Work from Home Jobs: Avoiding Scams, Pt. 2

first_imgBy Carol ChurchIn part 1 of this series, we talked about what scammers are after and common warning signs of work-at-home scams. In part 2, we’ll talk about the questions to ask when pursuing a work-at-home opportunity, what to do if someone has been a victim, and multilevel marketing companies vs. pyramid schemes.Vitaliy Kytayko/PhotospinQuestions to AskAnyone considering a work-from-home opportunity needs to do their homework.First of all, google the company name plus “scam” and/or “reviews.” Of course, take it all with a grain of salt, but you’re likely to learn a great deal. You should also check the company’s reviews on the Better Business Bureau. Check their Scam Tracker as well.Second, check out the company and associated people on the Internet. Does everything seem legit? Are they who they say they are? Where is their physical office and can you call them up and speak to the person you’ve been dealing with?Finally, if still considering working for the company, one should find out more specifics about payment. Find out exactly how much and how often payment occurs, and if there is anything that will vary this. Ask what an average employee makes monthly. Ask to speak to some of these employees.If still feeling skeptical, ask to see proof that the claims they’re making about earnings are true. In fact, under the FTC’s Business Opportunity rule, consumers have the right to ask for a one-page disclosure document that offers important information about “jobs” that are really more “business opportunities” (often fraudulent). Learn more about this important consumer protection here.If You’ve Been a VictimUnfortunately, some will fall victim to one or another of these scams. If this is the case for you, or if you are helping someone who has been scammed, here are some resources that can help.If an identity has been stolen, it should be reported to the FTC at identitytheft.gov, which has many resources to assist in this scenario.File a complaint with the FTC about work-from home job scams here.Business-related scams can be reported to the Better Business Bureau’s Scam Tracker.The attorney general’s office in each state can also assist with business-related scams. Find your state attorney general here.A Note on MLMs vs. Pyramid SchemesMulti-level marketing businesses (selling products from home through a distributor, such as Avon, Pampered Chef, Lularoe, Jamberry, etc) are a common way to make money “from home” in the US, and are especially popular for military spouses. They are legal in the United States and are a legitimate way to earn money, though it should be noted that they are not an easy way to make money, and that many people do not earn much in this business.Pyramid schemes, on the other hand, are illegal. Pyramid schemes may consist of “buying into” a product-based opportunity or may be just marketed as “investment opportunities” with no physical product involved. In a pyramid scheme, each “investor” MUST recruit multiple other investors, and the scheme is solely dependent on recruiting others. Pyramid schemes do not work unless the people at the bottom of the pyramid loseIt can sometimes be difficult to tell the difference between an MLM and a product-based pyramid scheme, because in some ways, the two concepts are similar. However, they are not the same.MLM vs Pyramid SchemeMLM:Reasonable start-up costsThe focus is on the productThe training is about selling the product, not recruiting more sellersCompany supports its sellers in selling and marketing productCompany will buy back unsold inventory from the seller, although it may be at a discounted pricePyramid Scheme:High start-up costsMoney is earned through recruiting new members, not through selling productCompany does not back its products and is not interested in helping sellers market and sell productCompany refuses to buy back unsold inventoryCommissions are offered for recruiting new sellersFrequent pressure to “size up” your investment or pay more for additional trainingIf you’re interested in learning more about MLMs, the FTC has more info here. https://www.consumer.ftc.gov/articles/0065-multilevel-marketingReferences:References:Brunelli, L. (2017). 7 Ways to Protect Yourself From Work-at-Home Scams. Retrieved from https://www.thespruce.com/protect-yourself-work-at-home-scams-4049387Kohler, C. (2016). Don’t Get Scammed: 4 Questions to Help You Land a Legit Work-From-Home Job. Retrieved from https://www.thepennyhoarder.com/make-money/how-to-detect-work-from-home-scams/Federal Trade Commission. (2011). Bogus business opportunities. Retrieved from https://www.ftc.gov/tips-advice/business-center/guidance/bogus-business-opportunitiesFederal Trade Commission. (2015). Work-at-home businesses. Retrieved from https://www.consumer.ftc.gov/articles/0175-work-home-businessesFederal Trade Commission. (2016). Multilevel marketing. Retrieved from https://www.consumer.ftc.gov/articles/0065-multilevel-marketingWang, J. (2013). 5 Signs that MLM “Opportunity” Might Be a Scam. Retrieved from http://www.businessinsider.com/5-signs-that-mlm-opportunity-might-be-a-scam-2013-1Ward, S. (2017). Learn to Distinguish Between MLM and Pyramid Schemes. Retrieved from https://www.thebalance.com/is-it-multilevel-marketing-or-a-pyramid-scheme-2947159last_img

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