7 Ways to Spot a Work from Home ScamWork From Home
Money Done Right does not run display ads or accept sponsorships to promote particular products or services. However, we may receive a commission if you purchase or sign up through links on this page. Here's more information about how we make money.
Whether you are hoping to get some supplemental income during a time of financial distress, want to own your own business or would like to pad your pocket during your retirement, working from home can be a great way to bring in some extra money with little overhead. And you’re in the perfect work environment: the comfort of your own home!
Plenty of people make money by working from home. 3.9 million Americans worked from home at least half of the time, according to the 2017 State of Telecommuting in the U.S. Employee Workforce Report.
With so many people earning money this way, it should be easy to find legitimate opportunities, right? Wrong! Scams continue to be a troubling component of this sphere of the job market.
It’s important that you are able to tell the difference between a legitimate opportunity and a scam. Here are seven ways to spot a work from home scam.
1. You Have to Pay Fees Upfront
Many work at home scams ask you to pay fees upfront so the scammers can simply pocket these funds and leave you with nothing, or at least, nothing of value. For example, in the common envelope stuffing scam, the ad says that you can make money by simply stuffing envelopes with letters and offers.
You pay to ship the materials to you. Then, you find out there is no pay.
Instead, the scammers may try to get you to be part of the scam by encouraging people you know to pay for the same “opportunity” and you only get paid if you rope them in.
Another common scam that uses this approach is assembly or craft work. You are told to pay a “small fee” to receive supplies so that you can assemble products like baby shoes, plastic signs or craft items at home.
You do the work and carefully assemble the product according to instructions. When you send the product back to get paid, you are told that it is not up to quality standards and you aren’t paid.
You’re left with the worthless supplies and nothing else.
Other scams require you to pay money upfront, supposedly for certification, training or education. Your money buys you nothing more but a worthless certificate because there is no real job attached to the opportunity.
2. You Have to Give Your Bank Account Information to the Business
The Federal Trade Commission says you should be “very suspicious” of “opportunities” that require you to supply your bank account information in exchange for taking part in the opportunity. This is a common tactic with the internet business scam. It goes something like this:
You come across an ad that promises that you can earn thousands of dollars each month by starting your own internet business. You don’t need experience because “experts” will train you (for an additional fee).
You need to pay a fee upfront and are asked for your credit card information. After you pay, you are told that you have to pay for more expensive services to succeed.
The company keeps your credit card information and continues to charge you with authorized or unauthorized transactions. The only thing you get out of this “opportunity” is debt.
3. You Are Told to Deposit Checks
If you receive a check before you do any work, this can’t be a scam, right? Wrong again.
Some scams instruct you to deposit a check and then wire the same or a smaller amount back to the company. Mystery shopping jobs in which you shop at stores or dine at certain restaurants to share your experience with the owners sometimes use this strategy.
When the check clears, there are no funds or it was written off a fake account, so you are left with no deposit and possible charges from your bank. Meanwhile, the scammers run off to the sunset with the money you wired them.
4. Multi-Level Marketing Is Involved
There are many legitimate multi-level marketing jobs that involve selling products to people and getting other people involved in selling for extra compensation. In legitimate opportunities of this nature, you make commissions based on the price of products you sell, as well as a percentage on what other people you recruit sell.
The FTC warns that if someone suggests that the real way to earn money through multi-level marketing is through recruiting, you are probably dealing with an illegal pyramid scheme and not a legitimate business.
5. It Promises a Lot of Money for a Little Work
Many work-at-home scams target people with limited skills or education.
They promise thousands of dollars for simple work, like stuffing envelopes, doing internet searches, or filling out forms. The old adage of “if it’s too good to be true, it probably is” certainly applies here.
6. There Is Little Information about the Company
In today’s age of information, there should be plenty of information about any legitimate business that is easily accessible. Before you hand over your bank account information or sign up for a new opportunity, check out the business.
Read reviews online from different websites. You might stumble upon other consumers telling stories about the company and how they got scammed.
If you cannot find much information about the business, this could be a red flag.
7. There’s No Human
Another red flag is if you have not had any contact with an actual person. Your only communication is through email from a generic gmail or Yahoo! account.
Your interview is conducted over the internet, too. If you are unable to get a real person on a video chat or you are never asked to interview, this may not be a legitimate opportunity.
Find Out More
The FTC has safeguards in place, including the Business Opportunity Rule that requires these types of businesses to provide basic information to consumers.
Research the company before you agree to anything. If you were scammed, contact an experienced consumer rights lawyer for assistance.
Valerie graduated magna cum laude from the University of Arkansas School of Law where she also participated in Moot Court and the Arkansas Law Review. She practices law in Arkansas, focusing primarily on estate planning and elder law. She has prepared countless estate planning documents and has participated in a number of guardianship cases since she was admitted to the bar. She is a regular contributor to Nolo.