Beware of "work from home" scams that promise the earth and deliver nothing!

SD1_2

Hi there,

I've been looking through the posts on this board and have seen a number of posts asking for advice on whether such and such "work from home" scheme is a scam.

Whilst MSE members quite helpfully post that it's "an obvious scam", they often don't explain WHY it's a scam or how the scam works.

So, I thought I'd post a run down on some of the most common work from home scams and how they operate.

Payment Processing Agent

You receive an email (or see an advert on Gumtree/Craigslist etc) which offers a position as a payment processing agent for an international Company. They spin a tale about having International clients who need to make payments to the Company but for whatever reason can't make them directly.

What's the job?

You use your bank account to accept payments from the clients. You then withdraw the money and send it to "Head Office" via Western Union (or any other wire transfer service), keeping a percentage for yourself. That's it.

What's the catch?

Scammers need a network of bank accounts to collect payments from their victims. The money going into your account could be payments from victims of romance scams, fake online shops, fake charities or "hacked" bank accounts. Effectively you become a "money mule" for illegal bank transfers and fraudulent cheques. As soon as the transactions are identified as fraudulent, the full amount is deducted from your account and the police will come knocking on your door asking you to explain yourself....

How can you avoid being scammed?

Ignore any emails offering you a job you haven't applied for and NEVER respond to an advertisement of this nature.

Data Entry

You respond to an advertisement offering highly paid data entry positions simply for filling in online forms. The advert may imply that you will be paid by Google for doing this.

What's the job?

You are given a list of links that you should promote and promised payment for one that you post online. You'll be "trained" to find and post comments on relevant blogs and Internet forums.

What's the catch?

The links you'll be posting will point at dodgy websites advertising fake pharmaceutical products, counterfeit fashion items, "work from home" opportunities or useless health products. Apart from promoting some really dodgy stuff by spamming websites, you'll also probably never be paid.

How can you avoid being scammed?

Ignore the ads and don't respond to emails offering this type of work.

Google Profit Kit

What's the job?

This one isn't a job as such, it's billed simply as a way to make massive profits for very little work.

What's the catch?

You have to pay a membership subscription (which is detailed in very tiny print in the T&C's) and in return you get a website which enrols other people into the scheme. It's virtually impossible to get out of the subscription without cancelling your credit card and you'll never make enough money to justify the cost (unless you're prepared to become a scammer yourself)

How you can avoid being scammed?

Stop looking for the "magic bullet" to make money online. There isn't one.

Dodgy employment agencies

What's the job?

These scammers will try and convince you that you can earn £15-£20 per hour working from home for a major employer.

What's the catch?

You have to pay an upfront "registration fee" to be allowed to apply for the vacancy. Once you pay, you never hear from them again.

How can you avoid being ripped off?

NEVER pay a fee to register with an employment agent. It's illegal for them to charge candidates for their services. They get paid by the employer.

There are various other "work from home" schemes which border on scams but can't actually be classified as such. They can include so-called "network marketing" where you recruit your friends and family into your "team" selling a product. Beware of direct sales opportunities where recruiting more distributors seems to be more important than selling the product.

There ARE legitimate opportunities to earn money from home, including Companies such as Avon, Betterware, Kleeneze etc, but as with all genuine jobs, they involve a lot of hard work.

Please, don't be taken in by the chance to earn big money for doing nothing. You WILL be disappointed (and financially poorer for the experience) and could end up on the wrong side of the law.

OldGreyFox

SD1 wrote: »

There are various other "work from home" schemes which border on scams but can't actually be classified as such. They can include so-called "network marketing" where you recruit your friends and family into your "team" selling a product. Beware of direct sales opportunities where recruiting more distributors seems to be more important than selling the product.

There ARE legitimate opportunities to earn money from home, including Companies such as Avon, Betterware, Kleeneze etc, but as with all genuine jobs, they involve a lot of hard work.

The fact that company chooses to use the network marketing route does not in itself make it a scam.There are numerous legitimate network marketing companies operating in the UK not just few you have mentioned.

Legitimate schemes will normally carry this Statutory warning.

"Statutory Warning
It is illegal for a promoter or a participant in a trading scheme to persuade anyone to make a payment by promising benefits from getting others to join the scheme.

Do not be misled by claims that high earnings are easily achieved."

Schemes where recruiting is more important then selling are known as pyramid selling schemes and they are banned in the UK anyway.

ButterPie_2

Check that a company is registered with the DSA (direct selling association) - they have very strict rules, and all the major players are members. If in any doubt, look them up on the DSA website independently.

Ypaymore

ButterPie wrote: »

Check that a company is registered with the DSA (direct selling association) - they have very strict rules, and all the major players are members. If in any doubt, look them up on the DSA website independently.

Not all the major legitimate players are members of the DSA, as they cant be asked to pay there expensive membership fees.

SD1_2

OldGreyFox wrote: »

The fact that company chooses to use the network marketing route does not in itself make it a scam.There are numerous legitimate network marketing companies operating in the UK not just few you have mentioned.

Legitimate schemes will normally carry this Statutory warning.

"Statutory Warning
It is illegal for a promoter or a participant in a trading scheme to persuade anyone to make a payment by promising benefits from getting others to join the scheme.

