The prospect of making money from the comfort of one’s home has always been enticing. For unemployed Mainers unable to find jobs, the offers may seem too good to be true.
As you’ve probably guessed, they usually are.
The Federal Trade Commission received 8,192 complaints about work-at-home schemes in 2010. The FTC estimates that only one in 55 such offers are legitimate. Thousands of people we know about — and many we don’t — fall for a variety of scams and lose hundreds or thousands of dollars in the process.
Often the people who concoct the schemes ask for payment by credit card. Once you’ve agreed, the thieves give you the runaround after accepting your payment; by the time you’ve figured out it’s a scam, it’s too late to dispute the charges.
The double whammy of this kind of theft is that it’s often perpetrated against those who can least afford the loss. People who are struggling to make ends meet don’t have the funds to hire an attorney to try to recoup their losses, so many simply give up.
How do you prevent being scammed by bogus work-at-home offers? The FTC suggests you find out what tasks you’ll have to perform and determine if there’s a real demand for such work. Ask whether you’ll be paid a salary or on commission, who will pay you and when you can expect your first paycheck.
Ask how the promoter justifies claims about your likely earnings, and ask to see documentation of the claims. And ask about the total cost of the work-at-home plan, including supplies, equipment and any membership fees involved. Be skeptical if there’s a “money back if not satisfied” guarantee or if a certain level of income is “a sure thing.”
After quizzing the promoter, do additional research. If you can find others who have tried it, ask them about their experience. Check the FTC website ( www.ftc.gov) to see if the promoter has run afoul of federal regulators.
You should also check with the Maine State Office of Securities ( www.investors.maine.gov), which enforces the Sale of Business Opportunities law. This law applies to any offer with total costs of $250 or more. It requires that sellers of such offers register with the office and disclose certain important information in writing at least three days before you sign any agreement or pay anything related to the deal.
In most cases sellers must post a bond or set up an escrow account to give buyers some protection in case of problems. The law does not determine whether a particular business offer is worth pursuing.
People offering legitimate work-at-home scenarios will comply with the law. Those who don’t will likely pressure you for a quick decision and demand whatever payment they can get from you right away. Be especially wary of promises of “easy money in just a few hours” (if it’s so easy, why isn’t the promoter making all that cash?).
Specific types of home jobs to avoid include assembly or craft work (your work never meets standards); stuffing envelopes (a Ponzi scheme); rebate processing (there are no rebates to process); online searches (simply a scam); and medical billing (there are few jobs that are not already filled).
You can complain about abuses to the Federal Trade Commission and the Maine Attorney General’s office. If you received a mail offer, your postal inspector may be interested. If a print ad caught your attention, talk with the advertising manager of the publication.