Keep an Eye Out: How to Identify and Avoid Five Popular Work-From-Home Scams

If you're promised thousands of dollars every week with no experience necessary, it's probably a scam

Keep an Eye Out: How to Identify and Avoid Five Popular Work-From-Home Scams
Image: NCCC
February 6, 2017

Most people would jump at the chance to work from home. The temptation to save money and stay in pajamas all day is great, and it only becomes greater when the job promises to pay thousands of dollars every week even to those with little or no experience.

Sound too good to be true? It probably is.

If you see an offer like this, you should know about a few dead giveaways that it's a scam before you quit your regular job.

Scam artists often use phrases like "You have to spend money to make money" to take advantage of consumers. If you have to pay hundreds of dollars on a membership, certification, training, or equipment in order to work for a company, make sure that the company and the job are legitimate before you open your checkbook.

The first step is to search for company and position reviews from reputable sources like the Better Business Bureau and Glassdoor. Keep in mind that you can't trust every website you come across to provide an honest review. Sometimes the owners of those sites are affiliated with the company and receive part of the profit if their review leads you to buy into a scam. Unbiased sites and forums are better sources of reliable information.

In addition, there is no such thing as easy work. Jobs selling a lifestyle where you can earn a lot of money from very little effort should raise a red flag. Companies that sell only images of the life of luxury rather than tangible products or services should make you wonder where they get the revenue to run the business. Trust your instincts: if the set-up seem shady, it probably is.

Finally, you should be wary if any recruiter contacts you for information like your Social Security number or address to get you started in a program. There is nothing preventing them from using your information to steal your identity.

Five Popular Work-From-Home Scams

Below are five popular work-from-home scams that every consumer should know about. If you see one of these, stay away!

  1. Pyramid Schemes
  2. Pyramid schemes often seem like legitimate opportunities for entrepreneurs. They recruit people to sell products that have no value. They charge some kind of entrance fee for membership, training, or inventory, and this fee is redistributed as income for the people at the top of the pyramid.

    The number of people who actually make money from the schemes is tiny. Those who earn the most use groupthink and shady sales practices to convince the sellers on lower levels that they can make large amounts of money by recruiting others. In reality, however, these schemes are against the law, and very few people actually earn any money.

    Related to the pyramid scheme is multi-level marketing (MLM), which is legal. The difference is that MLM sellers receive commissions from selling real products, such as makeup or diet supplements.

    In addition, sellers also get a commission from the sales of the people whom they recruit. These jobs are not outright scams, but do not expect them to take the place of your full-time income. It is also possible that you will not make your money back if you have to buy the inventory that you're going to sell.

  3. Mystery Shopping and Survey-Taking
  4. There are legitimate mystery shopping and survey-taking opportunities. However, sometimes people find an angle on them that lets them scam people out of money. You can find these opportunities online for free, so you should not have to pay for access to them. If membership sites guarantee that you will make a full-time income from these opportunities, you should probably look elsewhere for work.

  5. Online Business
  6. Online businesses are popular right now. Successful owners of such ventures can earn incomes of over four of five figures every month using affiliate marketing and other products. Who wouldn't jump at such an opportunity?

    Like mystery shopping and survey-taking, some products for helping you launch an online business are worthwhile and others are not. Any system that promises fast results is unrealistic, especially if you have to buy into the scheme to find out how you will actually make the money.

    It is not possible to make money fast online (or anywhere else). The fact is that, even if you know someone who runs an online business successfully, he or she has probably been running that business for a long time. Again, look for unbiased reviews before you buy anything.

  7. Data Entry or Medical Billing
  8. Sites hosting work-from-home data entry scams will guarantee to get you hired and paid well by legitimate companies. You have to pay for membership with the site, and in return you will receive access to training, support, and exclusive job listings. You do not need any experience—only a computer and a wireless connection.

    If you see a site like this, stop and think about it from the point of view of a company hiring a remote worker. If you ran such a company, would you work with a site including a pool of inexperienced workers? If you did, how much would you be willing to pay those workers? Probably very little.

    Instead of partnering with companies, such sites simply post jobs and other resources that you could find online yourself with some digging.

    Medical billing is another popular work-from-home scam. These ask you to invest in your own equipment, training, and industry connections in order to launch your own billing business, but as with the other schemes, it is hard to earn your money back.

  9. Stuffing Envelopes and Assembling Crafts
  10. The envelope scam has been around for a long time. These ads claim to pay consumers hundreds of dollars every day for stuffing envelopes at home. To sign up, you have to provide personal information. If this were a legitimate opportunity, the company's budget for envelope-stuffing would be massive. These scammers have an ulterior motive in getting you to sign up.

    There is a similar scam in which a company sends consumers craft parts and pays them to assemble the crafts. Don't fall for this one either. Real companies have more efficient methods to assemble products than sending parts to remote workers.

If you're tempted to despair of finding real work-from-home jobs after reading about these scams, don't worry! There are legitimate opportunities that will allow you to make money from home; it just isn't easy to do it. Companies paying remote workers good money want people who have experience and skills. Unless you launch your own business, you have to qualify and apply for full-time remote work just like you would for any other job.

It can be tempting to try to find a shortcut to earn lots of money with little effort. However, if you see an opportunity promising this, remember that it is most likely a scam.