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Beware of work-at-home scams.

Almost every classified advertising section of newspapers, magazines and other periodicals, plus tv and radio, carry advertisements for work-at-home ventures. The advertisements sure sound interesting. People in need of extra income and time on their hands see cash floating before them as promised in the advertisement and it doesn't cost much to get started.

How can you tell if the offer is a scam?

Even with improved consumer fraud legislation, people who have been taken in often do not complain since the amount they lost is small and they are embarrassed to admit they have been fleeced. In addition, local police authorities are reluctant to spend the time to pursue small claims and the companies themselves are adept at completely disappearing before enough complaints pile up. People who fell for the scam may also place similar advertisements to try to recoup their losses, further perpetuating it.

I am reminded of the classic story about the advertisement along the lines of "Become a millionaire within a year! ". All you had to do was send in $5 for information. Reportedly all the buyer received was a short letter telling them to place similar advertisements to get 200,000 people to send them $5 each for the same advice. What's the old saying about, "If it sounds too good to be true..."?

A common scam is envelope stuffing, where you supposedly receive envelopes, labels, the envelope contents and so much per envelope mailed. However, any company which direct mails can buy equipment to do 10, 000 mailings per hour, which are then bulk mailed at a substantial discount to first class. Why would they need to subcontract it to people working out of their homes?

Other popular scams are managing vending machines or pay phones; independent travel agents or book or movie reviewers; overseeing display racks for greeting cards or computer software; performing data entry, billing and marketing services; mail order with merchandise supplied; area code 900 pay-per-call telephone numbers; producing promotional or event buttons; selling trading cards and grocery coupons.

Somewhat related scams have included providing information on well-paying state or federal jobs, how to obtain confiscated vehicles for a fraction of their value, participating in chain letters and using your home personal computer to provide income.

Some companies which furnish kits to assemble have now started to have their material delivered by commercial overnight services to avoid coming under mail fraud legislation. Often their advertisements stipulate your work must be of acceptable quality, and unless they really have a market for it, it seldom is, or you wind up working for less than minimum wages.

An example cited by the Dayton, Ohio Better Business Bureau involved a person with an interest in woodworking sending $50 in response to an advertisement which said $350 per week (which works out to $18,200 per year) could be earned assembling and decorating wooden picture frames. It took the purchaser an average of an hour and a half to produce each frame, for which he was paid $3.25. At this rate, he would have to work some 162 hours a week to make the projected $350 (and there are only 168 hours in a week!).

At that time, the Dayton Better Business Bureau offered the general warning to beware of any work-at-home opportunity which:

-- Does not have a telephone listing in the city which is given as their business address (call information). Often scam artists use a mail drop box via which their mail is forwarded to them to make them more difficult to locate.

-- Was advertised in classified sections of national magazines or tabloid newspapers (or local paper with an out-of-state address or phone number).

-- Requires an up-front payment to get started or to pay for the materials.

-- Makes extraordinary claims about potential earnings, within a very short time and with little effort or investment on your part.

-- Does not conduct personal interviews.

-- Does not supply all materials.

-- Requires employees to pay for employment.

The bureau said they were not aware of any work-at-home opportunity which provided even a minuscule return on time and investment.

Based on my research, I'll add some more recommendations:

-- Beware of any company which will not readily provide the name, address and telephone number of all their clients so you can call some at random for verification of their information. This includes correspondence courses which are supposed to lead to well paying jobs. (Actually, this is a very good test of their credibility since a company which has been highly successful in sponsoring work-at-home or career opportunities will want to promote it through success demonstrations.)

-- Don't take testimonials from past clients at their face value. Scam operators are not above writing their own testimonials or they may be actual testimonials, but from only a handful of clients who actually thought they did well.

-- Insist everything be in writing and then file it. If you later have to file a consumer complaint this will help provide supporting documentation.

If you do get taken, there are some recourses:

-- Contact your local or regional Better Business Bureau to file a formal complaint, even if the money involved is minor. If enough complaints are filed, action by the appropriate office might be taken to prevent others from being victimized.

-- The National Consumer Fraud Information Center, PO Box 65868, Washington DC 20035, sponsored by the National Consumers League, operates a hot line which assists in filing complaints. Counselors are available at 800-876-7060. They will pass the complaint on to the appropriate authorities for investigation. If fraud has caused a financial hardship, they can also refer you to the appropriate agency for assistance.

-- For fraud committed over the Internet, there is a complaint site on the World Wide Web at http:// It was created by the National Consumers League, MasterCard, law enforcement agencies and state attorneys general as the Internet Fraud Watch Program to gather information for possible further action.

-- The Federal Trade Commission will take consumer complaints at FTC, Correspondence Department, Washington, DC 20580. Call 202-326-2222 for what information to provide. While it does not intervene in individual disputes, information provided by consumers may indicate a pattern of violations requiring its action.

-- Within each state the attorney general office or consumer protection division is empowered to investigate consumer complaints and possible violations of state laws. Look under State Government in the yellow page of your state's capital phone book (check local library for copy). If you cannot locate what seems to be the right department there is normally number to call for directory assistance for the state's departments and agencies.

Before investing any money in a work-at-home opportunity contact the following:

-- The Federal Trade Commission at FTC, Public Reference Department, Washington, DC 20580, 202-326-2222. They have available a number of publications on consumer fraud, included Work-At-Home Schemes. Their publications can also be accessed via the Internet at

-- The American Home Business Association, 4505 S Wasatch Blvd., Salt Lake City, UT 84124, 801-273-5450. Ask if the company you are interested in is a member and, if so have any unresolved complaints been filed against them.

-- The National Association of Home Based Businesses, 10451 Mill Run Cir, Ste 400, Owings Mills, MD 21117,410-363-3698 serves as a clearing house for legitimate home-based business opportunities. To receive their certification work-at-home companies must submit the full details of their operation for review. They will advise if a particular company's operation has been cleared with them.

When contacting a company for further information ask if they are a member of either or both of the above associations. If not, let the buyer beware!

On the assumption they cannot all be bad apples, a book store can order a copy of The Work-At-Home Sourcebook: Over 1,000 Job Opportunities with Names, Addresses and Complete Information by Lynie Arden for you.

In addition to what may be in stock at a larger bookstore, Books in Print lists a number of references on the successful operation of home-based business; however, only the version on CD disk on a personal computer is of any real use for researching titles.

If you do get victimized chances are very good your name will go on a "sucker" list to be sold or traded to other similar companies. All you can do is to throw away their mail or hang up on the calls. "I am not interested, GOODBYE!" works.

Work-at-home opportunities should not be confused with cottage industries, where work is subcontracted out by legitimate companies to home workers or where home workers market through a national mail order catalogue company. Examples are craft items and hand-produced clothing. However, even here the same warnings apply. The national group for this endeavor is the National Association for the Cottage Industry, PO Box 14850, Chicago, IL 60614.

My recommendation: thoroughly investigate before sending any money and, if taken, sic as many people on them as possible.
COPYRIGHT 1998 Countryside Publications Ltd.
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Copyright 1998 Gale, Cengage Learning. All rights reserved.

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Author:Scharabok, Ken
Publication:Countryside & Small Stock Journal
Date:May 1, 1998
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