How To Avoid Classic Work-At-Home Scams

Be Part of One of America's Fastest Growing Industries. Earn Thousand of Dollars A Month From Your Home Processing Medical Billing Claims. You can find ads like the above everywhere--on telephone poles, in your newspaper, on television and on the Internet. While you may find these ads appealing, proceed with caution. Not all work-at-home business opportunities deliver on their promises.

And it’s been our experience that nearly all of them are scams. Countless work-at-home schemes require you to spend your own money to place newspaper ads; make photocopies; or buy the envelopes, paper, stamps, and other supplies or equipment you need to do the job. The companies sponsoring the ads may also demand that you pay for instructions or "tutorial" software. Consumers deceived by these ads have lost thousands of dollars, in addition to their time and energy. Here are examples of several types of classic work-at-home schemes:

Medical billing
Ads for pre-packaged businesses--known as billing centers--are in newspapers, on television and on the Internet. If you respond, you'll get a sales pitch that may sound something like this. There's a severe crisis in the health care system, due partly to the overwhelming task of processing paper claims. The solution is electronic claim processing. Because only a small percentage of claims are transmitted electronically, the market for billing centers is wide open. The promoter may also tell you that many doctors who process claims electronically want to outsource or contract out their billing services to save money. Promoters will promise that you can earn a substantial income working full or part- time, providing services like billing, accounts receivable, electronic insurance claim processing and practice management to doctors and dentists. They also may assure you that no experience is necessary-- that they will provide clients eager to buy your services or that their qualified salespeople will find clients for you.

The truth
You will have to sell! These scam artists rarely provide experienced sales staff or contacts within the medical community. The promoter will follow up by sending you materials that typically include a brochure, application, sample diskettes, a contract (licensing agreement), disclosure document, and in some cases, testimonial letters, videocassettes and reference lists. For your investment of $2,000 to $8,000, a promoter will promise software, training and technical support. And the company will encourage you to call its references. Make sure you get many names from which to choose. If only one or two names are given, they are probably being individuals who are hired to give bogus testimonials.

If at all possible, it's best to interview people in person, preferably where the business operates, to reduce your risk of being misled by shills and also to get a better sense of how the business works. Very few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues--let alone recover their investment and earn a substantial income. Competition in the medical billing market is fierce and revolves around a number of large and well-established firms.

Envelope stuffing
Promoters usually advertise that, for a small fee, they will tell you how to earn money stuffing envelopes at home. Later, when it's too late, you find out that the promoter never had any employment to offer. Instead, for your fee, you're likely to get a letter telling you to place the same "envelope-stuffing" ad in newspapers or magazines, or to send the ad to friends and relatives. The only way you'll earn money is if people respond to your work-at-home ad, and pay the same fee that you did. This page has a detail of other scams.

Assembly or craft work
These programs often require you to invest hundreds of dollars in equipment or supplies. Or they require you to spend many hours producing goods for a company that has promised to buy them. For example, you might have to buy a sewing or sign-making machine from the company, or materials to make items like aprons, baby shoes or plastic signs. However, after you've purchased the supplies or equipment and performed the work, fraudulent promoters don't pay you. In fact, many consumers have had companies refuse to pay for their work because it didn't meet quality standards. Here's the catch: In order to get out of paying workers, their work is NEVER deemed to be "up to standard, leaving workers with relatively expensive equipment and supplies and no income. To sell their products, these workers must find their own customers. Legitimate work-at-home program sponsors should tell you - in writing what's involved in the program they are selling. Here are some questions you might ask a promoter.

What tasks will I have to perform?
Ask the program sponsor to list and what every facet of the job is?
Will I be paid a salary or will my pay be based on commission?
Who will pay me?
When will I get my first paycheck?
What is the total cost of the work-at-home program?
What are total costs for supplies, equipment and membership?
What will I get for my money?

The answers to these questions may help you determine whether a work-at-home program is appropriate for your circumstances, and whether it is legitimate. To our knowledge, nearly all are scams. You also might want to check out the company with your local consumer protection agency, state Attorney General and the Better Business Bureau, not only where the company is located, but also where you live. These organizations can tell you whether they have received complaints about the work-at-home program that you're interested in.

