There are some excellent work-from-home opportunities where people can successfully use their skills and experience to take on a new challenge or to build a business. There are also some ruthless people who are looking to draw home workers into a money-making scheme of their own. As a result, the growing popularity of working from home means that there is also an increasing number of scammers looking to exploit the unwary.

Like freelancing or owning a business, working from home can be more volatile than a steady job. It can take considerable time to build up a clientele and a constant flow of work. In the beginning, there are likely to be slow periods, and the temptation can arise to find shortcuts to fill in the gaps, and this is where crucial judgment errors are most likely. Looking for work from home is a skill in itself and recognizing a work-from-home scam can save a lot of time, pain and money.

Home workers need to get good at identifying scams by becoming familiar with their common traits. In this guide we look at why working from home can make home workers vulnerable to these scams, how scams can affect their lives, how to spot and avoid suspected scams and we also look at some resources to help workers stay safe.

How Common are Work-from-Home Scams?

Work-from-home scams are more common than most people think. It is a huge area of opportunity for the scammers to operate in as the Internet allows for a high level of anonymity This makes for a perfect environment where dubious business practices can be difficult to identify.

Before the Internet, when someone was looking for work from home, they would go to an office and speak with a manager. Jobs were few and far between but they were mostly genuine. Now, anyone with a computer can pick up an email or follow a link from a website and find themselves drawn into something about which they will get little hard information. And while it’s important to stay vigilant against work-from-home scams, young people also have the other options for building their financial future, such as investing

Typical Scams for Home Workers

The range of scams is restricted only by the imagination of the scammers, so there are unlimited possibilities. Some of the most common include:

Envelope Stuffing

This scam has been around since long before the internet, but since then it has grown exponentially and there are plenty of variations. Typically the scammers ask for a payment, say $50, as a “registration” or “start-up” fee. If they reply at all, they send a starter pack with instructions to put flyers into envelopes and send them on. In fact, all the flyer does is to invite people to join an envelope stuffing scheme. If anyone actually replies and pays their $50 start-up fee, the worker is supposed to get a commission for their efforts, but usually, the scammers will not pay up and can not be found.

Craft Assembly

The worker pays their $50 and gets sent some materials (about $10 worth) and instructions, with a promise of $100 for each correctly assembled item. However meticulously made, when the first one is sent back, the scammers reply that it was not correctly assembled. For every subsequent item, the response is the same. Eventually, the materials run out and the scammers offer the chance to buy some more.

Typing

The worker responds to an ad for work as a typist. They send in a fee and receive instructions on how to place ads, in which they, in turn, invite people to send a fee and sign up as work-from-home typists!

Setting Up a Business

The scammer offers, for a fee, essential information and introductions to clients who will make a small business successful. In reality, what they send turns out to be an out-of-date list of organizations that have little interest in paying for anything that the new business wants to offer.

What Makes Home Working Such a Target?

People looking for work at home are no more likely than anyone else to fall for a scam. Every day, people from every walk of life are falling for sophisticated and innovative scams. But there are good reasons why scammers look to the work-from-home market as a fruitful field. Not all people wanting to work from home are vulnerable, but there are some particular groups that the scammers want to target with a higher success rate.

Retired People

Older people often find that life is more expensive than they had anticipated, or that they are more bored than they expected to be, so the idea of making a little extra money at their own speed, without having to learn any complicated new skills, can be very appealing.

Sick and Disabled People

People whose health or mobility restricts them from going to a traditional workplace still need an income. In fact, they often need a bigger income because their needs are more expensive. Working at home can seem the ideal solution.

People Out of Work

Many people who lose their jobs find themselves having to consider lower paid work. When their income is suddenly reduced they notice, as never before, how expensive it can be getting to and from a place of work. Not unreasonably, they think about working from home and cutting out those commuting costs.

New Parents

Parents at home can find it very difficult to get work that fits in with their childcare needs. Working at home can seem like the ideal answer. They are available when their children need them, and they can seize the moments when infants are occupied or asleep to earn some much-needed money.

In short, a higher percentage of people looking to work from home are, if not more desperate, at least more pressurized, and may well lack the qualifications, contacts, and experience to set up meaningful work of their own. Not every home worker fits that description, by any means, but it explains why scammers work in this area.

What Can Happen as a Result of a Scam?

As well as the waste of precious time, there are two main danger areas for victims of scams.

Risks to Money

The most obvious risk that is faced by someone who falls victim to a scam, is that they lose money. In most cases, this will be initially a relatively small amount, but it can build up over time. Scammers have a knack of drawing a victim in like a gambler, raising the stakes in the hope of retrieving an initial loss. They also tap into everyone’s strong desire not to be taken for a sucker, which drives a subliminal conviction that the activity must surely work in the end.

