Avoiding Work-at-Home Scams
by Wendy Priesnitz

Q: I am interested in starting a home-based data entry/clerical business. I have been looking on the Internet, sending out e-mails, etc. to no avail. I have found many scam artists out there who promise big bucks and exactly what I am looking for, but they all want an amount of money first, then they send you a booklet with company names and addresses. All I want to do is stay home for my children and help to pay bills and the mortgage. Would you have an answer for me?

A: Unfortunately, although there seem to be many work-at-home opportunities advertised in newspapers and magazines, few of them are legitimate. And virtually none of them are actually businesses.

You may see ads that say things like "Earn one thousand dollars a week at home, in your leisure time!" Or "Many people are supplementing their income by working at home. Let us tell you how." An offer like this may sound very attractive. But be cautious about work-at-home ads, especially the ones promising large profits in a short period of time. Home employment schemes are one of the oldest kinds of classified advertising fraud, according to the U.S. Bureau of Consumer Protection.

Even if a company actually offers you work at home, it will often be on a piece-work basis. Because you are, in effect, employed, you cannot legitimately deduct the cost of a home office or other expenses on your income tax return, like you could if you had a real home business. But you still do not receive any of the benefits that you might expect to receive as an employee, like a pension plan, health insurance or unemployment insurance coverage...or even a living wage.

What many of the work-at-home ads do not say is that you may have to work many hours without pay. There also may be hidden costs. Many work-at-home schemes require you to spend your own money to place ads in newspapers, make photocopies, or buy the envelopes, paper, stamps and other supplies or equipment needed to do the job. The company may even demand that you pay a membership fee or make regular payments in order to get continued instructions or materials. Or the amount of money paid per item manufactured or envelope stuffed may be so small that you end up making a very small amount of money per hour. Some people who have answered such ads have even found that they were victims of an outright scam; they sent money and received nothing at all in return.

Clearly, it's prudent to investigate these programs before becoming involved. If a work-at-home program is legitimate, its sponsor will readily tell you - in writing and for free - what's involved.

You are better off to take a course that will help you start up a legitimate home-based business, offering your services to other businesses for a fair market price.


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