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Work from Home Scam Advice

...Home opportunity scheme warning

"Sign up for the Fastest way to make money online!"

"Earn thousands a month - from the comfort of your home"

Ads like this are everywhere -all over the web. You probably came across many on your way to Workwhistle. These ads can be appealing, especially if you can't work outside your home, however you should proceed with caution. The 'work from home' industry is beset with fraudsters and many cannot deliver on their promises.

The likelihood is that you may have to work many hours without pay, or that most of the costs will have to be paid up front. Countless work-at-home schemes require you to spend your own money to place newspaper ads; make photocopies; or buy the envelopes, paper, stamps, and other supplies or equipment you need to do the job. The companies sponsoring the ads also may demand that you pay for instructions or "tutorials". The FTC reports that consumers deceived by these ads have lost thousands of dollars, in addition to their time and energy.

Workwhistle would recommend never parting with any money at all as you seek to work from home. How many times have you have to pay to go to an interview? When you have accepted an office job in the past, have they charged you to turn up on the first day? No.

Classic Work-at-Home 'Schemes'

Several types of offers are classic work-at-home scam schemes.

Medical billing. Ads for pre-packaged businesses - known as billing centers - are in newspapers, on television and on the Internet. If you respond, you'll get a sales pitch that may sound something like this: There's "a crisis" in the health care system, due partly to the overwhelming task of processing paper claims. The solution is electronic claim processing. Because only a small percentage of claims are transmitted electronically, the market for billing centers is wide open.

The promoter also may tell you that many doctors who process claims electronically want to "outsource" or contract out their billing services to save money. Promoters will promise that you can earn a substantial income working full or part time, providing services like billing, accounts receivable, electronic insurance claim processing and practice management to doctors and dentists. They also may assure you that no experience is required, that they will provide clients eager to buy your services or that their qualified salespeople will find clients for you.

The reality: you will have to sell. These promoters rarely provide experienced sales staff or contacts within the medical community.

The promoter will follow up by sending you materials that typically include a brochure, application, sample diskettes, a contract (licensing agreement), disclosure document, and in some cases, testimonial letters, videocassettes and reference lists. For your investment of $2,000 to $8,000, a promoter will promise software, training and technical support. And the company will encourage you to call its references. Make sure you get many names from which to chose. If only one or two names are given, they may be "shills" - people hired to give favorable testimonials. It's best to interview people in person, preferably where the business operates, to reduce your risk of being mislead by shills and also to get a better sense of how the business works.

Few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues - let alone recover their investment and earn a substantial income. Competition in the medical billing market is fierce and revolves around a number of large and well-established firms.

Envelope stuffing. Promoters usually advertise that, for a "small" fee, they will tell you how to earn money stuffing envelopes at home. Later - when it's too late - you find out that the promoter never had any employment to offer. Instead, for your fee, you're likely to get a letter telling you to place the same "envelope-stuffing" ad in newspapers or magazines, or to send the ad to friends and relatives. The only way you'll earn money is if people respond to your work-at-home ad.

Assembly or craft work. These programs often require you to invest hundreds of dollars in equipment or supplies. Or they require you to spend many hours producing goods for a company that has promised to buy them. For example, you might have to buy a sewing or sign-making machine from the company, or materials to make items like aprons, baby shoes or plastic signs. However, after you've purchased the supplies or equipment and performed the work, fraudulent operators don't pay you. In fact, many consumers have had companies refuse to pay for their work because it didn't meet "quality standards."

Unfortunately, no work is ever "up to standard," leaving workers with relatively expensive equipment and supplies - and no income. To sell their goods, these workers must find their own customers.

Business Opportunities. You send money for information about starting a business from your home. The details are vague but the promises are big and include claims that “we will provide all the training you need.” The catch? The fraudulent salespersons will constantly try to sell you more information about special “training and support systems” and “your personal coach.” Anyone who really had business ideas as good as these claim to be would never offer this information to thousands of strangers.

Questions to Ask

Legitimate work-at-home program sponsors should be happy to tell you -in writing as well as on the phone - what's involved in the program they are selling. Here are some questions you might ask a promoter:

  • What tasks will I have to perform? (Ask the program sponsor to list every step of the job)
  • Will I be paid a salary or will my pay be based on commission?
  • Who will pay me?
  • When will I get my first paycheck?
  • What is the total cost of the work-at-home program, including supplies, equipment and membership fees? What will I get for my money?

The answers to these questions may help you determine whether a work-at-home program is appropriate for your circumstances, and whether it is legitimate.

You also might want to check out the company with your local consumer protection agency, state Attorney General and the Better Business Bureau, not only where the company is located, but also where you live. These organizations can tell you whether they have received complaints about the work-at-home program that interests you. But be wary: the absence of complaints doesn't necessarily mean the company is legitimate. Unscrupulous companies may settle complaints, change their names or move to avoid detection.

Where to Complain

If you get in contact with a potential employer via Workwhistle and it appears to be a scheme/scam please let us know immediately at scamalert@workwhistle.com and we will remove them instantly from our database until we determine whether it is a genuine scam.

If you have spent money and time on a work-at-home program and now believe the program may not be legitimate, contact the company and ask for a refund. Let company representatives know that you plan to notify officials about your experience. If you can't resolve the dispute with the company, file a complaint with these organizations:

U.S. Postal Inspection Service
The Postal Service advises that you report work-at-home scams to your local postmaster or nearest Postal Inspector.

National Fraud Information Center
The NFIC shares complaints with law enforcement offices across the country to help identify patterns of criminal activity leading to criminal prosecutions.

Federal Trade Commission
While the FTC does not resolve individual consumer problems, your complaint helps the FTC investigate fraud. The FTC enters fraud-related complaints into Consumer SentinelĀ®, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

Additional Resources

Better Business Bureau
The BBB explains how exaggerated work-at-home schemes waste your time and money and ruin your reputation.

“Franchise or Business Opportunities”
Is a franchise for you? The Federal Trade Commission talks about these business opportunities.

“Could 'Biz Opp' Offers Be Out For Your Coffers”
Get earnings claims in writing and make sure there is really a market in your community.

National Fraud Information Center
The more a promoter says the scheme is “easy” or “legal,” the more likely it is a scam.

About this article

This article is based on content and guidelines published by the FTC, the full text of which can be found here. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

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