Working From Home: Don't Get Scammed

April 3, 2007 — -- While we're focused on making money, it's also important to note how to avoid losing it, too.

I responded to ads to stuff envelopes that boasted the potential to earn up to $1,500 a week with little effort. Though I was highly skeptical, I bought a dozen different starter kits for $20 to $50 each, figuring one might work.

Each instructed me to mail flyers aimed at recruiting other people to stuff envelopes. I wasn't promoting a product or service; I was just told to get other people to stuff envelopes with the same offer. If they purchased the same kit, I'd receive a commission.

I'm pretty resourceful, yet I couldn't get this to pan out. I didn't get a single cent. Recruiting people to stuff envelopes is the oldest work-from-home gimmick and it fools new people every day. Don't be one of them.

Christine Durst, author of "The Rat Race Rebellion," says her research indicates the ratio of scams to legitimate opportunities is 42-to-1.

That isn't to say that all home-based opportunities that request money up front are rip-offs. Many legitimate direct-sales companies and others that help you start your own business require a start-up fee to cover the cost of training manuals and supplies to get you going.

Before mailing a check or submitting a credit card payment, talk to a live person about the requirements and the realistic earning potential. Also ask about obstacles and challenges.

If you wanted to become a consultant with Mary Kay or Avon, you'd have no trouble finding people willing to talk -- not just e-mail you -- about how to get started. The same access to information and people should be your standard for any home-based work you consider.

If you are going to send money, ask first about a money-back guarantee. Specifically, find out how you'll have to go about requesting a refund if you're not satisfied and when you'll receive it.

This is especially important for Web sites that require a registration fee for access to listings or for sites that want to sell you an "information packet" or "starter kit."