Work at Home Schemes

November 1996

Produced in cooperation with the North American Securities Administrators Association

Want to earn hundreds of dollars a week -- at home in your leisure time? Many people supplement their income in a very easy way. Let us tell you how...

Ads like these can be found in newspapers and magazines in every American city. While you may find such offers appealing, especially if you can't work outside your home, exercise caution. While some work-at-home plans are legitimate, many are not. Home employment schemes are among the oldest kinds of classified advertising fraud.

Many ads don't say you may have to work many hours without pay. Or that there may be hidden costs. Countless work-at-home schemes require you to spend your own money to place newspaper ads, make photocopies, or buy the envelopes, paper, stamps, and other supplies or equipment you need to do the job. The companies behind the ads also may demand that you pay for instructions or materials. Consumers deceived by these ads have lost thousands of dollars in addition to time and energy.

Common Work-at-Home Schemes
Several types of employment are classic work-at-home schemes.

• Envelope-Stuffing. Promoters usually advertise that, for a "small" fee, they will tell you how to earn money stuffing envelopes at home. Later -- when it's too late -- you find out the promoter never had any employment to offer. Instead, for your fee, you're likely to get a letter telling you to place the same "envelope-stuffing" ad in newspapers or magazines, or to send the ad to friends and relatives. The only way you'll earn money is if people respond to your work-at-home ad.
  
• Assembly or Craft Work. These programs often require you to invest hundreds of dollars in equipment or supplies. You also may be required to spend many hours producing goods for a company that has promised to buy them. For example, you might have to buy a sewing or sign-making machine from the company, or materials to make items such as aprons, baby shoes, or plastic signs. However, after you've purchased the supplies or equipment and performed the work, fraudulent operators don't pay you. In fact, many consumers have had companies refuse to pay for their work because it didn't meet "quality standards." Unfortunately, no work is ever "up to standard," leaving workers with relatively expensive equipment and supplies, and no income. To sell their goods, these workers must find their own customers.

Exercise Caution
Legitimate work-at-home program sponsors should tell you -- in writing and for free -- what's involved. Here are some questions you might ask a potential employer:

• What tasks will I be required to perform? (Ask the program sponsor to list every step of the job.)
  
• Will I be paid a salary or on commission?
  
• Who will pay me?
  
• When will I get my first paycheck?
  
• What is the total cost of the work-at-home program, including supplies, equipment, and membership fees? What will I get for my money?

The answers to these questions may help you determine whether a work-at-home program is legitimate and guard against financial loss.

You also might want to check out the company with the consumer protection agency and the Better Business Bureau in your own area and again where the company is located. These organizations can tell you if they have received complaints about the work-at-home program that interests you.

Where To Complain
If you have spent money and time in a work-at-home program and you now believe it may not be legitimate, contact the company and ask for a refund. Let the company know you plan to notify officials about your experience. If you can't resolve the dispute with the company, here are some organizations that may be able to help you:

• The Attorney General's office in your state or the state where the company is located. The office will be able to tell you if you're protected by any state law that may regulate work-at-home programs.
  
• Your local consumer protection offices.
  
• Your local Better Business Bureau.
  
• Your local Postmaster. The U.S. Postal Service investigates fraudulent mail practices.
  
• The advertising manager of the publication that ran the ad. The manager may be interested to learn about the problems you 've had with the company.

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