Top 15 Work at Home Scams: Spot, Avoid and Report Online Frauds

How can you tell whether a work from home job posting is a scam or a legitimate job opportunity?…

That is one of the most common questions I see being asked on forums and blogs related to home bases business, paid surveys, and making money online in general.

So, I put together this resource to help you spot, avoid, and report such scams.

In this post you are going to learn about the most common online work at home scams, red flags you should be watching for, protecting yourself, and reporting such scams.

Work at home scams have been around around for a long time, unfortunately. Since the beginning days of the DotCom boom, scammers have been trying to make money by victimizing unsuspecting people.

The following is a list of 15 of the most famous (yet, somehow people still fall for these) scams related to online jobs:

 

1. E-Commerce Con

Earning money probably cannot sound simpler than this: Just pay a one-time amount upfront (say around a thousand dollars) to get someone to develop and host a fully functioning website that has many household products for sale, ranging from toilet paper to toothpaste.

Every time an item is bought by someone, a cut of the money in this transaction comes your way. The only thing you must do is goad people into buying stuff from there. All the remaining part, like stocking the inventory or product shipping is taken care of by someone else. Or, the so called other person actually runs off with your money leaving you in the lurch quite terribly.

 

2. Letter From Nigeria

Also known as the 419 scam (the number referring to the Nigerian Criminal Code article that covers fraud), this scam has become quite notorious. It also comes in many different forms.

The most common one however goes like this: An email from a person calling himself a senior and reputed civil servant in the Nigerian (or any other African nation) government arrives stating that he/she is searching for a reputed foreigner for the safekeeping of a deposit worth $60 million as he/she copes with the dangerous political situation in that country.

In exchange for safeguarding this money, the sender of email promises a 30% share of the same after – as one email described it – “documentations are concluded over here”. These crook emails leave no stone unturned when it comes to ensuring their authenticity with some even possessing the Nigerian governments’ official seal!

And yes, you need to come up with a deposit in order to partner up in this business venture. Later the time will arrive when this Nigerian friend finds himself mired in troubles, which is when the request for additional money is sent to you (didn’t the email earlier claim that the person had $60 million in the first place!).

Some other emails might talk of how you stand to inherit a large amount of wealth from a businessman or diplomat who had recently deceased.

Yet another variant of these emails might promise you an attractive fee on distributing to various charities a huge stash of money.

 

3. Pyramid Schemes

These schemes have existed for decades and show no signs of slowing down. This is how a typical pyramid scheme works: a buyer (already part of the scheme) buys the rights of selling the scheme to other people.

The person who sold this buyer the scheme earlier takes a slice of all sales that he and his other buyers muster. This means that those higher in the pyramid hierarchy earn more money than the rest.

Sooner than later, everyone realizes that the basic scheme being pushed is of zero worth.

What happens next? Well, the entire pyramid collapses and takes with it the newest recruits at its base.

 

4. Assembly Work

Surely you must have come across this advertisement, “Make money by assembling craft products from the comforts of home. Zero experience required.”

Scams like these typically need you to pay up an initial deposit to fund a kit containing “high-quality” materials. Teresa Yeast paid $500 to Darling Angel Pin Creations, which was a company that promised huge earnings every week by creating angel pins.

This so-called company ran its operations for close to six years till 2009, when it finally faced a lawsuit from the FTC.

 

5. Faux Data Entry

Scammers here start off by offering you a chance to get in touch with a number of companies intending to outsource basic office tasks like filling out electronic forms by typing 3-4 lines repeatedly for some kind of ad campaign.

Where’s the catch?…

Well, most of the naive people who end up paying an access fee to the tune of $100 (or more) never receive any typing work at all. Yet another version of this scam is where people are asked to pay a fee to be able to take surveys in exchange for cash rewards and it’s only later when they realize that they are misfits in the rigid demographic requirements for the survey.

 

6. Envelope Stuffing

A classic, if you can call it that, when it comes to “Work-at-home” scams; this scam has existed in the United States since the time of the depression in the 1920s and the 1930s. With the internet’s arrival, it moved on to this medium as well.

