Work-at-home scheme
Encyclopedia
A work-at-home scheme is a get-rich-quick scheme
in which a victim is lured by an offer to be employed at home, very often doing some simple task in a minimal amount of time with a large amount of income that far exceeds the market rate for the type of work. The true purpose of such an offer is for the perpetrator to extort
money from the victim, either by charging a fee to join the scheme, or requiring the victim to invest in products whose resale value is misrepresented.
Work-at-home schemes have been around for decades, with the classic "envelope stuffing" scam originating in the United States during the Depression in the 1920s. In this scam, the worker is offered entry to a scheme where they can earn $2 for every envelope they fill. After paying a small $2 fee to join the scheme, the victim is sent a flyer
template for the self-same work-from-home scheme, and told to post these advertisements around their local area – the victim is simply "stuffing envelopes" with flyer templates that perpetuate the scheme. Originally found as ads in newspaper
s or magazine
s, equivalents of "envelope stuffing" have expanded into more modern media, such as television
and radio
ads, and on the Internet
.
In some countries, law enforcement agencies work to fight work-at-home schemes. In 2006, the United States Federal Trade Commission
established Project False Hopes, a federal and state law enforcement sweep that targets bogus business opportunity and work at home scams. The crackdown involved more than 100 law enforcement actions by the FTC, the Department of Justice, the United States Postal Inspection Service
, and law enforcement agencies in eleven states.
Legitimate work-at-home
opportunities do exist, and many people do their jobs in the comfort of their own homes. But anyone seeking such an employment opportunity must be wary of accepting a home employment offer, as only about one in 42 such ads have been determined to be legitimate. Most legitimate jobs at home require some form of post-high-school education, such as a college degree or certificate, or trade school, and some experience in the field in an office or other supervised setting. Additionally, many legitimate at-home jobs are not like those in schemes are portrayed to be, as they are often performed at least some of the time in the company's office, require more self discipline than a traditional job, and have a higher risk of firing
.
Some ads offer legitimate forms of work that really do exist, but exaggerate the salary and understate the effort that will have to be put into the job, or the exaggerate amount of work that will be available. Many such ads do not even specify the type of work that will be performed.
Some similar schemes do not advertise work that would be performed at home, but may instead offer occasional, sporadic work away from home for large payments, paired with a lot of free time. Some common offers fitting this description are:
Get-rich-quick scheme
A get-rich-quick scheme is a plan to acquire high rates of return for a small investment. The term "get rich quick" has been used to describe shady investments since at least the early 1900s....
in which a victim is lured by an offer to be employed at home, very often doing some simple task in a minimal amount of time with a large amount of income that far exceeds the market rate for the type of work. The true purpose of such an offer is for the perpetrator to extort
Extortion
Extortion is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime...
money from the victim, either by charging a fee to join the scheme, or requiring the victim to invest in products whose resale value is misrepresented.
Work-at-home schemes have been around for decades, with the classic "envelope stuffing" scam originating in the United States during the Depression in the 1920s. In this scam, the worker is offered entry to a scheme where they can earn $2 for every envelope they fill. After paying a small $2 fee to join the scheme, the victim is sent a flyer
Flyer (pamphlet)
__notoc__A flyer or flier, also called a circular, handbill or leaflet, is a form of paper advertisement intended for wide distribution and typically posted or distributed in public place....
template for the self-same work-from-home scheme, and told to post these advertisements around their local area – the victim is simply "stuffing envelopes" with flyer templates that perpetuate the scheme. Originally found as ads in newspaper
Newspaper
A newspaper is a scheduled publication containing news of current events, informative articles, diverse features and advertising. It usually is printed on relatively inexpensive, low-grade paper such as newsprint. By 2007, there were 6580 daily newspapers in the world selling 395 million copies a...
s or magazine
Magazine
Magazines, periodicals, glossies or serials are publications, generally published on a regular schedule, containing a variety of articles. They are generally financed by advertising, by a purchase price, by pre-paid magazine subscriptions, or all three...
s, equivalents of "envelope stuffing" have expanded into more modern media, such as television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
and radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...
ads, and on the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
.
