Too-Good-To-Be-True Work From Home Offers? Be Sure to Investigate First

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By Consumers Union on Friday, January 24th, 2014

Be warned: those advertisements offering cash for easy, at-home work may not live up to their promises.

Many Americans – including retirees, caretakers, and others – are seeking to make some extra money while enjoying the flexibility of working from home. But too often, they are taken advantage of by fraudsters. Common pitches include offers to perform medical billing or Internet searches on your own computer.

Most of these offers don’t pan out. According to the California Attorney General’s office, “Home employment schemes are one of the oldest and most widespread kinds of consumer fraud.” Sadly, it is often those least able to afford to lose money that are targets of these schemes. As our friends at the Consumerist point out, service members and their families are particularly vulnerable.

The Federal Trade Commission (FTC) has cracked down on a number of work-from-home scams. This month, the FTC took on a particularly egregious “telemarketing resale scam.” It sued Cream Group, Inc. for promising to sell consumers high quality products for low prices that they could resell to others for more money. Instead, the company mailed them cheap, worthless goods — scamming those who had paid for the cash-on-demand delivery out of their hard-earned money.

Other work-from-home scams can cost consumers big bucks. Daniel from Lynchburg, Virginia told us that he lost thousands of dollars for his participation in an online sales scam:

“[I was] looking for a way to make money online, shortly after retirement. I did many hours of research and it led me to a [company whose advertising promised to help me make money on my home business]. It sounded great! Setting up a website, showing how to make money selling [online]… Having actors do a commercial for you, doing the work for you so that your website would be at the top of the charts when searching. The truth is that my website . . . is nowhere near the top of anyone’s search list. . . . Still haven’t made a penny. I’m out approximately $27K.” 

Daniel is not alone in losing money to work-from-home scammers. One company that the FTC went after in 2013 had fleeced consumers with at-home businesses out of more than $200 million by selling them overpriced, mostly worthless services, like business counseling.

The upshot for consumers is to beware. Before you send any money or information to a potential work-from-home employer, make sure to investigate the offer thoroughly. Businesses must release a single sheet to consumers that explains how much the consumer can expect to earn from this opportunity (along with verifying evidence), whether they’ve had any legal trouble, and whether you can get your money back, among other helpful disclosures.

The FTC also has some great advice on the steps you can take to make sure that Internet work-from-home or similar offers are legitimate, such as speaking to fellow job-seekers who have worked with the company before, or discussing the matter with an attorney or another person who can offer knowledgeable business guidance.

And to help stop scammers, please report work-from-home fraudsters to the FTC at ftc.gov, or over the phone at 1-877-FTC-HELP.

Have you been scammed? Please share your story!

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