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Home  /  Financial   /  What to Know About Work-at-Home Businesses

What to Know About Work-at-Home Businesses

What to Know About Work-at-Home Businesses

When money’s tight, a work-at-home opportunity might sound like just the thing to make ends meet. Some even promise a refund if you don’t succeed.

But the reality is many of these jobs are scams. You end up paying for starter kits or certifications that are useless, find your credit card is charged without your permission, or get caught up in a fake check scam.

Other work-at-home offers just don’t deliver on their promises. The ads don’t tell you that you may have to work a lot of hours without pay, or don’t disclose all the costs up-front. You might spend money based on promises you’ll quickly earn it back — but you don’t. People tricked by work-at-home ads have lost thousands of dollars, not to mention their time and energy.

Common Work-at-Home Scams

Internet businesses

Envelope stuffing

Assembly or craft work

Rebate processing

Medical billing

Mystery shopping

Multilevel marketing

How to Know If It’s a Scam

Promises of a big income working from home, especially when the “opportunity” involves an up-front fee or giving your credit card information, should make you very suspicious. It doesn’t matter if the ad shows up in a trusted newspaper or website, or if the people you talk to on the phone sound legitimate. It still could be a scam.

If you’re thinking about following up on a work-at-home offer, do your homework. The FTC’s Business Opportunity Rule has safeguards in place to make sure you have the information you need to tell whether a work-at-home opportunity is a risky business. Under the Rule, sellers have to give you a one-page disclosure document that offers key pieces of information about the opportunity. Use the information in the disclosure document to fact-check what the seller tells you. In addition to reviewing the disclosure document, here are some questions to ask:

  • What tasks will I have to perform? Are any other steps involved?
  • Will I be paid a salary, or will I be paid on commission?
  • What is the basis for your claims about my likely earnings? Do you survey everyone who purchased the program? What documents can you show me to prove your claims are true before I give you any money? Note: If a seller makes a claim about how much money a person can earn, the seller also has to give you an earnings claim statement with more specifics.
  • Who will pay me?
  • When will I get my first paycheck?
  • What is the total cost of this work-at-home program, including supplies, equipment, and membership fees? What will I get for my money?

The answers to these questions may help you determine whether a work-at-home program is legitimate, and if so, whether it’s a good fit for you.

Check them out

It’s a good idea to research other people’s experience. Try entering the company or promoter’s name with the words “complaint,” “reviews,” or “scam” into a search engine. Read what others have to say. After all, it’s your money on the line.

You also might try checking out a company with your local consumer protection agency, your state Attorney General, or the Better Business Bureau — not only where the company is located, but also where you live. These organizations can tell you whether they’ve gotten complaints about a particular work-at-home program. But remember: just because there aren’t complaints doesn’t mean the company is legitimate. Dishonest companies sometimes settle complaints and change their names or move to avoid detection.

Report a Scam

If you have spent money and time on a work-at-home program and now believe it might not be legitimate, contact the company and ask for a refund. Let company representatives know that you plan to notify law enforcement officials about your experience. If you can’t resolve the dispute with the company, file a complaint with:

  • The FTC at ftc.gov/complaint or 1-877-FTC-HELP (1-877-382-4357).
  • The Attorney General’s office in your state or the state where the company is located. Find yours at naag.org. The office can tell you if you’re protected by a state law that regulates work-at-home programs.
  • The advertising manager of the publication that ran the ad. The manager may be interested to learn about the problems you’ve had with the company.

 

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