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7 Popular Work at Home Schemes and How to Spot Them

You open your email one morning and there it is ­– the most enticing, perfect job offer you’ve ever seen.“Be part of one of America’s fastest growing industries. Earn thousands of dollars a month…and you can work at home!” the ad reads.

The best part is the job will require very little work.

Work at home scamsIt sounds too good to be true.

Well, you might actually want to slow down for just a minute. How do you really know that job offer is legit? There are many work-at-home schemes that entice people with huge promises. In fact, some work-at-home offers are illegal and could land you in potential trouble should you participate.

Since that is the case, it would be wise for you to know the most popular work-at-home schemes and how to identify if that job offer really is a scam.

Popular Work At Home Schemes

According to the Federal Trade Commission (FTC) and the Federal Bureau of Investigation (FBI), these job offers have been identified as the most common work-at-home schemes:

1. Start your own Internet business. The company offering this deal claims no experience is necessary because they will coach you on how to run the business. You are required to pay up front for the opportunity to get in on the deal. Once you make the initial payment, the company upsells you into more expensive services as a way to guarantee your success.

2. Be an envelope stuffer. This classic scheme asks for a small fee so that you can make money each week stuffing envelopes. After you send the money, you’re likely to receive a letter encouraging you to petition your friends and family with the same opportunity. In the end, you only receive money if the people you invite respond to your invitations the same way you did. The promoters rarely pay anyone.

3. Assemble products or make crafts. This offer says you can assemble or create items from home if you invest money in equipment and supplies. After you’ve spent hours making the product, the company says your work is not up to standards and refuses to pay.

4. Processing rebates. These ads require a small fee for training, certification or registration so you can earn a living processing rebate checks. You are guaranteed to learn from trained consultants that have successfully worked the program. All you end up getting is poorly written training materials and no rebates to process.

5. Medical billing. These schemes encourage you to help doctors process claims electronically. In exchange for a fee you’ll receive the software necessary to launch your own medical billing business. In reality, the company rarely provides legitimate contacts in the medical community and you end up generating very little income.

6. Become a mystery shopper. The biggest scam in the mystery shopper industry centers on fake checks. You’ll be asked to deposit a check into your bank account, keep a small amount for your “work” and then wire some of your money back to the “employer.” The problem is that the original check was phony. Once the bank finds out you’ll be on the hook for the counterfeit check.

7. Multilevel marketing pyramid schemes. Some multilevel marketing plans (MLM) are legitimate. You earn money by direct sales of a product. But those ads that suggest you’ll earn money by recruiting friends and family to be distributors of a product are pyramid schemes. The scheme grows exponentially as more and more people are recruited and send money to the company for the promotional materials and inventory. However, in the end no one makes a real profit except the criminals.

How to Spot a Work-at-Home Scheme

People in challenging financial situations (i.e. the poor) are prime targets for work-at-home schemes. Senior citizens are also susceptible because they grew up in a different era, were raised to be polite and trusting and are less likely to report fraud or suspicious activity. Even college students are now being targeted.

If one of these emails finds its way into your inbox here are some clues the great opportunity may actually be a scheme:

  • Lots of money promised for simple tasks
  • The job offer comes from a complete stranger
  • The company requests up-front payments
  • They ask you to wire money
  • There is high pressure to “Do it now!”
  • It’s promoted as a limited time offer

If you choose to follow up on the solicitation do your homework. The FTC has safeguards in place to help you determine if a work-at-home opportunity is risky. Asking some simple questions like, “What tasks will I perform?”, “When will I get my first paycheck?” and “What is the total cost of the program?” may also help you sniff out the scheme.

Most importantly take it slow and don’t be pressured into something you might regret later.

Questions: Have you ever seen these work at home schemes? Ever participate in one? How did that turn out? What other work at home schemes have you seen?

Image by Miles at FreeDigitalPhotos.net

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  1. Good post. I recently attended a free class where they taught you how to make money from online trading. I got a glimpse into their trading technique which was what I was curious about but their full time classes were $5K to $6K. It’s another scheme.

  2. Any kind of “make money at home” offer that requires me to pay to get started would raise a HUGE red flag for me. In the case of secret shopping (which I do), if any secret shopping outfit requires me to pay to sign up, I immediately delete the email, or move on. Any quality secret shopping service does not charge their shoppers to be part of their organization.

  3. Dane Hinson says

    I always wonder who is putting in all of the work necessary to operate one of these schemes? Must take endless hours to set up the scheme and operate it…

  4. Multi level marketing pyramid schemes…I got caught up in one in college. It was right when the internet was still in it’s infancy and it was marketed that online shopping would be the next big thing. They were right, but not through this type of scheme. Fortunately it was a small investment and they gave me my money back as I backed out early. It seemed like the money making scheme for them was not necessarily selling their wares (though I’m sure they made money that way), but in recruiting people to sell and SELLING THEM CDs/books/etc to teach them how to sell!

