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Most Common Scams
To protect yourself, learn to recognize the most
common work-at-home scams.
ASSEMBLY WORK AT-HOME: Typical Ad --
"Assembly work at home! Easy money assembling craft
items. No experience necessary."
This scheme requires you to invest hundreds of
dollars in instructions and materials and many hours
of your time to produce items such as baby booties,
toy clowns, and plastic signs for a company that has
promised to buy them. Once you have purchased the
supplies and have done the work, the company often
decides not to pay you because your work does not
meet certain "standards." You are then left with
merchandise that is difficult or impossible to sell.
CHAIN LETTER: Typical Ad -- "Make copies of
this letter and send them to people whose names we
will provide. All you have to do is send us ten
dollars for our mailing list and labels. Look at the
chart below and see how you will automatically
receive thousands in cash return!!!"
The only people who benefit from chain letters are
the mysterious few at the top of the chain who
constantly change names, addresses, and post office
boxes. They may attempt to intimidate you by
threatening bad luck, or try to impress you by
describing themselves as successful professionals
who know all about non-existent sections of alleged
legal codes.
ENVELOPE STUFFING: Typical Ad -- "$350 Weekly
Guaran- teed! Work two hours daily at home stuffing
envelopes."
When answering such ads, you may not receive the
expected envelopes for stuffing, but instead get
promotional material asking for cash just for
details on money-making plans. The details usually
turn out to be instructions on how to go into the
business of placing the same kind of ad the
advertiser ran in the first place. Pursuing the
envelope ad plan may require spending several
hundred dollars more for advertising, postage,
envelopes, and printing. This system feeds on
continuous recruitment of people to offer the same
plan. There are several variations on this type of
scheme, all of which require the customer to spend
money on advertising and materials. According to the
U.S. Postal Inspection Service, "In practically all
businesses, envelope stuffing has become a highly
mechanized operation using sophisticated mass
mailing techniques and equipment which eliminates
any profit potential for an individual doing this
type of work-at-home. The Inspection Service knows
of no work-at-home promotion that ever produces
income as alleged."
MULTI-LEVEL MARKETING: Typical Ad -- "Our
products make it possible for people like you to
earn more than they ever have in their lives! Soon
you can let others earn money for you while you and
your family relax and enjoy your affluent lifestyle!
No experience necessary."
Multi-level marketing, a direct sales system, is a
well-established, legitimate form of business. Many
people have successfully sold the products of
reputable companies to their neighbors and
co-workers. These people are independent
distributors who sell popular products and also
recruit other distributors to join them. On the
other hand, illegitimate pyramid schemes can
resemble these legitimate direct sales systems. An
obvious difference is that the emphasis is on
recruiting others to join the program, not on
selling the product. For a time, new recruits who
make the investment to buy product samples keep
money coming into the system, but very few products
are sold. Sooner or later the people on the bottom
are stuck with a saturated market, and they cannot
make money by selling products or recruiting. When
the whole system collapses, only a few people at the
top have made money—and those at the bottom have
lost their investment.
ONLINE BUSINESS: Typical Ad -- "Turn your
Home Computer into a Cash Machine! Get computer
diskette FREE! Huge Selection of Jobs! No experience
needed! Start earning money in days! Many companies
want to expand, but don’t want to pay for office
space. You save them money by working in the comfort
of your home."
This is typical of advertisements showing up
uninvited in your e-mail—an old scheme advertised in
a new way. 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 the same
old envelope-stuffing and home crafts scams. The
computer disk is as worthless as the guidebook. It
may only list free government web sites and/or
business opportunities which require more money.
PROCESSING MEDICAL INSURANCE CLAIMS: Typical
Ad -- "You can earn from $800 to $1000 weekly
processing insurance claims on your home computer
for health care professionals such as doctors,
dentists chiropractors, and podiatrists. Over 80% of
providers need your services. Learn how in one day!"
Generally, the promoter of this scheme attracts you
by advertising on cable television and, perhaps, by
inviting you to a business opportunity trade show at
a hotel or convention center. You may be:
Urged to buy software programs and even computers at
exorbitant prices; a program selling at a software
store for $69 might cost you several thousands of
dollars.
Told that your work will be coordinated with
insurance companies by a central computer.
Required to pay for expensive training sessions
available at a "current special rate" that will be
higher in the future, and
Pressured to make a decision immediately.
Most likely, the expensive training sessions are
superficial, and the market for your services is
very small or nonexistent. The promoter may delay
the processing of your job, citing a backlog or
mistakes in your work. There may also be no central
computer as advertised. You may be left with no way
to deliver what you have promised to your clients or
customers—if you found any—and with no way to earn
any money on you own.
Source:
Better Business Bureau
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