In some countries, law enforcement agencies work to fight work-at-home schemes. In 2006, the United States Federal Trade Commission
Federal Trade Commission
The Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...
established Project False Hopes, a federal and state law enforcement sweep that targets bogus business opportunity and work at home scams. The crackdown involved more than 100 law enforcement actions by the FTC, the Department of Justice, the United States Postal Inspection Service
United States Postal Inspection Service
The United States Postal Inspection Service is the law enforcement arm of the United States Postal Service. Its jurisdiction is defined as "crimes that may adversely affect or fraudulently use the U.S...
, and law enforcement agencies in eleven states.
Legitimate work-at-home
Telecommuting
Telecommuting or telework is a work arrangement in which employees enjoy flexibility in working location and hours. In other words, the daily commute to a central place of work is replaced by telecommunication links...
opportunities do exist, and many people do their jobs in the comfort of their own homes. But anyone seeking such an employment opportunity must be wary of accepting a home employment offer, as only about one in 42 such ads have been determined to be legitimate. Most legitimate jobs at home require some form of post-high-school education, such as a college degree or certificate, or trade school, and some experience in the field in an office or other supervised setting. Additionally, many legitimate at-home jobs are not like those in schemes are portrayed to be, as they are often performed at least some of the time in the company's office, require more self discipline than a traditional job, and have a higher risk of firing
Firing
Dismissal is the termination of employment by an employer against the will of the employee. Though such a decision can be made by an employer for a variety of reasons, ranging from an economic downturn to performance-related problems on the part of the employee, being fired has a strong stigma in...
.
Types of work
Common types of work found in work-at-home schemes include:- Stuffing envelopes
- Assembly of items of some type, such as crafts, jewelleryJewelleryJewellery or jewelry is a form of personal adornment, such as brooches, rings, necklaces, earrings, and bracelets.With some exceptions, such as medical alert bracelets or military dog tags, jewellery normally differs from other items of personal adornment in that it has no other purpose than to...
or medical equipment. The worker is required to pay up front for materials and construction kits, and when they attempt to sell the finished products back to the scheme's organiser, they are told that the products "don't meet our specifications", leaving the worker with assembled products and no buyer. - Data entry
- Processing medical claims. The worker pays several hundred dollars for medical billing software, but will later discover that most medical clinics process their own bills, outsource their billing to established firms rather than individuals, or have stricter requirements than the purchased software can provide.
- Forum spamForum spamForum spam is the creating of messages that are advertisements, abusive, or otherwise unwanted on Internet forums. It is generally done by automated spambots.- Types of spam :...
ming. Usually advertised as some variant of "email processing", the worker is simply given instructions on spamming online forums, and told they can make money by selling these same instructions online. - Making phone calls
- Phone sexPhone sexPhone sex is a type of virtual sex that refers to sexually explicit conversation between or other persons via telephone, especially when at least one of the participants masturbates or engages in sexual fantasy...
- Online surveys
- Sales of a product or service that is difficult or impossible to sell. This is often done in the form of a pyramid schemePyramid schemeA pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public...
. - Some ads claim to offer a device that makes passive sales calls, and the "employee" will be paid a commission of the sales.
Some ads offer legitimate forms of work that really do exist, but exaggerate the salary and understate the effort that will have to be put into the job, or the exaggerate amount of work that will be available. Many such ads do not even specify the type of work that will be performed.
Some similar schemes do not advertise work that would be performed at home, but may instead offer occasional, sporadic work away from home for large payments, paired with a lot of free time. Some common offers fitting this description are:
- Acting – Seeking extrasExtra (actor)A background actor or extra is a performer in a film, television show, stage, musical, opera or ballet production, who appears in a nonspeaking, nonsinging or nondancing capacity, usually in the background...
to perform in movies and television commercials. - Mystery shoppingMystery shoppingMystery shopping or a mystery consumer is a tool used externally by market research companies or watchdog organizations or internally by companies themselves to measure quality of service or compliance to regulation, or to gather specific information about products and services...