Interested people pay a small startup fee to be able to earn an outrageous $1-$10 for stuffing every envelope. It’s only later when the envelopes make a no-show that people realize how badly they’ve been stuffed.

 

7. Dial-A-Crook

1-900 numbers have a variety of fans apart from the usual lonely hearts. Scammers make use of these numbers to advertise fake work-at-home plans: You call up a 1-900 number to know more about a particular plan. While waiting on the phone, you are charged an outrageous amount, which the scammer shares with the unaware phone company.

Bust the fraud and within no time, just like Whack-a-Mole, the scammer comes up with a different alias and of course, a different number.

 

8. Driver Wanted

Recently seen on Craigslist, this scam comes in many flavors. In one example, you are asked by a guy to drive around his wife since she is visiting and is new to the area.

That might seem quite easy but the tricky part is when it comes to the payment terms. You are assured of receiving a check (or “money gram”) worth $2,500 via mail.

You are required to deposit the same, withdraw the cash immediately, $700 of which includes your fees plus other miscellaneous expenses. The remaining amount is to be sent back to the scammer via mail. It’ll probably be a couple of days before your bank realizes that the check you deposited is a fake!

 

9. Check Cashing

This one is also known as a “money-mule” scheme. Here’s the gist of it: Scammers hire American agents – tagged as “sales managers” or “financial managers” – to withdraw cash from fake checks (or stolen fund deposits) in exchange for a minor but fixed commission. This withdrawn money is then wired overseas, where often it’s done so to the scammer’s account.

When the bank does realize about the check’s counterfeit nature (around 2-5 days afterwards), the actual transaction is already done but the intermediary finds himself left to face the consequences.

 

10. Medical Billing

A majority of work-from-home scams claim weekly earnings stretching into thousands of dollars. In this case, you are promised such unrealistic amounts to process insurance claims on behalf of doctors as they are too caught up with their work to take care of the paperwork.

At the beginning, you’ll receive some initial marketing material, one training session, software and info about local doctors through a “lead” list. Of course, all this in return for of an amount as fee. The sad part is that the same software could be bought for a much lower rate at Best Buy.

As for the training sessions, you are made to wait forever for them to commence and as for the lead list, it’s nothing but hot air as no one requires the service you offer.

 

11. Contract Typist

Making thousands of dollars simply from typing that everyone can do – or it’s rather what the ad would have you and everyone else believe.

Similar to the medical billing fraud, eager typists tend to pay up money in return for a lead list, which usually contains names cherry-picked from local Yellow Pages. You got to give it to these scammers for thinking of such ways!

 

12. Name Compiling

Once you register by paying up a $30 fee, you can earn 50 cents every time you provide someone with a name and address. Victims of this scam sweat it out collecting names and addresses of as many people as possible including family and friends, hoping to recover the registration fees on the first day itself.

So, what exactly does the scammer do with the new addresses?…

He sends out the same offers to them. When the scam is finally exposed all the victim is left with is dirty hands.

 

13. Rebate Processing

“Companies are eagerly looking for people who can process their rebates. You can earn $1,000/week by doing it for them!” This is exactly the tactic used by one scammer as he went about looting thousands of dollars by offering training kits to learn rebate processing on products with a database that lists companies requiring the said service.

Penbrook Productions assured instant employment and required you to pay $197 as fee for training to help you achieve the expertise of a “certified” processor of rebates. Most who paid up didn’t receive the kits. People who did receive the kits found out that they were just being informed on the process of offering rebates to other consumers.

Consequently, the FTC was flooded with complaints, which then filed a lawsuit against Penbrook. The dubious company shut down in 2010.

 

14. Mystery Shopping

With this fraud, an entity with an official looking name, like the Mystery Shopping Club of America, assures assignments to up and coming marketing researchers.

Where is the money here?…

Simply go about buying anonymously at different stores and pore over your experience. All this, however, only when you pay up a “registration fee” to go through or apply for the assignments stored in its database.

A legit offer never requires you to pay or possess a “certification” in order to look for companies needing mystery shoppers. College students are the usual victims of this scam.

