Work-At-Home Come-Ons Are Often Too Good To Be True
While some work-at-home plans may be legitimate, many are not. Home-employment schemes are one of the oldest classified-advertising frauds. Con artists can be found everywhere and market their products through direct mail, in magazines, and over the Internet, among other places. As you have found, entrepreneurs are being bombarded daily about “extraordinary business opportunities” through mass mailings, classified ads, seminars, informational demonstrations, telemarketing, TV and radio infomercials, and trade show booths. The problem is separating the legitimate ventures from the outright scams.
The offers are usually too good to be true and contain statements like, “Make easy money, even while watching television in your own home! Make money so fast you can hardly count it… have the time, freedom, and money that most people never have working for someone else! Accept this exclusive invitation… only a limited number of men and women in this area will be allowed to share in this exciting business opportunity… make people line up and beg you to take their money.”
Key words and phrases found in most of this type of advertising usually promise a thriving market that will bring extraordinarily high returns for very little investment or effort almost immediately.
Look for these tip-offs to fraudulent work-at-home schemes: Promises of un-realistically high profits; claims of a high market with great demand for the product or service; the “no experience is necessary” statement and the “exclusive invitation” offer.
A common scheme is an advertisement that entices entrepreneurs to pay a high fee to receive information that usually can be found, free of charge, in any public library.
State and federal regulators report that the largest categories of fraudulent or troublesome enterprises involve the following:
- The purchase and installation of coin-operated machines.
- Highly specialized home businesses such as ostrich farming, customized computer software, clearance (liquidated) merchandise, gemstones, or precious metals.
- Person-to-person direct sales of unproven and weakly regulated products.
- Anything new or unfamiliar in the telecommunications industry.
The companies often do not tell you about the up-front investments and hidden costs involved, such as buying the envelopes, paper, stamps, and other supplies required to do the job. Some people who have invested money in product-assembly kits are told their work is unsatisfactory when they return the finished products. Both money and time are wasted, and only the company gets rich selling its bogus kits.
Several companies hold seminars and “informational demonstrations,” like the one you recently attended, in large hotels to sell business opportunities. Their presentations and materials are very professional, promising money-back guarantees and company support.
The company usually wants a decision before you leave, along with an up-front investment (anywhere from $150 to $5,000). They urge you to act quickly¡ªtoday¡ªbecause your opportunity might vanish or it might, in their words, “cost you more each day you delay.” Some companies have organized home-based business associations that make their activities appear like friendly nonprofit support systems.
Their advertisements and infomercials tout glowing success stories, but typically very few consumers who purchase their business opportunities earn a substantial income or even recoup the costs of the upfront investment. Money-back guarantees may or may not be honored, and in most situations continued company support is nonexistent.
First, ask specific questions about what you will be responsible for and how you will get paid and by whom. Ask what supplies, equipment, or membership fees are required. Specify that you want these answers in writing.
Next, ask for a copy of the presale disclosure document. The Federal Trade Commission (FTC) requires that sellers of business opportunities, including franchises, provide information on 20 items, including names and phone numbers of other franchisers. Ask your business attorney, accountant, or both to review this contract and answer questions you have about the details of the agreement.
Then ask for the names of others who have purchased the company’s home-based business opportunity. Be aware that the names the company gives to you might be insiders who work for the company. Therefore, personally check out their operations and observe them in action. Inquire about their annual sales and net sales. Ask if you can see their business records.
Check several different sources for information about this home-based business opportunity. The company may list memberships in trade groups and chambers of commerce to make it appear legitimate, so search beyond this list. Here are some additional agencies and organizations that can assist you:
The Better Business Bureau (BBB) can tell you if this company has had complaints registered with it. Be aware that the BBB might not have information on new companies or those that operate under a variety of different names. The attorney general’s office in either your state or the state where the company is located can tell you if you are protected by any state law regulating work-at-home programs.
TriVita, Inc.trivita began with a vision – a vision of a world with less disease – a world where everyone has the opportunity for greater health and well-being. This vision, the dream of TriVita founder, Michael Ellison, was partnered with the understanding that true health can only be achieved when people seek and discover physical, emotional, and spiritual well-being.
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Gary Giardina
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