Skip to: Content
Skip to: Site Navigation
Skip to: Search

A not-so-simple plan

Work-from-home schemes promise big paydays with little effort – just some personal investment up front. The jobs sound alluring in precarious times, but they can also carry a sting.

By Neal LearnerSpecial to The Christian Science Monitor / September 30, 2002

Tired of the daily grind – or worried that your job just might go away?

Skip to next paragraph

Many people have legitimately traded rush-hour commutes for work they can do from the comfort of home. According to the National Association of Home-Based Businesses, about 20 million entrepreneurs this year will earn their income from enterprises run from basement offices and kitchen tables nationwide.

But millions of others will fall victim to work-at-home scams that are spread through classified ads, direct mailings, and, increasingly, the Internet and e-mail. The advertisements are enticing: "Work at Home, Earn Up to $40,000 a Year!"; "Easy Work for Excellent Pay!"; "Be Your Own Boss, Work Your Own Hours!"

Experts say that perpetrators of fraudulent business promotions – including envelope-stuffing, craft assembly, and medical-billing schemes – prey on stay-at-home mothers, the elderly, and other home-bound individuals yearning to make some extra income, especially in a sluggish economy.

Last year, Andrea Trimble, a widow from Baltimore, fell for a scam she saw advertised on one of the many work-at-home websites. After exchanging a few e-mails with the company owners who, Ms. Trimble says, "beefed it up to make it definitely sound like a legitimate work-at-home job," she sent $54 for a software package that she thought would allow her to launch a data-entry business.

"They made it sound like I would log onto my computer, they would e-mail me the information, and I would type the orders into their database," explains Trimble, adding she was promised $10 per entry.

But when she installed the software, the only directions that popped onto her screen told her to place ads in local newspapers to get others to purchase the software. "And if, by chance, any other sucker bought the software, like I did, then I would get paid $7," Trimble recalls. "I can't even begin to tell you how upset I was. That $54 dollars [could have been used for] paying a bill."

Work-at-home scams are an "age-old consumer-fraud problem," notes Michael Mora, an attorney with the Bureau of Consumer Protection at the Federal Trade Commission (FTC) in Washington. "The only thing new about this is the use of the Internet," he says, noting it has allowed scam artists to extend their reach dramatically.

Typical scams set back victims by $40 to $50, Mr. Mora explains. More serious ones can cost tens of thousands of dollars, including those in a category known as "business opportunity" schemes, which lure victims to buy the rights to such things as vending machines, pay phones, and greeting-card displays (see story, left).

While the government doesn't track the prevalence of such scams, Mora says work-at-home schemes consistently rank among the Top 10 consumer complaints received by the FTC. Furthermore, the Council of Better Business Bureaus reported that in 2000 it received more inquiries into work-at-home propositions than any other type of business, including plumbers, home contractors, and auto repair shops.

Others say their numbers are increasing as the economy falters. "There has been an uptick in interest. A lot more people are unemployed and really in need of supplementing their income," says Ellen Parlapiano, coauthor of the book "Mompreneurs Online: Using the Internet to Build Work@Home Success." "Mothers are particularly vulnerable because they are so desperate to make money from home," she adds.

Still, plenty of legitimate home-business opportunities are out there, Ms. Parlapiano says, including such venerable direct-sales companies as Avon and Tupperware.

"You definitely can be successful working from home, but you have got to do it by tapping your own talents and passions, rather than by trying to look for some opportunity that's in the back of a magazine," Parlapiano says.

That's the lesson stay-at-home mother Donna Werbos learned several years ago after spending $20 on a envelope-stuffing business kit – a common scam found in the classifieds of mother-oriented magazines.