So the scammer will pocket the original payment and then, when the promised rewards do not materialize, persuade the victim that the fault is their own for not trying hard enough or not have invested enough, to persuade them to part with more money.

Risks to Identity

Less immediately obvious, but certainly more dangerous, is the information that someone might give to the scammers that can enable them to perpetrate identity theft.

A typical example would be that a victim receives an email saying that a company has spotted their résumé online and wants them to apply for a job working from home. The chances are that at some time they have submitted an application online, so it does not seem so far-fetched. They are invited to respond to the bogus job application giving many personal details, including date of birth, address, education, experience, Social Security number, and possibly even bank account details.

The scammer can then use these details to set up a fake identity based on this profile to take out loans, ambush a cell phone account, and conduct fraudulent transactions. They may even be able to access the bank account and steal money.

How to Spot a Work-at-Home Scam

Spotting a scammer is a bit like spotting a chameleon. Scamming is big business and attracts some twisted but clever minds. It is constantly evolving and finding new ways to disguise itself. So there are not many ways to be absolutely sure that an attractive-sounding offer is not a scam.

On the other hand, scamming seems to rely on exploiting some basic human traits:

  • Trust. Normal human interaction assumes a level of trust. Despite the number of liars and rogues everyone has to deal with, it seems humans are hard-wired to have a preference to trust.
  • Optimism. Most people have an instinctive belief that things will work out for the best.
  • Instant gratification. Being human means having a gift for finding the quickest and easiest way to achieve an objective. This naturally translates into choosing to do something that promises greater rewards for less effort. It is a characteristic of all people that scammers exploit.
  • “Nothing to lose” fallacy. Scammers often target the people who are most likely to be down on their luck. Many people in that situation can think that they have nothing to lose by giving something a try. All too often they discover, too late, that they actually did have something to lose.
  • Confusion under pressure. Legitimate sales teams use the same tactic—assure a customer that the deal on offer will not be available tomorrow so that the decision has to be made quickly. Scammers take this to a whole new level.

So here are some indications that might flag up a potential scam:

They ask for money upfront

This is one of the most likely indications of a scam. It appeals to the gambler instinct in many people — to pay a little now in the hope that there will be untold rewards as a result. The cost may seem justified for the starter pack that they promise to send, but those who are tempted should ask themselves why any genuine business would need to make that demand.

They give little contact information

Very often there will only be one point of contact with the organization. It might just be an email address or a cell phone number. If the person making the contact does not provide a proper business name and address, some information about the directors, and the scope of their work, they should be treated it with suspicion, however plausible they sound.

They make it seem so easy

It’s an old adage, but it is one of the best. If a deal seems too good to be true, then it probably is. The reality is that people do not get a lot of money for doing things that require no particular skills or experience.

How to Avoid a Suspected Scam

Anyone who comes across an attractive offer of work from home should follow some basic steps:

Stop and Think

No one should be taken in by a suggestion that the offer will not be available tomorrow.

Switch on the Skepticism Gene

The offer appeals to many strong instincts. The best weapon against it is to play down the natural response of excitement and to start doubting.

Research

The scammers use the internet for their own ends, but it can be used against them.

  • Search for the business name, remembering that there may well be a legitimate business whose name the scammers have stolen. Check the contact details that have been given to confirm their authenticity. If you are provided a phone number, verify it independently as one operated by a legitimate business. And if it checks out, ring them and make sure they were the ones that sent you the information.
  • If the approach was through an email with a distinctively worded heading or a funny sounding phrase, copy it and search for it (using quotation marks to get the exact phrase).
  • Search for anything related to the offer, just to see what turns up. Often others will have come across a scam that is identical and will have posted their experience online.

Check

Use resources such as the Better Business Bureau or the Federal Trade Commission, to see if the people who made contact are known as a risk.  Carry out a background check through this website on any individual, bearing in mind that a scammer will probably use a false name.

Ask Questions

Armed with this information, go back to the people who made the approach and ask them for a lot more information about themselves and their customers. A legitimate business will be happy to answer such questions and to show where examples of the work they do can be found.

Play Safe

If, at the end of the process, there is any remaining doubt, walk away.

Weighing It All Up

There is absolutely no reason why working from home should not be a success. Every year, thousands of people take up the challenge with very good results, and the internet has put a much bigger world at everyone’s disposal. But success will depend on an individual’s own resources, including the capacity to think clearly and to steer clear of some of the predators at large in today’s online world.

By keeping the mind clear and the antennae alert, anyone stands a good chance of discovering the new freedoms that work-from-home can bring.