3 Work From Home Scams Exposed

Advances in technology have made it possible for employees across many industries to work from home. In home offices, employees are able to replicate office setups that were traditionally reserved for brick and mortar sites. Working from home continues to become more common as employers view telecommuting as a low cost alternative to the traditional setup, and from 2005 to 2012 the number of workers telecommuting increased by around 80 percent, according to Global Workplace Analytics. Alpine Access, a large telecommuting company, published projections that estimate 63 million Americans will work from home by 2016.

Earnings are generally high among those who telecommute as around three-fourths of those who work from home earn in excess of $65,000 per year. These high earning telecommuting jobs require specialized skills or expertise and several of the opportunities are in management, financial fields, and information technology. Self-employed workers and public sector employees also commonly work from a home office.

On the other hand, some industries, like customer service and call centers, offer work from home opportunities to those with less experience. These lower level jobs generally pay anywhere between the minimum wage and upwards of $12 per hour. As legitimate employers, these call centers will not offer an abnormally large salary. If an employer offers a large salary for a job that requires little experience, be extremely careful as you may be dealing with a scam artist as opposed to an actual employer.

Since telecommuters don’t really report into an office each day, scams are a giant concern regarding work from home jobs. In 2013, consumers lost over $781 million to Internet fraud. With all of the legitimate opportunities out there, interacting with a fake not only wastes time, it can also be dangerous and costly. On the FTC’s Scam alert page and on consumer complaint pages, we identified some recent work from home scams. These were the scams that stood out.

Source: Thinkstock

Source: Thinkstock

1. Start Up Scams

These types of scams target those who are starting home-based businesses. These companies claim to be able to increase a business’ profitability through the purchase of products and services, and while some of these companies are legitimate, business owners must exercise extreme caution.

The Tax Club was a recent example of such a scam. The FTC Scam alert report indicates, “Tax Club called people who were trying to start new home-based businesses and falsely claimed to be affiliated with companies from which the consumers had already purchased products and services. The Tax Club then pitched business development services like coaching, corporate formation, and credit development, claiming that the services were essential to the success of home-based businesses. After an initial sale, The Tax Club called repeatedly to sell additional services at a hefty price — several thousand dollars per service. In the end, new business owners lost their money — either The Tax Club didn’t deliver or the businesses never got off the ground.”

The FTC and New York and Florida Attorney General filed charges on the Tax Club. The alleged con club settled, agreeing to surrender $15 million in assets and refrain from selling business development services or work from home type opportunities. Although this particular company is prohibited from conning start ups, this does not mean there are not several others out there just like it performing a similar con. Always trust your gut and conduct a thorough review of any person or company you’re considering doing business with.

Source: Thinkstock

Source: Thinkstock

2. Seems Legit

About.com published some of the experiences its users recently had with work-at-home scammers. Several users submitted an alleged scam email by a company called KDL. The initial email, which doesn’t ask for any personal information or upfront payment, may seem legitimate upon first inspection.

The email reads: “KDL which is an affiliate of a major international designer goods distributor opens a vacancy of administrative assistants/sales support. This position doesn’t require office attendance and allows a candidate to work remotely from home, however providing all the necessary service to the sales department and directly to corporate clients and individuals in USA, Eastern Europe and Asia. The offered position implicates sales support for arrangements held in Australia. The duties are the following: correspondence management; purchasing orders and expensing reports handling; keeping the records of all the purchases and payments made.” The position offers a part-time salary of 580 AUD per week plus bonuses and a full-time salary of 970 AUD per week plus bonuses.

The exact motive of KDL are unclear, but are likely money-related. There are hundreds of other scammers like KDL out there and you can protect yourself by conducting a thorough review of the company. Do not send a company any money or personal information unless you are certain you are dealing with a legitimate business.

Source: Thinkstock

Source: Thinkstock

3. Old Classics

These types of scammers often find your resume on a job search sites, like Monster or Career Builder, or they obtain your email address through harvesting or from a purchased list. Then, they contact you with a job opportunity that sounds too good to be true. Classic examples of these types of scams are the mystery shopper scams, where someone will generally send you an email stating you can earn hundreds of dollars for simply going out to eat. The scammer will then request a registration fee, or some sort of up-front monetary investment. According to the FTC, you can find legitimate mystery shopping opportunities by visiting the Mystery Shopping Providers Association.

Medical billing and envelop stuffing scams are also common cons, where the scammer will promise a decent salary (often between $20,000 and $50,000 per year.) What the con artist is looking for is money — they ask for an upfront investment for all of the software or materials you need to begin your career. The FTC reports that the vast majority of these job posts and emails are scams.

Source: Thinkstock

Source: Thinkstock

A few tips

With work from home job opportunities becoming so prevalent and responsibilities varying so widely across industries, how do you spot a fake? According to an FBI publication and other reports, these are a few red flags:

  • You cannot verify the company’s legitimacy through the Better Business Bureau.
  • The prospective employer asks for an upfront payment or investment.
  • The prospective employer requests personal information (like your date of birth or social security number) during the first interaction.
  • A Google search produces suspicious results (when you Google search the company, others say it is a scam.)
  • It sounds to good to be true (the experience required or job responsibilities are not in-line with the supposed pay.)
  • You feel suspicious of the prospective employer (trust your instincts.)

A legitimate employer, home-based or otherwise, will come across as such. You will generally speak with live people, you will be able to find reviews from other employees online, and the hiring process usually will not involve any sort of monetary investment from you. This list of legitimate work from home companies is from Forbes:

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