!

According to the United States Postal Inspection Service, a chain letter is a “get rich quick” scheme that promises lots of money by doing what the letter says which is usually send money to the top person on the list and add yours to the bottom. You send the letter to others (or sometimes the originator of the letter will do the sending for you) and eventually, your name will move to the top of the list and tons of money will arrive. Sometimes, the letter indicates that you will receive reports for the money, and you will send those reports on as you receive money from others.

The Postal Inspection Service is clear when it says that chain letters, even those that offer some sort of “product” are illegal.

“Selling a product doesn’t ensure legality. Letters that request money or other items of value, and promise a substantial return to the participants violate Title 18, United States Code, Section 1302, the Postal Lottery Statute.”

Further, whether the letter comes snail mail, e-mail or any other route, it is still illegal because the mail is used at some point, at
least to send the money.

(Note: many programs are now using online payments such as Paypal. While the US Mail is not used, I would still avoid this type of program.) The United States Postal Inspection Service warns to not be fooled by letters saying the United States Postal services declared it legal. Neither the Postal Service or the Postal Inspectors give prior approval to any chain letter.

It also recommends that you turn any letter you receive that promises money for participation to your local postmaster or nearest Postal Inspector. Let them know you received the letter and suspect that it is illegal.

More important than legality, chain letters don’t work. Many who participate don’t send money, they just add their name. Others list numerous names and addresses, but
all money goes to the one person. A money chain letter is scam any way you look at it. Don’t be taken in.

United States Postal Inspector: Consumer Fraud

Internet Fraud

Spoofing (using someone else’s email address), phishing (stealing access codes and passwords) and work-at-home scams are running rampant on the Internet.

The FTC’s goal is to ensure that consumers feel safe from Internet fraud. It maintains a website at www.ftc.gov and with cooperation with other agencies has created a second site at www.consumer.gov to provide information on consumer issues.

The FTC offers a great deal of information to protect consumers. Still, it is up to the consumer to protect him/herself by utilizing the information. If you have or think you have been scammed, www.ftc.gov offers information on how to report your experience not just to them but, to other consumer protection agencies as well.

E-Mail Get Rich-Schemes

Are you disappointed when you check your e-mail only to discover scrolling pages of “get rich quick” schemes? Perhaps, in your desire to work at home, you have actually read or even responded to one of these ads. I’ll admit I did. The Better Business Bureau warns consumers to exercise the same cautions you would for mail and phone solicitations. It recommends the following to protect yourself:Get a complete list of all current and future charges and obligations you may incur.

  • Ask for a description of any help, training, or financial assistance the company will provide.
  • Get references; ask for the names and addresses of others who have purchased business opportunities for the company.
  • Get a written description of the conditions under which the contract may be terminated or modified by either party.
  • Avoid companies that don’t have a phone or street address.
  • Home-based Business Seminars

    Have you seen the infomercial for the FREE home business seminars? Have you been tempted to go? Have you gone? Well, according to the Federal Trade Commission, several companies that offered free seminars and charged $495 for home business “starter kits” were charged with misrepresenting earnings and success rates. According to the FTC, at the free home based business seminars, the defendants induced consumers to purchase their home based business starter kits by making claims that each of the business ventures it was selling was proven money-maker. In fact, few people who purchased these kits made substantial money. Further, the FTC reports that the claims made in testimonials do not represent expected results from using the kits.

    While filing of a complaint doesn’t necessarily mean the law has been violated, the commission makes such a complaint when it has “reason to believe” that the law has been violated. This situations reminds those of us who have looked or are looking for an easy work-at-home situation to always investigate the companies and products before spending any money.

    For more information regarding this or other complaints by the FTC visit their website at www.FTC.gov.

    Network Marketing

    One of the biggest concerns people have regarding network marketing is its legality. The hierarchical structure and past government investigation into Amway Corporation are the leading causes of skeptical thinking regarding network marketing. The fact is, network marketing is legal if done legally! The physical structure has nothing to do with determining the legality of network marketing.

    A legitimate network company compensates based on the volume of product moved through a person’ s organization. Usually, the person must have a certain amount of product they sell themselves, but they are also paid based on the amount of product sold by others they recruit and train. Illegal pyramid schemes compensate (in theory) for recruiting others into the pyramid.