 

15. Pre-screened List of Jobs

You can call this the most heartless of all scams. Consumers are required to pay a certain amount to sign-up with a business, which offers access to a list of pre-screened listings promising “legitimate” opportunities for work-at-home such as paid surveys.

Ads from these scammers usually tend to pop up when in the middle an online search with cheesy titles like “scam free jobs at home”.

These scammers even assure people of a refund in case of those failing to get a job. Once a victim pays up the money, his/her account is locked out summarily and they end up never getting even one job opportunity.

 

Work at Home Scams Red Flags

Hearing about people being scammed and losing money through work-at-home schemes is getting all too usual these days. Some types of these scams, like package forwarding, even drag the victim in violation of federal crimes like identity theft and possession of stolen merchandise.

Here are some signs that can foretell if an earning opportunity could turn out a scam:

 

Big money for simple tasks/jobs
“Earn $5,000 per week through part time working!”. Over the top claims like these are surefire signs of a scam waiting to happen.

Strangers coming up with job opportunities out of thin air
If you are offered a job without getting interviewed for it, or met someone for it, or even without applying for it, chances are high that it will be a scam.

Safeguard your vital persona info from such people (especially details like your SSN). Not doing so would likely lead to something like an identity theft.

Upfront payment requests
The red flag should be raised if someone asks you to pay upfront in order to sign-in with a new business. This is more so if the amount involved is quite huge and if you do not possess enough information on the business’ inner workings. In short, stay away.

Scams where payment of an “advance fee” was demanded are way too common and come in tons of varieties.

You are asked to wire the payment
When you pay somebody through wire transfer, the process is irreversible. Transferring money through wire is also perfectly legal and immensely convenient.

People intending to scam often use this route (with the money being wired to an overseas destination) to ask for payments from you. This is because they know that once you do the transfer, there are no chances of you getting it back.

Being pressured to make a payment immediately
When you are persuaded to accept any unsolicited work offers or asked to make investments in any business and are being pressured to do so immediately, it is time to step back.

Assess the situation thoroughly before committing and if someone plays the “limited time/offer” card, ask them to take their offer elsewhere. In short, ignore people who pressurize you into agreeing as this is a huge sign that something’s amiss.

Refusal to provide all details in writing
Stress on all information being provided to you in writing. You should also push for proof regarding any claim you hear.

Sift through all the documentations you are provided and see if they answer your questions. If the said party is withholding details and avoid questions, disassociate with them.

References are lacking or not trustworthy
A legitimate business should not flounder when asked for references. It should also be able to provide with many instead of just a handful. Request for references and make sure to verify them on your own.

Don’t be influenced by wonderfully written testimonials. However, don’t base your eventual decision on references alone. They are just the first step following which, a thorough background check is recommended.

How to go about performing such a check?… Start off by searching the company name on the web.

Contact information provided is incomplete or insensible
You need to be extremely wary of companies trying to goad you into joining them or enrolling with any of their programs but not providing enough by way of useful and accessible contact information.

Don’t be satisfied with a phone number and website alone as any sensible and realistic business will have a physical presence; even if it’s a one room facility. A street address is the bare minimum and no, P.O. Box address will not do as they are most preferred by scammers.

If you do have a physical address, take it upon yourself to verify its authenticity by searching online. There are a number of tools today like Google’s Street View pictures of myriad address locations and “who is” website owner look-ups. These are bound to be resourceful in your pursuit.

You are asked to pay for some expensive stuff
Your sixth sense should be alarmed if you are asked to pay for any expensive stuff like equipment, inventory, software or even information to help the business get started.

These often turn out to be the most persuasive of business opportunities. They might appear real but they certainly are not. Most often, people realize the scam when they do not receive the stuff for which they paid. The best way to avoid such a situation is to completely verify the company and its business model.

Mansions, Beaches, Palm Trees & Bikinis
If the ad that has your attention includes any of the above terms, it ought to be a scam. People successful at scamming use such attractive stuff as bait to lure people.

This is very much in the mold of kidnappers promising you children a candy bar if they got into their cars.

