The chance to start your own business from home and make a good living sounds like a great opportunity, especially for people are unemployed. Which is exactly why work-from-home schemes continue to vex so many consumers.
The Federal Trade Commission and five states recently agreed to settle a case as part of a broader crackdown on such jobs. Benjamin Moskel helped run The Online Entrepreneur and promoted the "Six Figure Program," an alleged scam in which consumers were led to believe they could set up their own websites and become affiliates of the sites of such companies as Sony, Verizon and Louis Vuitton.
It was pitched as a "no-risk opportunity" that would cost $27, the FTC said. But that was only to get started. After paying the $27, consumers were then told they would have to pay at least another $100 to get their sites set up.
Those who bought in, with the idea they could make up to $15,000 a month from people clicking links on their sites to go to the affiliated sites, got little in return, the FTC said. In fact, many of the sites didn't work, and consumers complained they were unable to get any help from those who ran the operation.
Moskel is now banned from the industry and must pay back the $259,394 he made from the scheme.
The FTC reported collecting nearly 33,000 job opportunity and work from home scam complaints in 2013, accounting for about 2 percent of all complaints the agency fielded.
In work-from-home and job opportunity scams, the only ones who profit are those who sell the schemes to vulnerable consumers. The opportunities are sold with the idea that you can make good money, and it always involves paying money in advance to find out how.
Here are some common pitches to avoid in the work-from-home arena, according to the FTC:
- Envelope stuffing
- Assembling things of doing crafts
- Processing rebates
- Doing online searches
- Medical billing
But if you're considering such a job, be sure to ask upfront how much money you'll have to pay and what you can expect to get for it. Be skeptical of any guarantee of income.