    What is the difference? Legitimate network companies don’t compensate for the act of getting a recruit. They compensate for a percentage of how much a recruit sells. In even simpler terms, network marketing is about the distribution of products, illegal pyramid schemes are about recruiting people.

    Because network marketing resembles a pyramid in its structure, many think it is illegal. The fact is most organizations from the federal government to local non-profits resemble a pyramid in structure. An example would be a company with a president, several vice-presidents, more supervisors, more managers and even more workers. So the physical structure is not what makes a pyramid scheme illegal. Telling people to pay an amount to join an organization and they will be compensated merely for getting others to pay to join is illegal. In its simplest form, it is a chain letter. More complex forms have cost people thousands of dollars in more elaborate ponzi schemes.

    So, how do you know which company is ok?

    1. The focus of the company should be distribution of products to an end users. An end user is essentially customers and not thousands of dollars of inventory in one person’s garage.
    2. Commissions are paid on product distribution (sales), not for the act of recruiting. “If you are paid simply for recruiting, or for selling training, distributor kits or training materials- then you’re in a pyramid.”
    3. States with network marketing laws require companies to repurchase inventory returned by distributors. Sometimes there are different policies about how this is done but, the purpose is to prevent a distributor from having a garage full of products he can’t afford with little ability to sell it. You can always find someone somewhere who tried network marketing 20 years ago only to end up with a 20 year supply of soap. Legitimate network marketing companies tend to discourage buying too much inventory.

    While there are many other factors to consider when choosing a network marketing company, the first should be whether or not it is legal. Hopefully, the above information will help readers in making that determination. As always, contact the Better Business Bureau and Federal Trade Commission, get references and research any company you are considering.

    Pyramid Schemes

    What’s the difference between a pyramid scam and network marketing? A product. Network marketing involves the distribution of a product. The product is sold by a
    representative and by any people the representative has sponsored and trained. Because the hierarchy of these groups looks like a pyramid, many erroneously believe they are illegal. The true illegal pyramid scam (also known as Ponzi), involves no product. Basically, you give $2000 to some one who then helps you recruit people to give you $2000. The truth of the scam may be hidden in words such as “investment” or “buying in at a higher level”.

    Medical Billing

    Have you been tempted by advertisements for a home-based business that can help you pull in $50,000 or more a year doing medical billing? Before you part with your money, consider this: The Federal Trade Commission has brought charges against several companies for misrepresenting the earnings potential of medical billing centers and failing to provide certain key investment information that the law requires.

    Taking certain precautions can help you minimize your risk of losing money to a medical billing business opportunity. Here’s what the FTC recommends:

    • Check out the company with the Attorney General, a consumer protection agency, and the Better Business Bureau where you live and where the business is
      headquartered. These organizations can tell you if there are any unresolved complaints about the company. While complaints may alert you to problems, the absence of complaints does not necessarily mean the company is legitimate. Unscrupulous companies may settle complaints, change their names, or move to avoid detection.
    • Call the Secretary of State where the company is headquartered to determine how long it has been in business.
    • Get all earnings claims in writing. Insist that the promoter give you written substantiation. Be sure it includes the number and percent of others who have earned at least as much as the promoter claims. If the promoter hesitates or refuses, walk away from the deal. Don’t believe what was said about sales, profits or income.
    • Be skeptical of past success stories. Don’t rely solely on the names given to you by the promoter. Fraudulent companies sometimes hire “references” to speak to potential investors about earnings claims. Ask the promoter to give you the names of all or many previous purchasers so that you can pick and choose who to call. When speaking to references, ask them for the names of their clients and details of their operations. If the promoter or the references hesitate or refuse, walk away from the deal.
    • Consult an attorney, accountant, or other business advisor before you sign any agreement or make any payments upfront.

    If you think you’ve been defrauded in a medical billing business opportunity, contact the company and ask for your money back. Let the company know you plan to notify law enforcement and other officials about your experience. Keep a record of your conversations and correspondence. If you send documents to the company, make sure you send copies, not originals. Send correspondence by certified mail—and request a return receipt—to document what the company received.

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    Consumer Protection Resources

    If you have experienced fraud in any of the above schemes and are unable to get your money back, contact the following companies for help. You may not get your money back, but you can fight to prevent the company from continuing to scam others.

