Don't Fall for Work-From-Home Scams

Aug. 26, 2008 — -- Your e-mails about working from home continue to dominate the "Good Morning America" Web site. Many of you say scams are a major concern and worry about Web sites and ads that prey upon people who need to earn money from home.

For many of us, being asked to pay money to make money sounds contradictory, but this isn't always a sign of a fraud. One example of a legitimate "pay first" opportunity is Mary Kay cosmetics. New sales agents are asked to spend $100 on a starter kit, which includes the tools and training to get going as an independent representative. In fact, many direct sales companies want prospective agents to make an investment in the company to show they're serious about the opportunity.

There are numerous other home-based opportunities that ask for money upfront to cover the cost of a background check or for your training or for the materials to get started. The reason: There's an entrepreneurial element to working from home -- you have to show up to your desk and stay motivated on your own, without a manager or a co-worker to guide you every step of the way. Many companies say it doesn't make sense to lay out money, time and effort to train someone virtually, only to have them decide they're not interested.

By asking you to make some kind of financial investment, the company is reassured that you've done your homework and you know what you're getting into.

Still, the scams outnumber the legitimate opportunities. My new book, "Will Work From Home: Earn the Cash Without the Commute," offers the telltale signs that an opportunity may not be valid.

One woman who had been scammed several times recently told me that a feeling of helplessness often leads to hope. I get that. When you become so desperate for a way to make money from home, your judgment can sometimes fail you because you're willing to spot any glimmer of hope in the opportunities, e-mails and Web sites that come your way.

The ads may promise the ability to make $1,000 a day, and even though you know that's not likely, you wonder if you might be able to make $100 a day, and you decide to go for it. Following these basics will help you weed out the bad from the good to avoid being taken.