Types of Work at Home Scams

Types of Work at Home Scams

Work at home scams typically fall under several variations on a few themes. Some work at home scams are pure cons while others are simply poor money making opportunities. But if time is money, then an "opportunity" that robs you of time with very little in return is, in my book, a scam. This list of possible work-at-home scams outlines both types.

To determine which are legitimate work-at-home opportunities, it is important to learn the telltale signs of work-at-home scams because the details of individual schemes are always changing.

Process Rebates Scam

The pitch in these work at home scams is that you make money just by filling out online forms; everything you need is provided. This is your classic bait-and-switch scam. You send $150-$200 or more for a program that will allow you to "process rebates at home." At best, what you get is information, which could be had for free elsewhere, about setting up an Internet business. At worst you are hooked into a work at home scam where you use your money to process rebates but are never reimbursed.

Google Work at Home Scams

Google work at home job ads that purported to charge $2 as a nominal fee to help Google find the serious applicants, really ended up charging a monthly sum (perhaps as much as $80) to the scam victims' credit cards. In addition to these work at home scams that promote non-existent jobs at Google, there are also home business kits promising big money with little effort by using Google Adsense. Don't fall for these either. Building a business using Adsense takes a lot of time and effort. More on Google job scams
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Home Assembly/Envelope Stuffing

These are not legitimate. They are work at home scams. Think about the logic of it. Machines can stuff envelopes, and the cost and time involved in mailing work to be assembled simply isn't efficient.

Here's how it works: Answer an ad for home assembly or envelope stuffing by paying a fee or for the inventory. Assuming you do receive anything, you then assemble or stuff as instructed. You send your work back, expecting payment. Yet the company deems your work--no matter how perfect--not up to its "standards." The clause saying work must meet company standards is in the information packet, but the standards are never spelled out.

Directories of Business Opportunities/Business Software

Of course, there are legitimate books, directories and software about starting an online business, but look for them at reputable software dealers, booksellers or libraries. The ones sold only through websites or mail are very likely work at home scams. Often you see them advertised on Google Ads on websites and in search results. Typically they make big promises without really saying what they have to offer. Also falling under this category are "guaranteed money-making systems," business start-up kits and stock-picking software.

This is assuming that you ever get what you paid for. If the website promoting the product has no usable contact (i.e. a working phone or physical address), how will you contact it if your product doesn't arrive?

Anything Involving Wiring Money or Cashing Checks

The way these work at home scams operate is that the company sends you a check and asks for most of the money to be wired back under some pretense. Usually you are allowed to keep some portion of it as your payment. Problem is these checks are phony, and they bounce in your account. But only after you've wired the money out, and you're now on the hook for it with your bank.

The pretense for the scam is often different. It might be that you're supposed to be checking the quality of customer service at the bank or the wire transfer agent. But the simple rule for not falling into this scam is to never cash checks or wire money for anyone you don't know!!

Direct Selling/ Multilevel Marketing (MLM)

The legitimacy of MLMs vary greatly. Reputable companies, like Avon and Mary Kay, use multilevel marketing to sell quality products. But others use MLMs to sell questionable products or focus so much on recruitment, making them essentially pyramid schemes or work at home scams.

Anyone considering direct sales should understand the risks. Reps in MLM not only sell product but recruit sales reps or a "downline." You get a commission on your downline's sales, and often you sell your product to them. But remember there is an "upline" taking a commission on your sales. So that's a lot of fingers in everyone's pie (or profits). Plus, with so many reps recruited, the market can become saturated, making it hard for new reps to recoup initial costs.

Pyramid Schemes

A pyramid scheme is basically a business model where enrolling more people into the scheme is the basis on which you are paid. While some deem direct sales as product pyramid schemes, those with sales associates who have strong retail sales outside their downline and products with a wide appeal are less risky. Direct selling operations that focus more on the recruitment of new sales people and less on selling the product are the most dangerous.

Many pyramid schemes with no product sales operate under the guise of work-at-home business opportunities. Posting ads online and distributing flyers are examples.

Online Surveys

Online surveys usually are more an inefficient money-maker than out-and-out work at home scams. The pitch is that companies will pay you to participate in consumer research. But the amount paid per survey versus the time to find and complete surveys means you could make less than minimum wage. Check how much you must earn before a company will pay. A threshold of $50 may not seem too high when it promises hundreds of dollars, but in reality you may give up before you earn $50.
These companies make money by relentlessly pitching a range of products to their survey takers, who may feel the expected income justifies the expenditure. Also you must give out your phone, email and other information ensuring that you will be bombarded with spam.

Medical Billing

Ads offering turnkey medical billing businesses are usually misleading, if not downright false. The claim is that doctors will buy your services as a medical biller (even if you have no experience), and the company selling you the medical billing business will help you find clients. You must pay for the software, training and technical support.

However, according to the Federal Trade Commission, the reality is:

"Few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues - let alone recover their investment and earn a substantial income. Competition in the medical billing market is fierce and revolves around a number of large and well-established firms."

Mystery Shopping

While there really are mystery shopper jobs, there are also work at home scams trying to dupe those looking for mystery shopper jobs. Judy Hedding About.com's Guide to Phoenix, describes a fairly elaborate and costly mystery shopper scam, involving cashing a check and wiring the money. (Something you never should do!)
But some scams are simpler. They ask you to pay to be included on a list of mystery shoppers in your area. Turns out, though, there is no list. Or if there is, very few companies actually hire from it. You should not have to pay to be a mystery shopper. Keep in mind that real employers pay you--not the other way around.

Data Entry/Call Centers

Legitimate companies do hire work-at-home agents for call centers and data entry. However, like mystery shopping, work-at-home data entry and call center jobs can be a ploy for other work at home scams. Con artists use them as bait to find victims. Beware of "recruiters" you must pay to find one of these jobs. Also "business start-up kits" are often sold to those wanting to get into this line of work.

Do not pay anyone to get started as a work-at-home call center or data entry agent. For real jobs, see this list of companies that hire home-based workers.