Avoiding Home Business Scams

As more and more people opt-out of conventional jobs and instead choose to work from their homes, the number of work-at-home scams has also increased. Each year thousands of people find out the hard way that opportunities which are too good to be true usually are but not before they invest and waste millions of dollars a year.

You don't have to be one of those unfortunate people. All you need to do is to become more informed, ask the appropriate questions, and know what to do if you are the victim of illegitimate opportunity.

Become More Informed

One of the first things you should become aware of are the types of business opportunities which are most frequently scams.

One of the oldest of these scams are stuffing envelopes and/or assembling items in your home. You'll find these opportunities in lots of sources, even some that are legitimate. However, what most of these ads fail to say is that you have to pay them a fee to begin. Then after you complete your job, your work is often rejected as substandard and, of course, you never see a penny. The other thing that happens is that you have to send in money only to receive instructions on how to place an ad just like the one that you've just placed in order to bring individuals just like yourself.

Another common work-at-home scams are Pyramid schemes. Pyramid schemes are often passed off as MLM (multi-level marketing) opportunities, but there is a key difference.

Pyramid schemes are more concerned with having you bring in more people and less concerned with selling products. The reason is that they aren't making their money off of selling anything to actual customers but from taking money from hopeful entrepreneurs like you. Most of these schemes ask you to make an investment or a purchase in order to become a full-fledged participant and/or to receive all of your potential profits. Generally, you never see any of the earnings promised in their advertisements.

If an opportunity you've found seems to fall into one of these categories, you should start asking questions before signing up for anything.

Ask the Appropriate Questions

Even though these work-at-home opportunities often state that you have to act now or join by a certain time to secure your spot, you must take the time to ask questions. Then, don't join unless your questions are answered to your satisfaction.

Here are some of those questions:

1. Ask exactly what type of work you will be expected to perform.

2. Ask how you will be paid. If you are going to be paid by commission, be sure to ask exactly what your percentage will be.

3. Ask exactly how much money you need to spend, including fees, supplies, inventory, etc.

4. Ask how long the company has been in business since non-legitimate companies frequently change their name to go out of business.

5. Ask to get copies of the company's sales materials and product descriptions, so you can determine how product-focused the company is.

Know What to Do If You Are a Victim

If you are the victim of one of these scams, then you need to know what to do next.

Your first course of action should be to notify the company. Talk to someone as high up in the business as possible and be sure to make them aware that your plan to contact the appropriate authorities.

If you don't receive any satisfaction from the company, your next step is to report the company to the authorities. You should file a complaint with at least one, if not all, of the organizations below:

1. The Federal Trade Commission – You can file a report through their web site at www.ftc.gov

2. The Better Business Bureau – You can contact them through their web site at www.bbb.org.

3. The Attorney General of Your State – You can find out how to contact the attorney general in your area by doing a search for “Your State attorney general" at Google.com. The right page should be the first or second that appears in the search results.

The bottom line is if a business opportunity seems to good to be true, then it's worth checking out. Any business that tries to pressure you into making a hasty decision isn't a business you should be working with.

© 2004 Vishal P. Rao