Work-at-home scams
By Julie E. Houston • Bankrate.com

You see the ads all the time -- in the newspaper, on telephone poles, in e-mail -- "MAKE $1,000 A WEEK!!! No experience necessary!!! LIVE THE HIGH LIFE!!!" But as the saying goes, if something sounds too good to be true it probably is.

Lana Norman is no sucker, but she got taken by a work-at-home scam. She answered a newspaper ad for a data entry position with a medical billing program. Norman was a bit skeptical, but she signed up anyway and paid the program's $150 fee, charging it to her credit card.

"It looked like a legit program; it had all the forms and documents you'd need and even asked how you'd like to be paid," says Norman, who lives in Jacksonville, Fla.

After waiting two weeks for her first client, Norman got suspicious of the "too good to be true" program. She called the office several times to find out the status of her membership and was told there was a delay with the doctors. Then the office number was disconnected. She'd fallen for one of the more popular scams around today -- crooks masquerading as a medical billing service.

"In the back of my mind I knew that this could be a scam. I told myself not to rely on it," she says. So she followed her instinct and paid with a credit card rather than cash or a check. When she learned she'd been scammed, she stopped payment, and her credit card company refunded the charge in full.

If it sounds too good to be true . . .
There are so many of these scams out there," says Millie Szerman, author of A View From the Tub, a book that details the best ways to work at home. "Everyone wants to get rich today and people take advantage."

Some of the more popular scams are stuffing envelopes, assembling products and medical billing. Szerman warns that you should be skeptical of charismatic speakers who have group meetings to teach you how your small investment can pay off big.

"These people are professionals," she says. "They [entice] you to go listen in a group and get you excited thinking 'I can do that'." Then you plop down your money, and you become a victim."

Check out this example of bogus job ad.

Here's how to recognize a scam, the questions to ask before you join any home-based business, and what to do if you are a victim.

Spot a scam

• If the ad has a lot of CAPITALIZATION and exclamation points, warning flags should go up in your head. This type of advertising is drawing your attention to something that you should probably ignore.

• If they say you can make a lot of money with little work, don't buy it.

• If the ad is not clear, doesn't give details or doesn't detail the business, then you're probably looking at a con.

• If you have to call a 900-number for more information, you're being scammed.

Before you sign on the line

• Ask for references. Talk to other employees or members about their experiences with the company. Szerman suggests that you make a list of very specific questions to best determine the upside and downside of the job. Be wary of references the employer gives you, as some companies will pay people to talk nicely about them.

• Find out how you will be paid. Are you paid by the hour, the number of envelopes you stuff or given a flat fee? Is the payment as good as promised in the ad?

• If you're required to recruit other members, this may be an illegal pyramid-marketing scheme. Don't sign up if you have to drag others along with you.

• Get the specifics in writing.

• If you're going to a group meeting to learn about an opportunity, Szerman says leave your checkbook and credit card at home. Allow yourself to think about it. And if they are pressuring you, leave.

• Learn from Norman's example. If you have to pay, don't give cash, checks or money orders. Use your credit card so you are protected.

If you get scammed

• Call the Better Business Bureau and file a complaint. The Better Business Bureau is doing its part to crack down on these scam artists. "Operation Job Fraud" is an ongoing joint effort between the BBB and the United States Postal Inspection Service to alert people about the work-at-home schemes.

• You should also file a complaint with the National Fraud Information Center at (800) 876-7060.

• Contact the attorney general in the state where the scam is based. And if the ad arrived in the mail, contact the postmaster general.

• Check out the Federal Trade Commission Web site for more information on avoiding and reporting scams.

Con artists get rich by taking the cash of trusting folks willing to invest in a dream. When going into any work-at-home business, trust your instincts over some smooth-talking stranger's hard sell.

-- Updated: Nov. 8, 2002