You encounter the ad in your mail’s spam box
That miracles happen is a known fact. However, how could a man sitting in faraway Romania possibly know about your search for a work-at-home business opportunity?

He still might, but if his communication to you is regarded SPAM, you better steer clear.

Most often, scammers “harvest” email IDs of people seeking job opportunities at other sites. You should immediately trash such mails without going through the “Remove me from this list” link included in such emails at the bottom.

The real purpose of these links is to confirm the active nature of your email ID and once you click them, there is a danger of more SPAM.

 

Websites & Resources to Help You Guard Yourself Against Scammers

In order to protect yourself against scammers, you need to research. When you come across a new work at home opportunity, be sure to use the following websites to get a sense of what the company is all about and whether or not anyone else has any experience with them.

 

• RipOffReport.com
  Unlike the BBB, doesn’t hide away reports of complaints that have been ‘solved’. EVERY complaint remains in public so as to encourage a working history of the said individual or company; without any edits at all.
• ScamBusters.org
  Here you will encounter a ton of resources on how you can avoid falling prey to popular scams, urban legends and viruses.
• WebAssured.com
  The Seal of Assurance from this website enables ALL reliable websites to compete with each other on a similar playing field. This completely negates the popularity of a site or its brand recognition. This Seal also helps people as they buy online and also encourages reliable sellers on the web.
• Scam.com
  Head over to this site’s “Work From Home” section to read about the views of other people regarding the many home-based earning opportunities.
• Fraud.org (National Fraud Information Center/Internet Fraud Watch)
  Here consumers can find information that will help them avoid falling victims to internet and telemarketing frauds. The site also assists affected people by getting law agencies to file complaints in a quicker and easier manner.
• FTC.org (Federal Trade Commission)
  FTC influences almost all issues that concern the financial lives of American residents. In fact, the agency has often come good on its reputation of ensuring a competitive and fair marketplace for businesses as well as consumers over the years. When established in 1914, the FTC’s main aim was to root out the unfair methods and practices of competition carried out in commerce, which was a wider part of the movement to “bust the trusts”. Since then, Congress has only the organization tougher and more powerful through the enactment and passing or a number of vital legislations.

 

How to Report a Home Based Business Scam?

All victims must report a scam as otherwise, chances of getting any sort of justice are very low. Although there is no assurance of the scammer you reported getting caught and punished, reporting can still help in different ways.

Here are additional resources that enable you to report scams:

 

• State Attorney General Offices
  Get in touch with your state’s attorney general and report the scam that duped you. Make sure you also do this with the attorney general of the state to which your scammer belongs, provided you know this information.
• File a Complaint with the Better Business Bureau
  Although it’s not the most perfect tool out there, checking through the BBB can warn you if there’s something really suspicious about a site. You can also approach the BBB if you encounter a problem.
• File a Complaint with the FTC
  Go to this link and provide answers to the given questions in order to file your complaint. This will officially report the scam to the Federal Trade Commission.
• eConsumer.gov
  This is a site containing information on agencies of other countries similar to the FTC.
• File a Report with the Internet Crime Complaint Center
  You can also report any Internet related crime to The Internet Crime Complaint Center (IC3). This program is basically a partnership between the FBI, the Bureau of Justice Assistance (BJA) and the National White Collar Crime Center (NW3C).
• Report to Google
  Help save thousands of others from being scammed by the same site by reporting the site to Google. Google will block this site from showing up in their search results and since Google is the biggest search engine, blocking the site on Google will almost block them from the whole internet.

 

Conclusion

Now, I want to make sure we are clear on one thing, just because there are so many home based business related scams, it doesn’t mean every single work at home opportunity you come across is going to be another scam. There are tons of legitimate online jobs out there. You just have to be smart about it and know how to separate the two.

Remember, the easiest way to protect yourself against a work at home scam is to research and be realistic. If you come across opportunity that sounds too good to be true, don’t jump right in, take your time, read some related forums, ask other people, check out work at home blogs, do whatever is necessary to learn as much as you can before making any decision.

Also, please do share this post with your friends and family. The more people know about these things, the less people will be victimized by these work at home scams.