Herald Journal, July 11, 2005
Work-at-home offers often too good to be true
By Liz Hellmann
Working at home can provide people the freedom to enjoy the “dog days” of summer by arranging their own schedules, and possibly slashing hours off their work week.
Unfortunately, many work-at-home offers promise cool earnings, but in reality, are full of hot air.
Work-at-home offers can be found in newspapers, on the Internet, and stapled to the post next to the local grocery store.
Work-at-home offers are appealing to people who want to spend more time with family and friends, earn some extra money, or for college graduates searching for a stable income.
The Federal Trade Commission and the Better Business Bureau deal with thousands of complaints from people who have put their time and energy into a fraudulent work-at-home scheme.
However, there are some work-at-home opportunities that are legitimate. A good rule of thumb is, if it sounds too good to be true, it probably is.
But there are other ways to tell if money invested will turn a profit, or turn into a nightmare.
Becoming a consumer, I dove into the world of work-at-home schemes to try my hand at a few businesses.
An Internet search quickly brought thousands of work-at-home opportunities (and several warnings of work-at-home scams), to my fingertips.
Several of the opportunities promised a monthly salary above $20,000 the first year. Almost all of these offers require you to buy a “start-up” kit, ranging in price from $20 to $5,000.
Some start-up kits offer the same advice on starting a home-based business that can be found for free from government agencies, colleges and universities, libraries, and the Internet.
I chose one company to follow-up on extensively, and what I learned is eerily similar to the warnings given by the FTC and BBB.
But first, let me explain what to expect. The company I contacted promised a salary of $1,000 to $5,000 per week, and a work week of about 25 hours.
Almost immediately after visiting the web site, I was contacted by e-mail, and received a phone call from a company associate that night.
The associate referred me to a phone number, in which I was to listen to a recorded “live conference call,” and then call back with any questions.
The information on the conference call claimed to be intended for only those who were serious about the opportunity, but the information was similar to that on the web site.
After repeating many phrases, such as “get the financial freedom you know you deserve,” and stop “working for corporate America,” some specifics were given.
To become a member, I was supposed to buy their primary product, which appears to be a type of motivational program, for $1,500.
After I bought the product, I would then refer others to the program and to the same “live conference call” I was listening to. I would also receive a small ad to submit to newspapers and post on the Internet.
For every person that contacted and bought the “primary product” from me, I would directly receive $1,000.
One-third of people who bought the primary product from me were also likely to buy a conference ticket, the recording explained.
Conference tickets cost around $5,000, of which I would pocket more than half. Soon I would be on my way to earning $30,000 a month, depending on the number of people who signed up through me.
It sounds like a pretty good deal, but there are a few catches.
Everything is based on commission, if nothing is sold, then that’s exactly what I get.
I also had a very difficult time finding out specific information on what was included in the primary product, and if, indeed, it was worth such a high price tag.
I was told, repeatedly, this product would change my life for the better. Materials included were a DVD, several CDs, and a workbook.
Although I didn’t invest the $1,500 to receive this packet, I did find reports from an unsatisfied consumer who did.
This person claimed to have spent six months working full-time doing what the company instructed, only to incur more than $12,000 in debt, and gain nothing.
He also claimed he felt pressured to buy higher levels of the product in order to succeed, and needed to spend extra money on start-up costs before even beginning.
Another person claimed the system works for him, and the person just isn’t working hard enough, despite claims from them that they were working hard.
Testimonials are subjective. However, this business was listed unfavorably with the Better Business Bureau.
Since many of these offers promise big earnings, they must employ other techniques to attract the consumer’s attention, and wallet.
Making an offer seem “urgent” is one of the tactics used by scams to catch customers, before they have time to research the company properly.
An example of this is an opportunity which claimed it only had three spots left before the offer expired.
However, when I visited the same site a week later, the same offer was listed, still claiming time was running out.
Other work-at-home scams offer money for typing lists, completing surveys, or making crafts. In exchange for an up-front fee, a list of companies is provided who are supposed to be interested in paying for these services, but in reality, are not.
Sometimes, consumers won’t get a product at all, but will be sent the same ad they replied to. They are then instructed to place that ad in the paper, and do the same thing to anyone who answers them.
That appears to be the nature of the ad I replied to, although a motivational kit is also sent.
Tips for avoiding scams
Before investing time and money into a work-at-home offer, consider these tips from organizations like the FTC and BBB;
• don’t give out credit card information.
• do not call a business and let them switch to a different “secure” line, or “test your phone line.” They will likely switch you to a long distance number, and you will end up paying for the charges.
• be suspicious of any offer that promises a job.
• check with the Better Business Bureau to see if there are any complaints against that business, or if they are a member of the bureau.
• be careful of “previously undisclosed” federal government jobs. All federal government jobs are open to the public, and do not require a fee to apply.
• beware of offers that use vague descriptions, canned phrases, and limited details.
• check the business for proper licenses and a building that is open to the public.
• be wary of PayPal accounts, which could be paying a third party money for generating new accounts.
• companies do not pay people to type lists for them or shop for them. They have databases and professional retail managers for such jobs.
If a business is legitimate, it should tell you, in writing, about the program. Be sure to understand what the responsibilities are, the exact cost of materials, and if pay is based on salary or commission.
It’s a good idea to get a signed contract of all this information, including a refund policy.
If a work-at-home scheme does turn out to be illegitimate, notify the Federal Trade Commission and local consumer protection offices.
For more tips on working at home visit www.ftc.gov.