    • The State Attorney General’s office or the Secretary of State where you live and where the  company is headquartered. The staff can tell you if you are protected by any state laws that regulate business opportunities.
    • The Federal Trade Commission. Although the FTC cannot resolve individual disputes, the information you provide may indicate a pattern of  possible law violations requiring action by the Commission. Write to Consumer Response Center, Federal Trade Commission, Washington, DC 20580, or call 202-326-2222, TDD: 202-326-2502.
    • The National Fraud Information Center (NFIC) at 1-800-876-7060, 9 a.m. – 5 p.m. EST, Monday – Friday.
    • Your local Better Business Bureau (BBB) and the BBB where the company is located.
    • Your local Postmaster. The U.S. Postal Service investigates fraudulent mail practices.

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    1. Hi Mujibur, Thank you for visiting Work-At-Home Success. There are many work-at-home jobs posted here as well as tips on how to find and get hired to a work-at-home job. Good luck with your search!

    2. Hi Mujibur, Most typing jobs I see are scams. If you want to work at home typing, look for transcription jobs. Many require faster typing speed than 45 wpm and some require knowledge or experience in a specific industry. If you sign up for the WAHS newsletter, you’ll receive a report that has a few companies that frequently take on new transcription workers. You can also check the WAHS daily job post and newsletter as I occasionally post transcription jobs.

    3. There are so many people that I have tried they say that they are free but once you get their info they want to charge you a very high price and right now I can’t afford their price my family consist of 2 children and one on the way and my husband works a minimal wage job and we don’t have a lot of money

    4. Navigating work-at-home opportunities can be tricky. Even free or low cost options, usually cost more than expected because of marketing. Jobs don’t cost money, but you still may need to invest in something to be able to do the job. With that said, with creativity, industriousness and dogged-determination you can work at home even if you have little to no money. The world is littered with people who had nothing, but through sheer will achieved their goals. You can do it too!!

    5. The information you have been providing is most valuable to say the least! I have been looking for some genuine job. I hope I will succeed in landing some job.

      As I wrote above the info you provide is a guidepost for a person who is really looking for a job.

      Please keep it up!

      Thanks

      Yashwanth

    6. That’s funny and it’s true for some, and yet I’ve met many people making money with MLM. Direct sales companies are like any other work-at-home option in that a tiny few get rich, more make enough to reach their initial goals (i.e. stay home with kids) and many fail. MLM’s problem is that many recruiters rely on hype, the entry cost is so little that people don’t do adequate research (it’s easy to walk away from an MLM investment), and expectations are unrealistic. If people treat a MLM business like any other business by doing the upfront research, developing a plan and working the plan, more people would be successful.

    7. Hi,
      I wondered if you know anything about Web Fortune Vault. I saw the ad on your website as well as other websites I have visited, about a Charlottesville woman that learned about it and is now experiencing great earnings. She invested into the company to use the system but when I looked at the website, there is no physical address throughout, in fact I found no contact information whatsoever. Are you familiar with the job opportunity there?

    8. Hi Isa, I try to screen all ads, but sometimes, one sneaks through that I don’t necessarily like (especially through Google.). I don’t know about Web Fortune Vault, but it’s not a job (anything that asks for money isn’t employment). If it’s showing a “news” story about someone making money from home, that is suspicious too. I’ve never seen a news story about specific work-at-home programs and in fact, most times I interviewed I’m asked about scams more than anything else. I always suggest people look for work-at-home options by considering what you’re good at or enjoy doing. Programs like Web Fortune might teach you how to do affiliate programs or something else that is legit, but if it uses deception (i.e. fake news stories), I think they should be avoided. Further, sometimes programs like this are overpriced or have a continuity program (continue to charge you) that are hard to get out of.

    9. Thank you Leslie. Always nice to have you as a resource. You probably don’t remember me but I took one of your classes at PVCC. This was some time ago and I am just now getting serious about wanting to work at home (or doing something about it). I appreciate the feedback. Enjoy your Wednesday!

    10. hi
      this is first time i am applying to anyone for the job at home.. but most i heard that are fake.. now i’ll see how much you guys are true for giving job to the people.
      i know only guest blogging..
      is there any job for me and if possible then i am indeed of a part time job with the good income.
      regards
      awais.

