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Online Scams to Start Your Own Business - What Should You Look Out For?

work at home

Here’s the catch: The current COVID-19 pandemic has led many to seek employment from home.  Online ads, emails, text messages, and calls offering opportunities to start your own online business with minimal effort and promises of high earnings are attractive. Unfortunately, most of these job offers are fraudulent. 

Fraudulent At-Home Business Opportunities

Many of these scams are attractive because they claim you can make money with little to no experience necessary.  Interested respondents are often pressured to purchasing online coaching sessions, materials, software and other services to get the business rolling. Once you get started you won’t advance or make the money originally offered unless you pay for more services.  After paying, respondents are often left in debt with little or no recourse to recover their money.

Other work from home offers claim you can make money completing task like internet searches on prominent search engines (such as Google) and filling out forms. They require you to pay a fee for information. Once you pay, you discover the company is not affiliated with Google, or any popular internet search engine and the scammers are only out to get your financial information.

With so many desperately looking for employment from home and so many scams around, not checking out an offer thoroughly can be costly. Oftentimes those that are defrauded by work from home scams become identity theft victims. The time it takes to recover from this can be extensive and expensive.

Kim’s Advice: In light of the recent pandemic, millions find themselves out of work and uncertain about their financial future. Scammers know this and are taking advantage of those looking to work from home by offering bogus internet business opportunities.  Recognizing the warning signs of a scam can save you time, money and peace of mind.

How to Recognize the Warning Signs of Fraud

If you are required to pay a fee to start a job that is a clear sign it’s a scam.  Opportunities to make big income that include giving your credit or debit card information or paying a fee even with a “money-back guarantee” are reason enough to reconsider the offer.

Research the business by searching the internet for reviews and complaints. Check with Business Consumer Alliance for background information on a business. Other places to look for information are the state Attorney General offices and local consumer protection agencies, and the Federal Trade Commission.

It’s important to learn all the information you can about the offer. If the associate is not forthcoming with information or the details are vague or missing, walk away. Under federal rules, business opportunities must disclose key information about the offer. Some of the information that must be included is:

  • If the business has been involved in legal actions (civil or criminal), within the last 10 years.
  • Information regarding cancellation or refund policies.
  • Earnings disclosures.
  • References of at least 10 people who have purchased the business opportunity from them.

The business should make it clear what tasks you need to perform and the steps involved. You should know who will pay you and how you will be paid. Costs associated with the opportunity including supplies, training materials, membership fees etc, should be provided and details about what you will get for the fees paid. If the business claims you will make a certain amount of money a separate document called an EARNINGS CLAIM STATEMENT. Use the information and compare it to what the seller is claiming you’ll make. If the numbers don’t add up, it may be a good idea to walk away from the offer.

Alert Business Consumer Alliance About Online Scams

While you may be eager to embark on an opportunity to start your own internet business, don’t feel pressured to act before you’ve done your homework. If you do run into a scam make sure to alert BCA so others can be warned. You can also report fraud to your state attorney general and the FTC.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.