So you're looking for a way to work at home without investing a large sum of money? You might be attracted to one of the many advertisements offering low-cost work-at-home or money-making opportunities: stuffing envelopes, assembling products, reading books or watching television for pay.
Advertisements tout these opportunities as flexible and easy to start. They claim you can work full time or part time; costs to get into the business are generally quite low; and the work requires minimal training or experience. What's more, advertisements promise alluring financial rewards in minimal time.
Sound too good to be true? It might be. Some opportunities deliver what they promise--but others promise one thing and deliver another. Rather than reap fabulous earnings, purchasers are stuck with products they can't sell, services for which there's no market, or training that doesn't open doors to business contracts. Fortunately, there are ways to protect yourself.
Check It Out
If a work-at-home opportunity requires buying goods or services upfront that cost more than $500 (less in some states), the program meets the legal definition of a business opportunity. "Generally speaking, a business opportunity is the sale of goods or services enabling the purchaser to begin a business, and where the seller makes certain statements, representations or guarantees in the course of the sale," says Andrew A. Caffey, an attorney in the Washington, DC, area who specializes in franchise and business opportunity law.
These statements, he explains, usually refer to the seller promising to help find accounts, guaranteeing income in excess of the business opportunity's purchase price, and offering to buy back any unsold products assembled or grown by the purchaser. "Last but not least," adds Caffey, "the seller claims that a market exists for the products or services to be sold by the purchaser."
Companies that meet the legal definition of a business opportunity are easier to investigate than companies that simply offer you a job working at home. In either case, however, there are still ways to find out if the opportunity is legitimate.
The best advice? "Do your homework," says Barry Goggin, president of the Better Business Bureau of Northeast California in Sacramento. People tend to invest in work-at-home opportunities "without doing the things that would be automatic if they were going to open a retail store," says Goggin. "You've got to ask questions, get information, evaluate what you know and then make your decision."
Follow this seven-step plan to figure out whether a work-at-home opportunity is on the level:
1. Evaluate the advertisement. Before you send any money to buy a program advertising "$2,000 a week, no experience necessary," check the ad for other details. Is there a phone number you can call for further information, or must you respond to a post office box? If you can speak with an individual, is the person a company representative or simply someone hired to take telephone orders?
Legitimate companies make it easy for you to ask questions. They'll give you the information at no cost, and they won't pressure you into buying their program before you've checked them out.
2. Ask plenty of questions. Before you send any money, get answers to the following: What is the total cost of the seller's program, including training, supplies, equipment and any special fees? What materials and support services will you receive in return for your investment? Are you responsible for finding your own customers, or will the company find them for you?
If you'll be making or assembling products, ask what the company's standards are in order for your work to be accepted. When and how will you be paid? If you're buying products for resale to the general public, ask whether the company will buy back products you can't sell.
"Find out if the market for the product or service
you'll be selling has been tested and what your competition
is," advises Goggin. "If you're paying for marketing
support, what is the company's level of
expertise? Do they have a [well-thought-out] marketing plan, or will they just send you a few tips and expect you to do the rest?"
Finally, if you'll be enrolling in a company's training program to learn certain skills, like how to run a travel agency or do medical transcription, evaluate the quality of the training. Ask to see a list of program graduates. Call several to find out if the training was adequate in helping them start working at home.
3. Be aware of state requirements. If the initial investment for the opportunity exceeds $500, call your state's attorney general's office to see if your state has a business opportunity law. If so, has the company registered with the state and met other requirements? (In California, for example, sellers of business opportunities that require a total initial payment of more than $500 are required to register, pay an annual fee, and file disclosure statements about income or earnings potential with the attorney general's office.) Are there any complaints about the company on file?
In situations where you sign a contract to purchase a business opportunity, you have the right to cancel the contract within three business days. The contract is voidable by fraud or deceit, and you can demand your deposit be returned.
4. Do a background check. Call your local Better Business Bureau or visit http://www.bbb.org to obtain a reliability report on the company you're considering. Also check with the U.S. Postal Inspection Service in your area to see if any complaints have been filed. The Postal Inspection Service is a good resource because it actively investigates promoters who might be in violation of mail-fraud or false-representation statutes.
"If just one person has filed a complaint and the amount the individual lost is as little as $30, for example, we'll have the complaint on file," says postal inspector Kevin Koscki at the U.S. Postal Inspection Service in Sacramento, California.
5. Get it in writing. If the seller makes promises--about delivery, satisfaction or money-back offers--get confirmation in writing. The more written evidence you collect, the more proof you'll have if you later have a dispute with the company.
6. Read the fine print. If you receive a disclosure statement from the seller or are asked to sign a contract, be sure to read it carefully. "You may want to take it to an attorney or a financial advisor," adds Caffey.
7. Keep your cool. "Don't lose your head to the allure of easy profits. There are no easy profits," warns Caffey. "If it sounds too good to be true, it probably is."
You've Been Conned!
What if, despite your best efforts, you still get ripped off? Begin by contacting the company and asking for your money back. Let the company know you'll notify law enforcement and other officials about your experience.
Keep a record of all your conversations and correspondence with the company. If you send documents, send copies--not originals. Send correspondence by certified mail, and request a return receipt to document what the company received.
If you can't resolve the dispute, contact the attorney general's office in your state and in the state where the company is based. Provide the name and address of the company, a copy of its advertisement, all correspondence to and from the company, a copy of your check or money order, and evidence that you had to send money before you received any information or merchandise. The attorney general's staff can tell you if you're protected by any state laws.
You should also contact the Federal Trade Commission (FTC). Although the FTC can't resolve individual disputes, the information you provide may help the commission determine whether there's been a pattern of possible law violations requiring it to take action against the company. Write to Consumer Response Center, Federal Trade Commission, Washington, DC 20580, or call (202) 326-2222.
"Operators of work-at-home schemes like to keep the dollar amount low so more people will send in money. But that makes it harder to prosecute," explains postal inspector Kevin Koscki at the U.S. Postal Inspection Service. "That's why the best advice is still this:
`Buyer, beware.' "
- Work-at-Home Schemes (Publication 204) is available free from The Council of Better Business Bureaus Inc. Write to Publications Department, 4200 Wilson Blvd., Arlington, VA 22203; call (703) 276-0100; or visit http://www.bbb.org
- Work-at-Home Schemes is available free from the Federal Trade Commission. Write to Consumer Response Center, Federal Trade Commission, Washington, DC 20580; call (202) 326-2225; or visit http://www.ftc.gov/bcp/conline/pubs/invest/homewrk.htm
- The National Fraud Information Center, a project of the National Consumers League, operates a hot line to help consumers who may want to file complaints. It also sends information to a fraud database maintained by the FTC and the National Association of Attorneys General. Call (800) 876-7060 or visit http://www.fraud.org