FTC warns of work-from-home scams amid COVID-19 pandemic
WASHINGTON - Many people may be looking for ways to earn money by working from home, especially during the coronavirus pandemic which has shuttered businesses across the country and resulted in the highest unemployment rate since the Great Depression.
But according to the Federal Trade Commission, some fall victim to work-at-home scams that promise people the ability to be their own boss and earn thousands of dollars a month — but don’t actually deliver.
Some scams require the individual to pay for a starter kit or certification that is useless, while others may even promise a refund if you don’t succeed, according to the FTC.
“The ads don’t tell you that you may have to work a lot of hours without pay, or don’t disclose all the costs up-front,” the agency warns on its website. “You might spend money based on promises you’ll quickly earn it back — but you don’t. People tricked by work-at-home ads have lost thousands of dollars, not to mention their time and energy.”
A file image shows a man using his laptop computer at home. (Photo by Jaap Arriens/NurPhoto via Getty Images)
Some common work-at-home scams include internet businesses, where you’re told you can earn thousands of dollars a month starting your own business online.
“The company says that no experience is necessary because they have experts to coach you, and you’re pressured to pay for the opportunity right away. Once you pay, the company says you won’t succeed unless you pay for more pricey services,” the FTC warns.
The agency said many people who pay for these “businesses” are left with a lot of debt — and not much else.
It also warned of offers promising money in exchange for completing tasks like internet searches on prominent search engines and filling out forms.
“You just have to pay a small shipping and handling fee. Later on, you learn that the company isn’t connected with a well-known search engine like it claims — scammers are just lying to get your credit or debit card information,” the agency states, warning that even if you pay just a small fee online, that financial information can be used against you.
Other work-from-home scams involve envelope stuffing, in which the worker is offered entry to a scheme where they can earn money for every envelope they fill, and rebate processing, where an ad says you can earn cash by helping to process rebates.
The FTC also warns about ads to make money by assembling crafts at home for a company that has promised to buy them, ads promising a substantial income for work processing medical claims electronically, ads for mystery shopping jobs that require you to first pay a fee, and some multilevel marketing scams that tout luxurious lifestyles and suggest you’ll earn enough money to quit your job.
“Be wary and ask for written information about how much money most people make (after deducting their expenses),” the FTC states online. “Also, if anyone suggests recruiting is the real way to make money, know this: MLMs that survive on recruiting new participants rather than retail sales are pyramid schemes. Pyramid schemes are illegal, and the vast majority of participants lose money.”
The FTC suggests doing your homework if you’re thinking of following up on a work-from-home offer.
“Promises of a big income working from home, especially when the ‘opportunity’ involves an up-front fee or giving your credit card information, should make you very suspicious,” the agency warns.
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This story was reported from Cincinnati.