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.

Unrealistic Sense of Urgency: The words "must act now," "limited time offer," "only two slots remaining" are phrases that are designed to get you to "buy now." It's the same tactic made popular in infomercials: "Call now and you'll get this bonus gift!" But at least with that, you know exactly what you're getting. Legitimate money-making opportunities will never try to force a split-second decision. Legitimate companies don't want their workers making rushed decisions without the facts.

No Skills Required: Every job requires some type of skill or experience. When an ad or Web site says "No Skills Needed" and offers to pay you hundreds or thousands of dollars a day, stay away. A legitimate opportunity will demand some kind of skill set from its successful applicants.

Huge Promises of Big Bucks: You've seen those ads: "Make Up to $65,000 to $250,000 a Year!" or "Make Thousands of Dollars Per Day!" Promises of big bucks or unrealistic, wide ranges are definite warning signs. Every legitimate opportunity pays a fair and reasonable wage for hard work. No legitimate company will ever say it's "easy" or that you'll make a fortune. Don't get fooled by big numbers.

Fake IMs: Many Web sites with inflated claims have a feature where a pop-up window appears like a "live agent" to convince you to act now. It's like the scene in "Ferris Bueller's Day Off" when the principal goes to the house and rings the doorbell. He hears a prerecorded message from Ferris designed to make it seem as if Ferris is home sick. It fools him -- until he decides to press it again and he hears the same message and realizes it's been taped.

On these sites, when you try to leave, the pop up begs you to stay and aims to convince you to act now. It's usually a system trying to fake you. Many of these sites will promise to give you support or answer questions after you sign up, but if you can't connect to a real person about the opportunity before you pay, don't do it.

Ads vs. Reputable Sites: When you're visiting your favorite Web sites -- like the one you're reading now -- pay attention to the fine print. "Advertisement" or "Sponsored Ad" should be used to differentiate what is paid advertising from the editorial content. Even on reputable Web sites, such as the big job boards, major search engines and even your favorite online retailers, there are ads or other forms of paid advertising that sometimes promote work-from-home opportunities.

It's critical to distinguish between an ad and editorial so you aren't fooled into thinking the opportunity being advertised is endorsed by that site. You can't assume that just because it's on a reputable company's site that the ad is for a trustworthy company.

Do Some Digging: Find out what other people say about the company. Google the work-from-home opportunity to see what comes up. You may find a message board with comments or warnings. Read through them to get a feel for what others have experienced. Check with FTC.gov and BBB.org, but remember that the absence of a negative report doesn't automatically mean something is legit. Stay away from envelope stuffing and check-cashing opportunities.

Phone a Friend: If your gut tells you something isn't right, but you're still tempted to give it a shot, call a trusted friend to review the opportunity. Go line by line and look for clues and cues that may not make sense. Instead of trying to spot what's right, play devil's advocate and look at what's wrong. If after that you're convinced that it's the way to go, then move forward.

Tory Johnson is the workplace contributor on ABC's "Good Morning America" and the CEO of Women for Hire. Visit her online at www.womenforhire.com.