– Getting paid to shop and dine. While mystery shopping actually does exist, it requires hard work, is paid close to minimum wage, and most importantly, does not require an up-front fee to join. - Pay per clickPay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
Signs of a scam
Signs of a work-at-home scam versus a legitimate job may include:- Payment of fee is required prior to starting employment. In the United States, the Federal Trade CommissionFederal Trade CommissionThe Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...
states that under no circumstances should anyone be forced to pay a fee in order to obtain a job. In many countries, no legitimate employer will require a fee be paid as a condition of starting work (except perhaps a small amount for a criminal background check). - Pay is too good to be true. Though there may be legitimate jobs in existence in which employees are paid to perform the particular task in question, even from home, in reality, they would be paid a wage that is fair for that type of work and level of education, not the $40 per hour or $3000 per week that is typically offered in a work-at-home scheme.
- Employer will seemingly hire anyone, with no experience necessary and no qualifications. Legitimate work-at-home employers will only be interested in those who have the proper experience, skills, certification, and other qualifying factors, and will give at least some scrutiny to an applicant seeking employment. But the perpetrator of a work-at-home scheme is only interested in the payment required to join.
- Company is little known, and does not seemingly have a customer base bringing them revenue from which they can pay employees.
- Company does not appear to have a permanent location. Its address, phone number, and website appear to be centered around recruitment of employees, not customers.
- Company tries to show unnatural benefits of working in a very short period of time.
- Keeps on contacting you again and again until and unless you reply.
- Multiple pop-ups display upon attempting to exit the web site that is advertising the work-at-home opportunity. Legitimate employment sites will not display this level of desperation, especially during a recession.
Victims
The typical victim of a work-at-home scheme may be:- A burned outBurnout (psychology)Burnout is a psychological term for the experience of long-term exhaustion and diminished interest. Research indicates general practitioners have the highest proportion of burnout cases; according to a recent Dutch study in Psychological Reports, no less than 40% of these experienced high levels of...
employee of a legitimate job seeking an exit to his/her stressful lifestyle - An unemployedUnemploymentUnemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
person seeking high-paying easy work - An uneducatedEducationEducation in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
person with few or no skills looking for a job with a good salary - An employed person wanting to make extra money to supplement his/her regular income.
- Senior citizenSenior citizenSenior citizen is a common polite designation for an elderly person in both UK and US English, and it implies or means that the person is retired. This in turn implies or in fact means that the person is over the retirement age, which varies according to country. Synonyms include pensioner in UK...
s, disabled persons, stay-at-home parents, and others who cannot easily leave home in order to make a living. - Those with busy schedules full of unpaid activities who wish to earn money in their spare time.
- Those with long or tiresome commutes looking to remain at home and eliminate their travel to work.
- Someone who doesn't take the time to carefully investigate the industry, job and company.
- A frustrated person who just wants to earn by any means.
Consequences
The consequences of falling for a work-at-home scheme may be as follows:- Loss of money: It may be only the initial fee to join, which may be a large or small amount. Some scammers will run after receiving just this fee. Others will continue to ask for more in order for the promise of high pay to be fulfilled. Some will act on a two-way street, actually issuing paychecks, all the while receiving payments of greater value in return, which in some cases have exceeded tens of thousands of US dollars. In other cases, the employer may obtain the victim's personal information for purposes of identity theftIdentity theftIdentity theft is a form of stealing another person's identity in which someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name...
. - Loss of legitimate job: Those with a real job may quit in hopes of a better one, only to find they cannot get their original job back after they discover their dream job was only a hoaxHoaxA hoax is a deliberately fabricated falsehood made to masquerade as truth. It is distinguishable from errors in observation or judgment, or rumors, urban legends, pseudosciences or April Fools' Day events that are passed along in good faith by believers or as jokes.-Definition:The British...
. - Damaged reputation: Those who engage in sales of a faulty or otherwise controversial product may be tarnishing their own name as the salesperson of such a worthless item.
- Trouble with law: Some victims may actually receive money. But at the same time, they may be unknowingly breaking the law, on behalf of the perpetrator of the scheme, but will be fully legally responsible. Such violations may be criminal or civil in nature. In other cases, they will not be committing any criminal acts, but they will end up framed in an investigation for the crimes of the perpetrator.
- Wasted time: Victims will often invest huge amounts of time with no pay in return. This is time that can be spent earning money at a legitimate job.