| Work-at-Home Schemes | |||
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Modern Twist to Old Scams
With the rise of the Internet and e-mail, getting a phony ad or message out to a vast audience is cheap and easy. Even though the old work-at-home scams have taken on a modern twist, the typical profile of victims who are most susceptible to these scams has changed very little. Work-at-home con artists have always preyed most heavily upon senior citizens, the disabled, mothers who want to stay at home with their children, people with low income and few job skills, and people who just want to get rich quick. Cyberspace is simply the newest arena that scam artists have entered to widen their hunt for more people to dupe. To avoid falling for work-at-home scams, both on- and off-line, look for the following warning signs:
Warning List
Most Common Scams
This scheme requires you to invest hundreds of dollars in instructions and materials and many hours of your time to produce items such as baby booties, toy clowns, and plastic signs for a company that has promised to buy them. Once you have purchased the supplies and have done the work, the company often decides not to pay you because your work does not meet certain "standards." You are then left with merchandise that is difficult or impossible to sell.
The only people who benefit from chain letters are the mysterious few at the top of the chain who constantly change names, addresses, and post office boxes. They may attempt to intimidate you by threatening bad luck, or try to impress you by describing themselves as successful professionals who know all about non-existent sections of alleged legal codes.
When answering such ads, you may not receive the expected envelopes for stuffing, but instead get promotional material asking for cash just for details on money-making plans. The details usually turn out to be instructions on how to go into the business of placing the same kind of ad the advertiser ran in the first place. Pursuing the envelope ad plan may require spending several hundred dollars more for advertising, postage, envelopes, and printing. This system feeds on continuous recruitment of people to offer the same plan. There are several variations on this type of scheme, all of which require the customer to spend money on advertising and materials. According to the U.S. Postal Inspection Service, "In practically all businesses, envelope stuffing has become a highly mechanized operation using sophisticated mass mailing techniques and equipment which eliminates any profit potential for an individual doing this type of work-at-home. The Inspection Service knows of no work-at-home promotion that ever produces income as alleged."
Multi-level marketing, a direct sales system, is a well-established, legitimate form of business. Many people have successfully sold the products of reputable companies to their neighbors and co-workers. These people are independent distributors who sell popular products and also recruit other distributors to join them. On the other hand, illegitimate pyramid schemes can resemble these legitimate direct sales systems. An obvious difference is that the emphasis is on recruiting others to join the program, not on selling the product. For a time, new recruits who make the investment to buy product samples keep money coming into the system, but very few products are sold. Sooner or later the people on the bottom are stuck with a saturated market, and they cannot make money by selling products or recruiting. When the whole system collapses, only a few people at the top have made moneyand those at the bottom have lost their investment.
This is typical of advertisements showing up uninvited in your e-mailan old scheme advertised in a new way. You pay for a useless guide to work-at-home jobsa mixture of computer-related work such as word processing or data entry and the same old envelope-stuffing and home crafts scams. The computer disk is as worthless as the guidebook. It may only list free government web sites and/or business opportunities which require more money.
Generally, the promoter of this scheme attracts you by advertising on cable television and, perhaps, by inviting you to a business opportunity trade show at a hotel or convention center. You may be:
Most likely, the expensive training sessions are superficial, and the market for your services is very small or nonexistent. The promoter may delay the processing of your job, citing a backlog or mistakes in your work. There may also be no central computer as advertised. You may be left with no way to deliver what you have promised to your clients or customersif you found anyand with no way to earn any money on you own. Avoiding Fraud
Consider it a warning sign if a worker must buy something in order to start the program. Those interested also should take into consideration that, by becoming involved in a work-at-home scheme, they might well be perpetrating a fraud by selling the program to others, and risk investigation by postal authorities. For a reliability report on a specific work-at-home company, check first with your local Better Business Bureau. Signs of a Work-at-Home Scamer
If You Are Victimized If you become a victim of a work-at-home scheme, ask the company for a refund. If they refuse or give you an evasive response, tell them you plan to notify law enforcement officials. Keep careful records of everything you do to recover your money. Document your phone calls, keep copies of all paperwork such as letters and receipts, and record all costs involved, including the time you spend. If the company refuses to refund your investment, contact:
Outside Contacts To learn more about Work-at-Home Schemes, contact the following:
* If you find any of the web sites listed above to be inactive,
please contact the respective organization. Also, be aware that the
above phone numbers may be subject to change without notice.>
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ASSEMBLY WORK AT-HOME:
CHAIN LETTER:
ENVELOPE STUFFING:
MULTI-LEVEL MARKETING:
ONLINE BUSINESS:
PROCESSING MEDICAL INSURANCE CLAIMS: 