Even if you are anxious about the risk involved in starting your own business and you are tempted to sign up for one of the many “work at home” startup offers you see, you should reconsider. The offers that you see advertised on social networks and Craigslist are almost invariably scams, and thus pose a great deal of financial risk.
The problem of work-at-home scams is increasing. To address this issue, the web giant Google launched a legal battle late last year against more than 50 companies that allegedly infringed upon the Google name to promote “work-from-home” scams. Their lawsuit came less than one month after a separate class action complaint was filed against one of these companies for a work-at-home scheme.
A scam refers to any deal that wants some sort of cash payment before you can start making money. Typically you need to pay a registration fee or buy a starter kit, training materials, or a database of hot leads. Any organization that requires money upfront should raise suspicion; legitimate businesses will not require you to pay so that you can work for them.
If you are still tempted to try out a work-from-home offer, there are several things you should consider before you commit:
- Contact the company. Try to find out the company name and contact information. If there is only an email address, they are likely not a legitimate business. Test the contact information. If it’s an 800 phone number, listen to see if the ringing tone changes while you’re waiting to be connected: that is an indication that their calls are diverted to an overseas base.
- Ask for an interview. Most legitimate companies would not hire someone based only on an e-mail but would require a face-to-face or phone interview. If the company does not require an interview, as a potential employee or contractor, you have a right to ask them why. You can also ask them what kind of screening process they use for their employees if they do not interview them.
- Check company location. If the company is overseas or has no location specified, this should raise doubts. Beware of companies or individuals overseas who ask you to cash money orders or checks and offer to let you keep a portion as these are always scams. If they provide an address, perform an address lookup to determine its legitimacy.
- Research the company online. An Internet search could give you revealing information about the company or may let you know how their scam operates. It is wise to do an Internet search of a company before you begin to work for them or before you send a payment. An Internet search may provide feedback from other people who have been scammed by the company.
- Check posting frequency. Many scammers use an automated spamming program to post jobs repeatedly and throughout different cities. If you notice an ad that is re-posted every day or multiple times a day, this is usually a telltale sign that the post is a scam.
- Pay by credit card. This may sound counter-intuitive but liability for online credit card purchases is usually limited to $50 if you are dissatisfied with your purchase and report the transaction. Some credit card issuers will even waive the $50 deductible.
Under no circumstances should you ever provide personal information to anyone in order to secure a job opportunity, especially sensitive information such as a social security number, bank account information, or credit card numbers. If something sounds too good to be true it probably is and thus you can assume it is a scam.
It is natural to feel anxious about starting a new business but remember that you can actually reduce your risk by beginning your own startup in comparison to the many other low-risk alternatives on the Internet.