“knows of no work-at-home promotion that ever produces income as ‘alleged.’”
Multilevel marketing. Such companies ask you not only to sell their wares but also to find other sellers. This can be a legitimate form of business — take for example the pink Cadillac-driving Mary Kay reps. On the other hand, illegitimate pyramid schemes can resemble legit sales operations. An obvious difference is that the emphasis is on recruiting others to join the program instead of selling the product. Unless you find others to join, you’ll wind up warehousing overpriced merchandise.
Online business. Here, you pay for a useless guide to work-at-home jobs — a mixture of computer-related work such as word processing or data entry, and envelope stuffing or home crafts scams. If you get a computer disk, it’s probably a worthless list of free government Websites and business opportunities that require more money.
Sheila Adkins, associate director of public affairs for the Arlington, Virginia-based Council of Better Business Bureaus, says the Internet is increasing exposure to all types of scams. “We see the same things as before but they’re reaching more people over the Internet. If you’re looking for a possible business opportunity, don’t be fooled by fancy graphics on a Website.”
Online bulletin board ads may be disguised as casual conversations, warns J. Steven Niznik, a technical guide at www.about.com. “It may appear that a few people just got together to discuss the ‘wonderful opportunity’ they’ve found,” he says. “Sometimes the people p
osting the inquiries are nothing more than ropers (there to rope you in) in cahoots with the scammers.”
Online or off, certain features are common in these rip-off schemes. “Be cautious of ads that incorporate eye-catching words and phrases such as ‘free,’ ‘no work,’ ‘no special skills required,’ and ‘get out of bed when you want to,’” says Niznik. “What type of business truly gives away anything for free or hires lazy, no-account, unskilled employees?”
But the biggest clue that a work-at-home offer is a scam is when a company requests your dollars. “Legitimate employers don’t charge you to work for them, period,” says Niznik. “To avoid falling victim, never pay up-front fees or do business with companies that operate exclusively by phone, mail, or e-mail.”
Similarly, Mora advises would-be investors to watch out for promises of earning large amounts of money in a short time with little effort. Most solid investments, from securities to franchises, provide prospectuses and allow you to engage in substantial due diligence. Don’t even think about putting a single cent into a prospective venture unless a company provides you with adequate information. “In some types of offerings,” says Mora, “earnings claims must be disclosed. Prospective investors must be told how many others have made money. Even if such disclosure is not required by law, you should ask for it. A sponsor’s failure to provide it may be a good tip-off that you’re dealing with a scam.”
Make sure you get references as well as check with organizations such as the Better Business Bureau. “Do your own homework to