Legitimate in Home Businesses: How to Quickly Identify False Claims

Almost 4 million people currently work from home in America and that number is growing ever year. There are literally tens of thousands of opportunities, including 2,700 current MLMs, and over 10,000 franchises and affiliate programs. So how does anyone begin to sort through them? Of course, the goal is to find one that fits your skills, passions, time, and budget; however, the game has gotten much more complicated than that. Because of the “work from home” frenzy taking place in America, countless “less than honest” opportunities have been sold to untold numbers of unfortunate would-be entrepreneurs. This article will help you weed out any possible scams as you search for your golden brick road.

The Golden Rule

You should not have to pay to work! Real opportunities often do have some kind of upfront investment. If you are looking into any sort of MLM, franchise, or affiliate there will likely be some kind of investment. That being said, all scams concerning home-based businesses require some kind of upfront payment to work. The company will likely be charging money for an information packet, or a “kit” of some kind. Make sure you do your due diligence below before handing over a dime to anyone; and if anyone selling you on an opportunity cannot answer the questions below and show you the facts in writing I would run!

Your “due diligence” Tools to Assess Any Opportunity

1) Research any company’s reputation. Contact the Better Business Bureau. Check for reviews written by credible third party organizations.
2) Always get everything in writing, or at least see it in writing (if you are working online)
3) Be extra cautious when there are up-front fees or an investment involved. If at all possible verify the actually income of some folks involved with the business. This can be a little tricky because new federal laws do make it illegal to disclose actual income when promoting an affiliate or MLM business.
4) Get specific details on how and when you will be paid, how much you will be paid, and who will be paying it.
5) Be very leery of any business that promises big profits for little effort, expertise, or marketing. If you find a real opportunity to get rich for no work, no investment, and no selling please notify me immediately so I can jump on board!
6) Don’t follow possible business opportunities that do not look professional, or that are spammed out. Real businesses can market themselves in a professional, upfront way and make money without tricks.

I have listed below the five most common home-based business scams and a brief description of how they work. It is important to stress that under these categories below there are many legitimate honest businesses. I myself am a home-based entrepreneur and my goal in disseminating this information is to expose scam artists as less than honest, not taint any industry. Having an understanding of how these scams work will help you avoid getting misled. It will also help you learn to recognized other scams when you see them.

Medical Services (Billing and Transcription)
In this gig the potential employer will sell the individual a “startup kit” with a promise of work leads or assignments. After the kit is purchased (usually for a large investment) the jobs just don’t materialize for a number of different reasons. Again this scam is based off of an individual paying money upfront for promised work.

Cash Gifting
A cash gifting scam Is basically a pyramid scheme without the bother of a product. If you pay $100 to get in and then persuade 10 people to give you $100 then you have obviously made $900! The problem is that when you do the math 99% of the folks involved in this scheme lost $100 and got nothing.

Envelope Stuffing
The old envelope stuffing scam has been around for a long time. Usually the individual is asked to send money in to the company and is promised work “stuffing envelopes.” What is actually sent out is a kit with ads that the individual is told to send to others to sell the business. This money is made as a pyramid. If someone sends out 5000 ads and 100 respond at $50 apiece, than the individual has made $5,000; however, no real product, service, or opportunity is present. Some have taken this same concept to email. It’s the same old idea, but uses email instead of mail.

Multi-Level Marketing
Please hear me out on this one. Not all MLMs are scams! I belong to two very legitimate and profitable MLM businesses; however, they have real products that have value aside from the business opportunity. There are currently 2,700 MLMs operating in the US. In my opinion possible half of them have a long-term viable product or service. The truth is that some make a fortune in the industry, but that fact is out of the ten thousand plus MLMs that have been created in the US over the last 60 years only 50 have lived to see their 10th anniversaries!

Craft or Jewelry Assembly from Home
Some companies work in the gray by selling parts to different projects sometimes for toys or jewelry. The company will sell untold numbers of “startup kits” and craft making equipment under the guise that they will buy the finished product or have buyers lined up to do so. Then when the items are actually assembled they are sent back because they just do not meet “quality control standards.” The key to this scam is that the company is making the vast majority of their profit from finding new people to purchase the materials from them to make the items, not from purchasing the finished product and retailing it.