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Avoiding Home Business Scams

Now maybe the reason you're interested in setting up a home business is because you've seen an ad somewhere, or you've been approached by someone. It was all about a great work-from-home money-making opportunity, and you're excited. Finally, you can quit your job!

If you're thinking of working from home by someone else's rules, though, you have to realise that at least 99% of the offers out there are scams - after all, if it was that easy to pay a few dollars and make thousands, wouldn't everyone be doing it by now? Here are the biggest scams out there, how to recognize them, and how to avoid them.

Location, Location, Location

Where did you see that work from home offer? If you got it in the post, or by email, or saw it on a poster taped around a telephone pole, then I can guarantee you right now that it's not a legitimate offer. If you saw the ad in a newspaper, in a jobs magazine or on a jobs website, then it's a little more likely to be legit - but not much. Always check out any offer, and assume it's a scam until you have iron-clad proof to the contrary.

Envelope Stuffing

This is the most established work-from-home scam, and it's been going for decades now. Basically, once you pay your money and sign up to work from home, you're sent a set of envelopes and ads just like the one you responded to. You might make some money if someone responds to your ad, but eventually there just won't be a market for it any more. Anyway, work from home offers like this are illegal pyramid schemes.

You won't make any money putting letters in envelopes - get over it.

Charging for Supplies

The practice of charging for supplies is hard to pin down to any one scam - it's the way almost all work-at-home scams work (including the envelope stuffing, above). You'll be asked to make a small 'investment' for whatever materials would be needed to do the work - and then you'll be sent very shoddy materials that aren't worth anything like what you paid, and you'll find that there's no market for the work anyway.

If anyone asks for money upfront, run. A real company should be willing to deduct any 'fees' from your first paycheck - if they won't do that for you, then that's because they don't ever plan to pay you.

Working for Free

This variation on the scam is common with crafts. You might be asked to work at home making clothes, ornaments or toys. Everything seems legitimate - you've got the materials without paying out any money, and you're doing the work. Unfortunately for you, when you send the work back, the company will tell you that it didn't meet their 'quality standards', and will refuse to pay you. Then they'll sell on what you made at a profit, and move on to the next sucker.

Never do craft work from home unless you're selling the items yourself. Note that you don't need to be selling to consumers (you could be selling to wholesalers), but you still need to be the one deciding what you make and getting the money.

Home Typing, Medical Billing and More

There are lots of work-from-home scams that involve persuading you that some industry has more work than it can handle, and so has to outsource to people working from home. For example, you might be told that you'd be typing legal documents, or entering medical bills into an electronic database. These scams have one thing in common: they all say that all you need is your computer, and they all then go on to say that you need to buy some 'special software'.

This software might appear to be from a completely unrelated company, but don't be fooled - the whole reason the 'work-from-home' ad was there to begin with was simply as cynical marketing for the software.

As you can see, running a 'home business' that just involves 'working' for one company is a bad idea. You don't know who you're dealing with. Here's the clincher, though: even with entirely legal work-at-home offers that do pay you for your work, you still won't make anywhere near as much as you can with your very own home business. So why bother with them at all?