Con artists are taking advantage of America’s high unemployment rate by cashing in on “work from home job” scams: The number of complaints filed with the FTC about such opportunities since before the recession has nearly doubled, from 4,004 in 2004 to 7,955 in 2009. While there are many legitimate work-from-home opportunities as well, it’s important to keep a skeptical eye when considering an online job opportunity.
Here are five warning signs to help you steer clear of fraudulent businesses:
- The company creates fake news stories to promote its work opportunities. You’ve probably seen those “Stay-at-Home Mom Makes $97/Hr” ads. Click on the link, and it takes you to what at first looks like a news article on CNN.com or another reputable source. But when you closely examine the URL, you’ll see there’s no association with a news organization at all. These fake articles are bait to lure readers to a “fabulous opportunity.” Beware of any site that uses dubious means like this to attract your attention.
- The company makes you pay to get involved. Some legitimate direct-sales companies ask reps to pay initiation and inventory fees, but in most cases, if a company asks you to pay big bucks for a training kit or access to a secret website, you’re getting ripped off. Don’t hand over any credit card or bank information until you’re positive that the company is legitimate.
- The company gets bad ratings and reviews. So, how can you tell if a company is legit? First, check with the Better Business Bureau in the state where the business is based: Its listing will tell you how many complaints it’s received and whether they were resolved. It may also provide a rating between A and F. Online forums such as RipoffReport.com and ComplaintsBoard.com can also give you an idea of whether other people feel wronged by a company.
- The opportunity is a pyramid scheme. Watch out for business opportunities where you pay a fee upfront and then are expected to make most of your money by recruiting more people to do exactly what you’re doing (rather than selling products). Unless you’re at the top of the pyramid, you’re likely to lose your investment, because the sales model quickly becomes unsustainable. Check out Pyramid Scheme Alert for details of recent incidents and tips on telling the difference between legitimate direct-sales companies and multilevel marketing scams.
- The job prospect sounds too good to be true. Most of the time, all it takes to suss out a work-from-home scam is a little bit of common sense. Is a recruiter telling you that you can make $100 an hour or more by sending out links, filling out surveys, or doing another task that requires no expertise? Before getting blindsided by all of those dollar signs, do some research. Ask for references, so you can find out if anyone’s really making as much as the company claims. Chances are, many people who’ve seized an opportunity are making less than minimum wage (or are actually losing money).