How to Avoid Getting Ripped Off by a Work-at-Home Scam

by James on April 14, 2016 · 0 comments


Working from the comfort of home comes with certain advantages that you don’t always get with a traditional 9 to 5 job. Not only do you have the ability to set your own working hours and develop new skills but you also have greater control over how much or how little you earn.

One of the biggest obstacles associated with working from home is finding legitimate opportunities to generate extra income. Work-at-home scams abound and as you explore different money-making avenues, know how to spot the warning signs. Here are three common scam scenarios that you should avoid at all costs.

Scam alert #1: Promise of big rewards for little effort

When it comes to work-at-home opportunities, don’t be lured in by promises of easy cash. A quick Internet search will turn up dozens of work-at-home job listings offering hundreds of dollars a day for minimal work. How realistic is that? Don’t fall for it. A consistent income stream from home is certainly doable but it can take months or even years to make it happen.

Read the job description carefully. If it claims that you don’t need any specific experience or skills to make $500 a day, ask yourself whether you’d pay an unskilled worker that much if you owned the business. If the answer is no, that’s a major clue that the promise is too good to be true.

Scam alert #2: Personal information required up front

Exercise extreme caution when it comes to sharing your personal information. If you respond to an advertisement for a work-at-home position and the company immediately asks for your Social Security number, date of birth or bank account information without offering any further details about the job, it’s a clear red flag that something’s not right.

With some work-at-home scams, requests for information may be more subtle. If you’ve handed over your personal details to what seems like a reputable company, keep a close eye on your credit history for signs of potential fraud. Credit Sesame offers access to your free credit report and score, which can come in handy if you’re worried about your information being compromised by a work-at-home scam.

Scam alert #3: Companies that charge a fee or try to sell you something

While some work-at-home scams exist just to gain access to your financial information, others try to lay claim to your money in a more direct way. This might take the form of an upfront fee or a service charge for a product, such as computer software or equipment that you’ll need to get started.

One common tactic is to charge you a fee to gain access to an exclusive client list. The premise is that once you have this list, you can build your client base and start making real money from home. The problem is that the list may be outdated or, in the worst-case scenario, completely made up. By the time you realize you’ve been duped, the company you paid the fee to has disappeared.

Another common scenario involves assembling a product for sale. You’re expected to pay for the materials up front and recoup the cost once you sell the finished product. Again, what often happens is you pay the fee and the materials never show up. Alternately, you do the work and when you try to contact the company about selling the items you’ve made, they claim your work is not up to standards, or you get no response at all.

What to do before committing to a work-at-home opportunity

Aside from being aware of red flags, do your homework on any company you consider working with. If you find a work-at-home job you’re interested in or you’re approached by a company directly, here are the most important questions to ask before taking the leap:

  • What is the job title?
  • What tasks does the job involve?
  • How will I be paid? (I.e., hourly, per-task, salary, commission, etc.)
  • What payment method do you use?
  • What is your schedule for payments? (Weekly, biweekly, monthly)
  • What costs, if any, am I responsible for?
  • What do your current workers typically earn?
  • How many hours are they required to work to earn that amount?

Finally, check the company’s reputation online. Start with the Better Business Bureau to see if they’re listed, what their rating is and whether any complaints have been filed against them. Search review sites like Glassdoor to look for negative reviews from people who’ve worked with the company in the past.

You can also check with your state Attorney General’s office to see if any lawsuits or consumer complaints have been recorded in connection with the company. This research may take time but can be well worth your efforts it if it allows you to avoid losing money to a work-at-home scammer.

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