5 Work-at-Home Scams to Avoid

5 Work-at-Home Scams to Avoid

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For some, working at home is a dream. For others, it’s an opportunity to defraud those dreamers. Work-at-home scams pop up everywhere—in your email, on social media, possibly on the ads on this page (see the disclaimer below).

Be careful, but don't lose heart. You can find a job working at home, but you have to know the signs of a scam and beware of these 5 all-too-typical scams.

Work-at-Home Scam #1: Home Assembly and Envelope Stuffing

Woman With Envelope
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Let me be completely clear: Envelope stuffing and “home assembly” of products are always scams. Unlike some of the other opportunities explained in this article, there are no instances when this is a legitimate opportunity. So just avoid them.

An add-on scam to this one is when the company offers bonuses for you to sign up others doing this bogus work. This is typical of a pyramid scheme, and since there is no real income to be earned in the first place, it will collapse. Read more about envelope stuffing scams.

Work-at-Home Scam #2: Bogus Business "Opportunities"

Scam Rectangle
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Unlike envelope stuffing schemes, which are all scams, fake business opportunities are much tougher to identify as scams. Because there are in fact some real home business opportunities out there, you have to look very carefully and pay attention to the signs of a scam.  

Building a home business is hard work; it takes a series of steps and costs. When an opportunity is turnkey—you pay a fee and receive a business opportunity—that is highly suspicious. Also promises of big money for little work signal a scam.

These are some typical work-at-home opportunities that are often scams:

  • E-commerce  – These scams offer you a web-based business without actually building a website. You’re the middleman who just collects a fee. Nothing is that easy!
  • Kits, listings, courses, certifications, etc.  – You really can’t know if any of this stuff has any value, but if it sounds too good to be true, it probably is. Also, beware that the fees for this stuff aren’t recurring on your credit card. Read more about business opportunity scams.
  • Medical billing – People do work from home in medical billing, but they have experience and must build their home businesses. Lists of physicians who are looking for medical billing services are worthless. Read more about medical billing scams.
  • Rebate processing – Typically these bait-and-switch scams ask for a fee of up to $200 for everything you need to make money filling out online forms. If you’re lucky, you get a bunch of useless information that could be had for free elsewhere. If you’re not, you could be duped into a scam where you spend your money to process rebates but are never reimbursed as promised. Read more about processing rebates scams.
  • Mystery Shopping – Mystery shopping can be legit, but should never pay a fee for it. So if any money is required for leads, companies, registration fees, etc., it is a scam. Read more on mystery shopping scams.

Work-at-Home Scam #3: Phishing/Identity Theft

SocialSecurity Scam
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When you apply for a job, your resume and application contain an awful lot of personal information about you—your address, phone, email address, work history and more. In the wrong hands, this information could be very dangerous.

So you will want to be sure that you are dealing with a legitimate company with a real job. This can be harder to do when you are looking for work-at-home jobs, where you don’t have necessarily have face-to-face contact. Use these 4 tips to avoid identity theft scams.

Work-at-Home Scam #4: Re-Shipping

Shipping Scam
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This scam could not only cause you to lose time and money; you could lose your freedom!

Re-shipping involves receiving goods and then shipping them elsewhere. Often these are stolen goods, and so you are now implicated in criminal activity. Re-shipping may also involve check-cashing scams, in which you are instructed to cash a check to cover your expenses and then wire money to another party. When the check you cashed bounces several days later, the money you wired is gone forever.

Work-at-Home Scam #5: Time Wasters

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While the previous scams mentioned are just out to defraud you, time wasters, on the other hand, are basically legit. Yet in reality, there is no way to actually make enough money for them to be worth your time.  Online surveys, some data entry, and other micro-jobs (though not all of these) are among those that are borderline. You can make small amounts of money if you’re willing to put in the time, but you need to go in with your eyes open.

Often these types of gigs can be structured in a way that you never collect the money you are owed. One common tactic is to make the payout threshold too high. In most micro jobs, which only pay pennies each, companies don’t transfer those few cents right into your bank account when you finish the job. You have to earn a certain amount of money (sometimes within a certain time period), maybe $50, before it is transferred. If you realize this is not worth your time and stop working before you reach that amount, you are never paid.

Also, you have to look out for PayPal fees that can eat into your profits and any place that pays you in bitcoins, which you may never be able to redeem.