  5. I was a victim of a work-at-home schemes before. I worked for almost a month and I even sent them a registration payment. 🙁

  6. When I was in college I actually tried the “make something from home” scheme to try to make extra money and it was AWFUL!! They sent to you a few pieces that needed to be assembled together to look like the sample they sent to you; however, if you didn’t do it EXACTLY like the sample you wouldn’t get paid and it took hours to even get it to look close to the sample, so at the end of the day, I was making less than $1 an hour for my work. Needless to say, it didn’t last long.

    • “…$1/hr….” Haha…I wouldn’t have stayed in that either. You could make more doing anything else. It’s interesting how breaking down our pay by hour brings perspective to the job. No one should be working for that little.

  7. That old adage certainly holds true when things look too good, they are probably are! My Mom and sister do work for a legitimate MLM, which is why I think some people fall prey to the scams because there are legitimate ones out there. I admit to being nervous initially but it has worked out very well for them. The internet has probably made it easier for some of this scams to prosper but it has also made it easier for us to do research and find out about the scams too.

    • Glad your mom and sister are doing well with a legit MLM. I’d agree that some people’s success is what draws others to these and makes them ripe for scams. Do research first and make sure they are right for you.

  8. Michael S says

    My sister in law does mystery shopping, but it isn’t the same type of system mentioned here. She has to go to restaurants, or websites, and do some task. She then reports on how it worked out. She makes about 600-900$ a month. When I asked about my wife doing it I was told they only had a few slots, and they are taken. So, it seems some of those are legit jobs, but not very common.

    MLM is an interesting concept. It works, which is why people try to take advantage of the system, and be dishonest. This in turn comes back on the legitimate businesses, and now they have to defend themselves against assumptions.

    As a side job I do work for a MLM company. They are a financial services company, and they are massive. They help people learn how to get out of debt faster, and save for retirement. Your there to help families do this, and if there is a solution you can provide(investments, life insurance, save on auto/home, health, etc) you have the opportunity to make money helping them. You also can recruit on under you, which starts a chain effect of helping more and more(while you get a percentage of what they do). I’ve made money helping already, and I”m only about two months into it. They get flak for the recruiting aspect. The thing with a pyramid scheme is that the money is made on recruiting. Nothing else of value is involved. Primerica makes 0$ recruiting. You pay a little money to join, and they pay a lot for all your licenses you need. The recruiter makes 0$ recruiting also. The only way anybody makes any money is by getting out there, sitting down with a family, and providing solutions for their financial needs. That’s it. If anybody is interested, let me know. I’ll locate an office near you. Check it out. Free information is free. 🙂

    I will say it feels great to get to watch a family change from being ok with debt, and no retirement to wanting to get out of debt and have hope for retiring! Just have to know where to start. That’s what we do. Teach. 🙂

    • When I worked in retail we had people mystery shop our store for the company. We were graded on our performance (on our interaction with the mystery shopper…which we of course didn’t know at the time was testing us).

  9. I was guilty of falling for #2 years ago. I was in debt and desperate to earn more money and fell for the promise they sold. Of course, it didn’t take long to realize it was all a scam. Like the saying goes – if it sounds too good to be true then it likely is.

    • “…desperate…” That’s what the scammers are hoping to play off on…people’s fear and desperation. I can see how it would be easy to fall for these when it seems like there is no hope.

  10. I have never been a participant in any of these schemes, but I can’t say I’ve never been tempted. As someone who has longed to stay home, I would read the stories or pitches and think “what if this is the real deal?” My intelligence always won out, but these shady folks certainly know who to target.

  11. I have an Etsy jewelry store, my blog (business), and I freelance write. It’s nice to have multiple streams of income in this way in case one doesn’t work out. And I enjoy them all in different ways.

    • Having more than one way to earn income is becoming increasingly important. Brinigng in some extra income can really be helpful to those trying to reach a financial goal like paying off debt.

  12. Jayson @ Monster Piggy Bank says

    Are you aware of Letter From Nigeria? My friend encountered this 419 scam, another term. This bait-and-switch has recently gained a lot of attention. People don’t fall for this.

  13. Good advice Brian. I remember pre-blogging I used to wonder if blogging was a work at home scam. I’m glad it didn’t turn out to be!

    • Yes…blogging should not be on the list of scams. But it’s not an easy endeavor by any means to make it a legit business one could live on. Lots of work.

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