How to spot a work-from-home scam

Many people pounce on job listings or ads promising to allow them to work from home and make extra cash. These opportunities can feel like a much-needed lifeline, whether you’re a parent struggling to make ends meet or a retiree looking for ways to supplement your monthly Social Security check.

Unfortunately, these offers are often too good to be true. The businesses rarely deliver on their promises of gainful employment, often after collecting some kind of initial fee that is never returned, leaving hard-working individuals out hundreds or even thousands of dollars. 

Popular work-from-home scams include everything from envelope stuffing, medical billing, and rebate processing.

Earlier this year, a Houston, Texas, woman reportedly lost $1,825 in a mystery shopping scam. A seemingly legitimate business sent the woman a $2,000 check with instructions to deposit it into her bank account and purchase several $500 gift cards.

By the time she purchased the gift cards and sent them to the scammer, the $2,000 “check” she deposited into her account bounced, and she was left $1,825 in the red.

There are plenty of trustworthy sites out there that actually do allow people to earn extra income from home. But it’s important to be able to tell the real deal from a scam. 

Here are signs the work-from-home business is too good to be true:

1. They won’t tell you how much you’ll be paid or what your job duties will be.

2. They don’t provide an employee disclosure statement. By law, businesses must provide potential employees with a letter identifying the company, and informing you of any potential lawsuits or legal actions they are involved in.

3. They can’t back up their salary claims. Under the same FTC rule mandating a disclosure statement, the company should provide some kind of proof supporting claims of potential earnings. 

4. They won’t tell you the upfront costs of participating, and they require some kind of payment upfront. You should never give your financial information over to a company before you verify its legitimacy.

5. They have a bad rap sheet online — always do a web search of any company offers before you take them at face value. If it is a scam, chances are other people have called them out online or reported them to consumer agencies like the Better Business Bureau or FTC.

Are there any legitimate ways to make extra income while working from home? Check out this list of 15 legitimate businesses that allow you to work from home.

MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.


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