Be wary
The absence of complaints doesn't necessarily mean the company is legitimate. Unscrupulous companies may settle complaints, change their names or move to avoid detection. If you have spent money and time on a work-at-home program and now believe the program may not be legitimate, contact the company and ask for a refund. Let company representatives know that you plan to notify the authorities about your experience. If you can't resolve the dispute with the company, file a complaint with the following organizations.

The Attorney General's office in your state or the state/province where the company is located office will be able to tell you whether you're protected by any state or provincial laws that may regulate work-at-home programs.

Your local consumer protection offices
Your local Better Business Bureau
The U.S. Postal Service and Canada Post investigate fraudulent mail practices and the advertising manager of the publication that ran these ads.

How To Avoid Getting Scammed By Illegal Pyramid Schemes
Multi-Level Marketing (MLM) or network marketing programs are a method of selling goods or services through distributors. These programs typically promise that if you sign up as a distributor, you'll receive commissions for your sales and those of the people you recruit to become distributors. These recruits are referred to as your "downline." Some multi-level marketing programs are legitimate. However, others are illegal pyramid schemes. In pyramids, earned commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors--not to consumers in general. The underlying goods and services, which vary from car leases to cosmetics to vitamins, serve only to make the schemes look legitimate.

Joining a pyramid is a risky proposition because the vast majority of participants lose money to pay for the rewards of a lucky few. Most people end up with nothing to show for their money except the expensive products or marketing materials they're pressured into buying. If you're thinking about joining what appears to be a legitimate multi-level marketing program, take time to check out everything about the program. For example:

What's the company's track record? What product does it sell? Does it sell products to the general public? Does it have the evidence to back up the claims it makes about its product? Is the product competitively priced? Is it likely to appeal to a large customer base? How much is the investment to join the program? Is there a minimum monthly sales commitment to earn a commission? Will you be required to recruit new distributors to earn your commission?

Be skeptical if a distributor tells you that for the price of a "start-up kit" of inventory and sales literature--and sometimes a commitment to sell a specific amount of the product or service each month--you'll be on the road to riches. Many times participants spend a lot of money to "build their business" by participating in training programs, buying sales leads or purchasing the products themselves. Far too often, their own purchases are all they will ever see for their investments.

Also, if you decide to become a distributor, you are legally responsible for the claims you make about the company, its products and the business opportunities it offers. That applies even if you're repeating claims you read in a company brochure or advertisement. The Federal Trade Commission advises you to verify the research behind any claims about a product's performance before repeating those claims to a potential customer.

In addition, if you solicit new distributors, you are responsible for the claims you make about a distributor's earning potential. Be sure to represent the opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember that you could be held liable. The Federal Trade Commission (FTC) suggests that you use common sense when evaluating a multi-level marketing opportunity and consider the following tips before you make your decision:

1. Avoid any program that pays commissions for recruiting additional distributors. It may be an illegal pyramid.

2. Beware of programs that ask new distributors to purchase expensive inventory. These programs can collapse quickly-- and also may be thinly-disguised pyramids.

3. Be cautious of programs that claim you will make money through continued growth of your "downline"-the commissions on sales made by new distributors you recruit--rather than through products you sell.

4. Beware of program that claim to sell miracle products or promise enormous earnings. Just because a promoter of a program makes a claim doesn't mean it's true! Ask the promoter of the program to substantiate any and all claims with cold, hard evidence.

5. Beware of shills--"decoy" references paid by a programs promoter to describe their fictional success in earning money through the program.

6. Don't EVER pay or sign any contracts in an "opportunity meeting" or any other high-pressure situation. Insist on taking your time to carefully think over your decision to join. Talk it over with your spouse or partner, a knowledgeable friend, and an accountant or lawyer.

7. Do your due diligence! Check with the Better Business Bureau and state Attorney General's office about any porgram you're considering--especially when the claims about the product or your potential earnings seem too good to be true.

The manager may be interested to learn about the problems you've had with the company. In addition, the Federal Trade Commission (FTC) works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot them and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357)

About the author: Romeo Kane is an information technology, training and Home Based Business Opportunity Consultant in Toronto, Ontario Canada. He has a specialized background in network and computer security for over 10 years, working as MCSE, CCNA, MCSD and CISSP. Has written many books and articles on search engine optimization, internet marketing, business success, home based business opportunity, online business, search engine friendly web design, how to increase your sales and e-mail marketing. Just finished writing a new book called "Secrets Of The Pros" you can learn more about it at http://www.cisspguide.com

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