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Be Wary of Work-At-Home and Other Business Opportunities

This pitch may sound familiar: Need to make extra money? Find it difficult to pay your bills? Were you laid off or fired? Be your own Boss with (insert supposedly great company here). Message me to achieve financial independence!

It is important to beware of scams in both times of happiness and success as well as in times of sadness and difficulty. Right now scams like this “Be your own boss opportunity” are among the most successful ones for shameless and clever scammers. People who are struggling financially are most susceptible to pitches that have to do with jobs and business opportunities.

Work-at-home opportunities are being promoted by scam artists now more than ever. There are all kinds of home-based businesses, including ones that are set up to fail. The key is that if the job seeker has to pay to get access to the job opportunity, it is likely they will spend more than they can earn.

Those searching for ways to make ends meet should steer clear of any company or person claiming to offer a “guaranteed” job placement or “risk-free” business opportunity. Often the reality of these scams is 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. Many work-at-home offers just don’t deliver on their promises. The ads don’t warn 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 won’t. People tricked by work-at-home ads have lost thousands of dollars, not to mention time and energy.

How to Know If It’s a Scam

The Federal Trade Commission offers this advice:

Promises of a big income working from home, especially when the “opportunity” involves an up-front fee or requires that you give 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 are 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:

  1. What tasks will I have to perform? Are any other steps involved?
  2. Will I be paid a salary, or will I be paid on commission?
  3. 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.
  4. Who will pay me?
  5. When will I get my first paycheck?
  6. 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 the S.C. Department of Consumer Affairs, the S.C. Attorney General, and even the Better Business Bureau. Check not only where the company is located, but also where you live. These organizations can tell you whether there are complaints about a particular work-at-home program. But remember: just because there are no complaints, this does not mean the company is legitimate. Dishonest companies sometimes settle complaints and change their names or move to avoid detection.

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