Monday, February 11, 2008

How to avoid a work at home scam, Part 1: Do your research

Photo by ToastyKen

Have you ever fallen for a work at home scam? I have. Or rather, my DH has. And I was right there over his shoulder. We didn't lose huge sums of money because we cut our losses early. But when you have three little mouths to feed, every cent counts.

So when I decided to become a work at home Mom, I promised myself that I would be more careful. I joined several work at home forums and discovered that there are ways to protect ourselves from work at home scams. This is a synthesis of the advice and information I received from the lovely women in

Ask yourself three questions:

Is the company asking you to pay first to make money later?

Be wary of a company that requires payment in order to give you a job. An example is a company recruiting data encoders to work at home that requires you to pay a joining fee before giving you the job. Raw materials for assembling products, promotional materials, and even your training should be paid by the company, not you.

On the other hand, if you are considering a home business, then expect to make a small investment. Direct selling companies, for instance, typically require a small fee for membership or a starter kit. The fee can range anywhere from under US$20 to under $500. This is true even for large direct selling companies such as Avon, Shaklee, and Pampered Chef.

Is the company making outrageous claims?

Think twice before believing claims that are too good to be true, such as earning a six-figure income on one hour of work a week. Don't expect to get something for nothing. Any successful business requires hard work, pure and simple. When you're just starting a business, it will often require more work hours than a typical office job.

Is this a legitimate company or business?

Doing research on a company or person before joining their business is the most basic way to protect yourself from scams. In DH's case, he jumped into an "internet business opportunity" because it was recommended by a trusted colleague. He went against his better judgment and dove in before finding out more. Don't make the same mistake: investigate everything, even if your mother herself recommended it to you.

The Internet is filled with tools for researching a company or person (which I'll refer to as "the company" for simplicity). Here are 10 websites you can use:

1. The company's website - Begin by looking at the company website. Scammers can have very professional-looking websites; don't let that fool you! Do use the information in the company's website to check out the company's claims and information. But don't stop there....

2. - A simple search could bring up feedback about a company, such as in blogs or forums. You may also find cases filed against the company.

3. - Enables you to do a reverse search on a company's address and telephone number. If these don't match what is in the company's website, then you should start getting suspicious.

4. - Gives information about a particular domain, such as who owns it, how long it has been in existence, and the owner's address. On the other hand, if the domain's owner signed up for domain privacy, then only the company's web host information will be displayed.

5. - The Better Business Bureau gives a detailed report about its members, including how long it has been a member of BBB, the number and types of complaints that have been lodged against it, and whether the company has a satisfactory record.

7. - Not quite as informative as the BBB website, but worth checking out if you're considering joining a direct selling company. Being a member of the Direct Selling Association means that a company has passed the DSA's rigorous screening process.

8. - Has a "Wayback Machine" that shows you what a website looked like in the past. Think hard about joining a new or start-up company that might be relying on your investment for its seed capital.

9. - Allows you to see if other websites contain exact text from the company's website. You might be surprised with what you see! You'll have to decide, though, who is plagiarizing whom!

10. - Alerts you of various types of scams, including those annoying email scams. Type the company's name in the search form to bring up reports about it, if any.

Coming soon: "How to avoid a work at home scam, Part 2: Use reliable work at home leads"

Meantime, check out these other resources:

Watch how Chris Durst of Rat Race Rebellion investigates a job lead and discovers massive "webnapping":

For a step-by-step guide on how to use some of the tools discussed above, including a worksheet, download this free Ebook entitled, "How to Investigate Home Business Opportunities: The Consumer's Guide to Avoiding Scams".

Also check out the Scambusters website for more information on specific scams.

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itsy said...

Yet another high quality post, Lolly is loving her 'mini me' desk from your previous post. Having all these tips in one place is a great resource and I will be linking to it as much as I can. Following on from 'information overload'. How about a 'how to organise your bookmarks, files and subscriptions article... If I put it on my to do list it will languish and my blog is suffering from lack of direction and needs a focus, something else for the list!
Keep writing like this - It certainly shows that you are enjoying your change of life style.

troy said...

Avery interesting and informative post. I am sure i will start to read this blog on a regular basis. I also subscribe to a research it first theory, but I also realize time is valuable and I don't mind buying other people's research if I need to. The first example is paying for the survey site listings...depends on the effort you put in as to whether its worth it or not. thanks for the listen

Lexi said...

@cait: thanks for stopping by again! i'm glad you liked the illustration from the previous post. and hey thanks for the article topic suggestion. i've included it in my list of topics.

@troy: thanks for your comment and i hope you'll subscribe to this blog! great idea about paid site listings. is there one that you use on personally?