Ready to work from home, be your own boss, and make a great income? That’s what some scammers promise people when selling work-from-home businesses, also known as “business opportunities.” These schemes all have one thing in common: something must be purchased before work can begin. In most cases the purchaser is out thousands of dollars and left with a “business” that generates no profits.
Red flags
Very few people ever earn any income from the businesses for which they paid thousands of dollars. If you are considering a work-from-home opportunity, watch for these common red flags:
- The opportunity comes from a telemarketer, email, or website
- Promising you will earn a lot of money fast with little work
- Promising a money-back guarantee but not stating the time limits of the guarantee
- Asking for money to pay for a background check, starter-kit, software, membership, training, or “discounted” merchandise
- Asking you to move or accept money on behalf of the “employer” or someone else
- Telling you that you already own a website or domain name that you do not recognize
- Telling you that someone is interested in buying a domain name or website that you already own
- Not requiring or recommending any experience or skills
- Extremely short or no interview
- Seeking credit card or financial/account information as a pre-condition for an interview or employment
Protect yourself
Don’t pay money for a job opportunity. If a work-from-home or internet-based business demands that you pay money upfront in order to make money in the future, it is most likely a scam. Remember: in a legitimate job, the business pays you. In a job scam, you pay the business.
Try entering the company’s name with the words “complaint,” “reviews,” or “scam” into a search engine. Read what others have to say. But remember: just because there aren’t complaints doesn’t mean the company is legitimate. Dishonest companies often change their names, post fake reviews, or move to avoid detection.
Arizona law provides special protections against work-from-home scams
Sellers of business opportunities are required to provide you a written statement that contains specific, written disclosures. This includes detailed information about what you are purchasing and any recurring fees you will or may be asked to pay. In addition, business opportunity sellers must maintain a $100,000 bond with the State Treasurer. This bond money can be used to refund consumers who are defrauded by the seller. You can see if a business opportunity has a bond on file by contacting the State Treasurer’s Office at (602) 542-7800. However, keep in mind that even if a business opportunity has a bond on file, if it’s a scam, you might be able to only recover a portion of what you paid. Don’t pay money for a business opportunity.
Think carefully before signing a contract. Your agreement online may count as an electronic signature and bind you to the contract. If you make a purchase and later change your mind, you may cancel a business opportunity contract for any reason at any time within 10 business days after the contract is signed. You must do this in writing to have proof of cancellation! Do not allow sellers to string you along past the cancellation period.