How To Avoid Work From Home Scams

Author: Adam Khan

Homeworking falls into two categories - you can either work as an employee in your own home or you can run your own business and become self-employed. Whichever you choose, before you start it's worth asking yourself a few questions to get an idea of the kind of work which might be suitable.

• Do you have any existing skills or qualifications you can use?
• Do you have any hobbies or interests which you could use as the basis of a business?
• Can you learn new skills to help you earn money?
• Do you have any funds available - e.g for buying materials, stock or training? or do you need to apply for a Business Loan?

Ideas for starting a work-at-home business

Working for someone else

If you are not ready to take the big step of starting your own business, there are companies which offer work from home opportunities. However, beware! Unfortunately, homeworking - due to its popularity - is subject to many scams, rip-offs and dodgy dealers. Generally speaking if a money making opportunity sounds too good to be true, then it probably is! There are legitimate companies who will pay reasonable rates for working from home, but they are few and far between.

Scams

Be especially careful of any companies - both on and off the internet - which request your money up-front - be it for registration, stock, materials, etc.
'Envelope stuffing' can be a classic example - when you respond to a homeworking advert you'll be asked to send a registration fee to receive details about earning money at home by stuffing envelopes for mail order companies.

Sounds good so far - BUT all you'll receive in return for your fee is a letter telling you to put an advert up in your local newsagent or post office, asking people to send you a registration fee. These days all commercial mailings are automated and there is no requirement for homeworkers in the envelope stuffing field.

Another popular con-trick is to offer simple assembly work at home - this can be anything from greeting cards to gifts or crafts, but again you'll probably be asked to pay up-front for materials. You are then likely to find that the materials you receive will be worth a fraction of what you've paid, and when you've finished the assembly or painting work and send it off, you won't receive any payment as your efforts are likely to be rejected and returned to you as 'sub-standard' or 'failed quality control'.

The online versions of the above scams are many and varied, but some of the ones to look out for are: Buying e-books which promise to tell you how to get rich and which turn out to contain very little but instructions on how to resell copies of the e-book you've just bought! Signing up to take surveys or act as a 'mystery shopper' is another job opportunity which should ring your alarm bells if it asks for a registration or joining fee.

Finally watch out for unsolicited emails promising easy work at home 'administrative' , sales co-ordinator' and 'data entry' jobs - these will promise high hourly and monthly rates but will typically require you to send money to train or register and not produce any work and worse still may use your details for fraudulent purposes.

Top Five Scams To Watch Out For

As Britain's economic woes worsen, more and more people are becoming vulnerable to financial tricks and scams. According to the Office of Fair Trading (OFT) an estimated three million people a year fall victim to scams sent by post, text, and email. The organisation fears that this number may rise as more people face financial difficulties.

John Fingleton, its chief executive, said: "Scammers are sophisticated at targeting people who are often the most vulnerable in society." The best way to be sure that you do not fall victim is to understand the tricks the scammers use, which is why the OFT has just launched a Scam Awareness Month, featuring Angela Rippon.

Roy Gainsford, chief executive of the Trading Standards Institute (TSI), said that people should always stop and think when they receive offers that look too good to be true. "We urge you to ask yourself, 'What's in it for them?' "

Here are the top five financial scams and how they can be spotted.

1. Deceptive Prize Draws or Sweepstakes

There are two types of prize draw scam and both are illegal. With the first type, you receive a letter saying you have won a large prize. However, you are asked to send a fee to receive it. If you read the small print, it says you are only being entered into a prize draw.

The second type says that you have won a prize but have to order something from a catalogue to receive it. Again the small print makes clear that you are just being entered into a draw. However, it is now illegal under the consumer protection regulations to say someone has won a prize if they then have to pay to receive it, so if you receive a letter like this, it is a scam.

When someone states you have won a large cash prize it is important to scrutinise the letter. Have you knowingly entered a draw or raffle? Does the letter ask for a fee (look out for phrases such as "processing fee" or "administration charge")?

The OFT estimates that more than 500,000 people fall victim every year, collectively losing £320 million. Victims are often repeatedly targeted.

2. Foreign lottery scams

Thousands of people are told every day that they have won thousands or millions of pounds in a foreign lottery. These letters also say you need to pay an administration fee, but the prize does not exist.

Two of the most common scams involve "prizes" in a Canadian or Spanish lottery. According to the Government's Consumer Direct arm, people have lost over £300,000 as they respond to more and more telephone calls demanding payments to cover costs in order to receive their winnings. The winnings don't exist.

Other warning signs that a lottery letter is not genuine include there being a very short time in which you can claim your winnings, use of premium rate phone lines and an invitation to send money out of the country using a money transfer service.

The (genuine) Spanish lottery known as El Gordo has issued a warning about people using its name under false pretences. If you have not bought a ticket for the genuine El Gordo lottery, you have not won it.

3. Advance Fee Fraud

If you have ever received a badly spelt begging letter or email from someone you have never heard of, it is likely that you have been targeted.

The approach can be made by letter, fax, email or telephone, and usually concerns an amount of money that your correspondent needs to get out of their country. The victim is offered a large sum of money as a reward for helping with the transfer.

Typically, the writer claims to be a senior government official, an accountant with a state owned corporation, or perhaps a relative of a deposed or dead politician. It will probably be marked ''Strictly Confidential'' or ''Urgent'', and offer the opportunity to share in a multi-million pound bonanza.

The correspondent says that he or she wants to use your bank account. If you respond with details you will be sent more documents purporting to show that the money is genuine.

You will then be asked to send your bank details and an ''advance fee'' to speed up the transaction. However, once you have sent the money an emergency will arise and they will ask you to send more. Many letters still refer to Nigeria, but there is a Russian version. Often emails are badly spelt and grammatically incorrect.

4. Work at Home/Business Opportunity Scams

This scam is likely to become ever more popular because of rising unemployment. Typically these scams offer a large income for not very much work, such as envelope stuffing, assembling craft items or other easy-sounding jobs. They offer what sounds like a lot of money for this work and usually stress the advantage of working from home 'when it suits you'.

If you sign up you may find that you need to spend money to make photocopies, take out newspaper ads or buy software. If you buy craft kits and make items you may find the promoter will not pay out because your work does not come up to their standards. You may even find it is actually a pyramid selling scheme and the only money available is for getting other people to sign up.

Legitimate work-at-home promoters should tell you the start-up costs as well as what you get for your money. Check whether you can verify information with other workers, and try an internet search on the company.

5. Investment scams

These are often known as ''boiler room scams'' and involve a cold-caller offering shares or property investments. Sometimes these shares and properties exist, but are worth nothing like the amount suggested by your caller. According to the Financial Services Authority (FSA), it is mostly experienced investors who fall for these scams.

Alarm bells should ring if you are called out of the blue, particularly by a company based overseas. You can see whether a firm is legitimate by checking it against the FSA's register of authorised firms on www.fsa.gov.uk/pages/register. If it is not registered it is not allowed to give investment advice in the UK and should be avoided.

• You can contact the following organisations for advice; For scams in general – Consumer Direct, Tel: 08454 04 05 06; for investment scams – Financial Services Authority, 0845 606 1234.

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