Work-From-Home Scams on Rise

In July 2008 Teresa Yeast, of Platea, Pa., heard about Darling Angel Pin Creations through her sister who saw an ad in a local Ohio newspaper. Darling Angel offered to pay people to craft angel pins from home. Yeast's husband had just been laid off after 17 years at the same company, and the couple had two disabled children to feed. The chance to make extra money working at home seemed like a gift.

"The promise was that I would make these angel pins and they would inspect them and pay me $2.50 for every angel pin I made, and that I had the ability to make $500 a week," says Yeast, 44. The $500 deposit for art supplies appeared beside the point.

Teresa's pins were rejected time after time, and after spending months hoping to make an acceptable product, she tried calling Darling Angel Pin Creations. No response. By the next spring, Yeast was really fed up, so she called an attorney who, after doing some research, discovered that Darling Angel was taking heat from many disgruntled contributors. Yeast immediately filed a complaint with the Federal Trade Commission. Nearly a year later, the FTC brought a lawsuit against Darling Angel, which according to FTC lawyer Julie Lady, sold starter kits to 8,000 suckers in 2008 and has been doing business since at least February 2003.

Shelly Olson, the alleged culprit behind the scam, didn't go away quietly. Yeast says Olson posted "Meet the woman who closed my business" on her website, along with a photo of Yeast, her home address, her kids' names and bank information. The case is pending in Florida.

"These companies, and others like them, are taking advantage of unemployed Americans at a time where we're unemployed and we have to support our families," says Yeast. "I hope they get what they deserve." Olson is not using an attorney in the lawsuit; when reached for comment, she initially said she would provide a response in writing, but then later rescinded.

Whether it involves stuffing envelopes, processing medical insurance claims or assembling toys, most victims never get paid for their work or ever recoup their startup fees. (For a complete list of 12 common classic home-based-business scams, click here.) You might think the opportunity of making easy money in your pajamas would get anyone's hackles up. Indeed, thousands are duped every year. The most likely prey includes senior citizens, stay-at-home mothers and people with low incomes.