Scam Method – Making Money the Easy Way

Work-at-home

The ad says you can make lots of money working from the comfort of your home. But if this were true, wouldn’t we all be working at home?

Stay safe. Be Informed.

• Know who you’re dealing with. The company may not be offering to employ you directly, only to sell you training and materials and to find customers for your work.
• Don’t believe that you can make big profits easily. Operating a home-based business is just like any other business—it requires hard work, skill, good products or services, and time to make a profit.
• Get all the details before you pay. A legitimate company will be happy to give you information about exactly what you will be doing and for whom.
• Find out if there is really a market for your work. Claims that there are customers for work such as medical billing and craft making may not be true. If the company says it has customers waiting, ask who they are and contact them to confirm. You can also ask likely customers in your area (such as doctors for medical billing services) if they actually employ people to do that work from home.
• Get references for other people who are doing the work. Ask them if the company kept its promises.
• Be aware of legal requirements. To do some types of work, such as medical billing, you may need a license or certificate. Check with your state attorney general’s office. Ask your local zoning board if there are any restrictions on operating a business from your home. Some types of work cannot be done at home under federal law. Look for the nearest U.S. Department of Labor in the government listings of your phone book.
• Know the refund policy. If you have to buy equipment or supplies, ask whether and under what circumstances you can return them for a refund.
• Beware of the old “envelope stuffing” scheme. In this classic scam, instead of getting materials to send out on behalf of a company, you get instructions to place an ad like the one you saw, asking people to send you money for information about working at home. This is an illegal pyramid scheme because there is no real product or service being offered. You won’t get rich, and you could be prosecuted for fraud.
• Be wary of offers to send you an “advance” on your “pay.” Some con artists use this ploy to build trust and get money from your bank. They send you a check for part of your first month’s “pay.” You deposit it, and the bank tells you the check has cleared because the normal time has passed to be notified that checks have bounced. Then the crook contacts you to say that you were mistakenly paid the wrong amount or that you need to return a portion of the payment for some other reason. After you send the money back, the check that you deposited finally bounces because it turned out to be an elaborate fake.

Pyramid schemes

The pitch is that you will make money by paying to participate in the program and recruiting others to join. But if it’s really a pyramid, you and your friends will lose money, not make it.

Stay safe. Be Informed.

• Plans that promise profits mainly for recruiting new members are illegal pyramid schemes. In legitimate multilevel marketing plans, profits come primarily from selling goods and services to consumers.
• Be aware that some pyramids are disguised as “gifting clubs.” New recruits give money to current members with the promise that they will receive money from future recruits.
• Know that all pyramids are doomed to collapse. That’s because it’s impossible to keep on getting fresh recruits who will pay to participate.
• Legitimate multilevel marketing plans only succeed if they offer products or services that customers want. All successful businesses depend on repeat sales. If there isn’t constant demand for the products or services, the business will fail.
• Sales to other distributors don’t count. Legitimate multilevel marketing plans aren’t based on sales to distributors. Profits should come from sales that you and any distributors under you make to the end-users.
• Be wary of big earnings claims. No one can guarantee how much you’ll make. That depends on how hard you work and whether consumers like your products or services. Many people who work in multilevel marketing do it part-time to supplement their other income.
• Check it out before you commit. Get all details in writing, and contact your state or local consumer protection agency for advice. In some states, multilevel marketing companies must register with the government and comply with other requirements.
• Don’t buy more supplies than you need. Some fraudulent companies try to force distributors to pay for more products than they can reasonably sell.

Investment scams

Whether you have a little money or a lot, you’d probably like to have more to “feather your nest.” But your money could fly away if you get caught in an investment scam.

Stay safe. Be Informed.

• Don’t believe claims that there is no risk. There is always risk in investments, and no one but a con artist will tell you otherwise. Know the risk before you invest.
• Beware of promises that you’ll make big profits fast. No one can accurately predict how an investment will do. Often the investments that promise the most pay-off are also the most risky.
• Get the details in writing. Legitimate companies will be happy to give you all the information you need.
• Don’t agree to anything on the spot. Pressure to act immediately is a danger sign of fraud.
• Understand your investments. Do you know the difference between stocks and bonds, margin accounts and cash accounts, options and futures, mutual funds and certificates of deposit? If not, do your homework before you invest.
• Don’t act on testimonials from strangers. Someone who appears to want to share a friendly tip about a great investment opportunity may actually be a con artist trying to lure you into an investment scam.
• Be especially wary of investments in commodities. Crooks often promise that the value of investments in coins, precious metals, artwork, oil leases, gemstones, and other commodities will rise. The truth is that the value of these types of investments can go up or down significantly.
• Steer clear of “offshore investments.” These are often promoted as a way to avoid taxes. Actually, you are still liable for taxes, and the investments themselves are usually very risky.
• Be cautious about emails for investments. Many unsolicited emails are fraudulent.