    11. Hi Awais, There are many scams out there, but also there are millions of people working from home, many in jobs. The key is to recognize that work-at-home jobs are like traditional jobs – you need skills and experience to get them. And you need to go through a hiring process. I list work-at-home jobs every weekday, plus I include resources for finding jobs if the jobs I post don’t work for you. You should read the information on getting a work-at-home job and how to avoid scams before starting your work-at-home job hunt. Good luck.

    12. Is the AWAI writers course for copywriting/letter writing legitimate? I understand it is not a job offer, but I feel the cost of the course is expensive. If you endorse it, I will try it, only because I need the pointers for successful writing they promise, but if you feel it is a scam, just to take my money, I will pass. Writing is a passion I have, but I am not very good at it or very structured. A good teaching course would help me, but I want it to be the right course.

    13. Hi Sharon, I took the AWAI copywriting course several years ago and found it really good. I don’t copy write as a profession, but it helped me with my own marketing materials. This course focuses on persuasive writing, like sales letters and understanding how to use words to sell. I haven’t reviewed the course in some time though. What I liked was that it had steps and examples that were easy to follow and understand. It had a robust discussion/forum area that offered good feedback as you worked on the assignments that would be graded (not all homework is submitted for grading). And it had a job board to help you find work. I think copywriting is a great skill to have and sell. It can be more lucrative than other forms of writing. I thought AWAI offered a payment plan which might help. If you want a lower cost option that can give basics (but not the homework and details) you can get the book “The Elements of Copywriting” by Blake and Bly, which outlines how to do different types of copy writing. It’s a less expensive way to see if you want to learn more. I hope that helps.

    14. I am looking for a legitimate work from home part time job. I saw something today about work at home institute and doing surveys for income. I am not interested in full time work as I have full time job now & would like to retire & just make enough money to help out. Are these things legitimate they ask for money up front to get the information. I am new to this. Thanks for any advise or help you can give

    15. Hi Deb, There are some situations in which it’s okay to spend money. For example, buying information or starting a home business. However, you never want to pay to get hired to a job. You don’t need to pay for survey information either. Survey companies are free to join. Here is an article about surveys including a list of some survey companies.

    16. Hi Leslie,

      I need help as fast as possible. I’m in a very bad spot right now that I literally cannot get out of it. I work from home, but don’t make enough money doing what I do so I’m looking into affiliate marketing since that’s the only other thing I can think of in my current situation. Obviously, I can’t explain it here. I was wondering if you’ve heard of Jeff Buchanan and the Instant Payday Network along with My Cash Freebies? I need to start something as fast as possible, but I don’t want anything illegal or anything that’s going to lead my nowhere fast. I’m not looking to make an $5,000 overnight or in a day either, although it would be nice! :)

      If you know anything about it, could you please share what you know.

      Thank you so much,
      Brenda

    17. I don’t know about these specific programs, but in general I don’t like these types of programs. You’re required to sign up for deals and if you don’t read the fine print, they could result in you’re spending more money. Affiliate marketing is a great way to earn income, but it’s not fast (or instant). If you need money now, you might be better off to sell items on eBay (or other online sources… I just posted an article about it here) or do some microwork. You can work to build affiliate income at the same time, but I think selling your stuff and microwork will generate income sooner. Also, when it comes to affiliate marketing, there is tons of info on the Internet for free. You don’t need an overpriced or deceptive system to make money at it. Most successful affiliates I know blog and add affiliate links to that. Good luck.

    18. I would love to do this kind of work. I am retired and have issues that interfere with going out and working. I have tried all of these programs that come across my computer. I’ve never made any money from them. Maybe I’m an old man but I don’t see why I have to pay to get a job. So I stopped doing it.

    19. Hi Forest, You’re right… you don’t need to pay money to get a job. It sounds like the programs you were trying weren’t job, but money making schemes, some of which might work, but they aren’t employment. I always recommend people who want to get a job or even start a business, start by tapping into the skills, interests and experiences they already have. There is lots of information here at WAHS to help you. Plus the podcasts offer insights by those who’ve been where you are, and have achieved success working from home. Thank you for posting.