Do not be misled by claims that high earnings are easily achieved."

Schemes where recruiting is more important then selling are known as pyramid selling schemes and they are banned in the UK anyway.

I completely agree that there ARE genuine companies that use network marketing as a legitimate route to market, and yes, pyramid schemes ARE banned in the UK.

However we live in a Global economy now and there's nothing stopping international firms targeting UK consumers to recruit them into schemes that are thinly disguised as "work from home" opportunities but are actually pyramid schemes.

As a side note, I often see a certain lifestyle products company (which will remain nameless) exhibiting at fayres and shows, and they ALWAYS seem more interested in talking to you about becoming a distributor than selling you the product....

PlutoinCapricorn

SD1, you are doing something very worthwhile but you may on the whole be preaching to the converted.

How can you get to young, naive, gullible, possibly desperate people before the scammers do? And how can the scammers be stopped? They have been playing the same old games for decades.

SD1_2

PlutoinCapricorn wrote: »

SD1, you are doing something very worthwhile but you may on the whole be preaching to the converted.

How can you get to young, naive, gullible, possibly desperate people before the scammers do? And how can the scammers be stopped? They have been playing the same old games for decades.

Part of what I do is to raise awareness of online scams to target exactly the groups you mention (and potential scam victims who are often the complete opposite - older people who have been round the tracks a few times but still fall for a good story), but for every news article, blog post and forum discussion that warns of a scam, there's a scammer looking for a new and improved way of pulling in victims.

It's a never ending battle and while-ever there is a victim to be found, there'll be a scammer to find them.

As for preaching to the converted, on the whole I'm sure that MSE members are pretty savvy, but the amount of "is this a scam?" type questions that have popped up on various boards suggests that there are still some members who are not totally "scam-aware".

The reason for this post was that I saw a few threads of this nature with responses such as "such an obvious scam", without any explanation of how the scam works.

Knowledge is power, and the more Internet users know about how the scammers operate, the better prepared they are to avoid falling victim.

I was contacted recently by a reader who had been struggling to convince her 80-something MIL that she was being scammed by fake charities. By showing her articles and blogs I have published, she was able to help her MIL "see the light", change her telephone number and move her bank account to stop the fraudulent standing orders going out.

That one email made everything I (and other members of the Internet community) do to counter scammers worthwhile.

PlutoinCapricorn

I think that this is a war that needs to be fought on many fronts. Teaching people what to look for i.e. "red flags" is very useful, much more so than just sympathy for the victim or contempt for their greed, gullibility, wishful thinking and stupidity - not uncommon reactions.

People often do ask "is this a scam?" on MSE and the reply is usually "If it seems too good to be true it probably is". Or "If you are asking this question, you must suspect what the answer will be". There are posts that give details of what to look for but I can't remember seeing any quite so inclusive as yours.

The example that you gave is very inspiring: I wonder whether you have ever found victims who just cannot cut their losses and will not accept that they have been conned?

SD1_2

The phenomenon you describe is called "Escalation of Commitment" and it's not unique to scam victims. It's also common in business, where a project goes so wildly over budget that it will never actually recoup costs, but too much money has been invested to pull out and admit defeat.

I'm actually in contact with a scam victim at the moment who, whilst she knows deep down she's being scammed, will not fully accept it and cut communications. To cut a (very) long story short, this lady was in email and telephone contact with an online friend from Ghana for over two years. He never asked her for money for anything at all and she had no reason to suspect he was anything other than genuine.

Despite never meeting the guy, she developed an emotional bond with him and was devastated when she received an email advising that he had died suddenly.

The scam started when she received a letter from a "barrister" which told her that her online friend had left her the entire proceeds of his estate in her will. Of course, she had to engage legal representation in Ghana which the barrister was glad to help with.

Cutting it short, she sent several thousand pounds in "retainers", "tax certification fees" and other costs in order to release the significant proceeds of the estate. She kept sending money until the well was dry and she simply had no more lines of credit open to her.

In a sick (but not uncommon twist) she is now in contact with a fake "FBI agent" who claims to have arrested her lawyer for stealing her money and will help her get her money back. You've guessed it - there are more fees to pay.

I have shown this lady every possible article about advance fee fraud and recovery scams, put her in touch with Victim Support and helped her to contact the authorities here. I've even put her in touch with the FBI who have confirmed to her that the agent doesn't exist, but she simply will not accept that the money is gone. I fear that she's sending more money even as I type this.

The lady in question is kind hearted, generous of spirit and a genuinely intelligent person, but she's also in a state of desperation.

I truly feel for her, but have now accepted that I can help her no more and have had to "cut my own losses".

PlutoinCapricorn

SD1, that post is both upsetting and infuriating - at least for me. I know people like that - in their case it is a cult-like organisation and its leaders that they are blindly clinging to. They have invested so much that they just can't admit that they have been wrong - apart from a few defectors.

I hope that by posting that story in here you may reach possible new victims in time. Perhaps MSE needs a 'scam' board.

Another class of 'victim' to be found on MSE consists of people who didn't read the terms and conditions, or who want to break contracts without penalty. Some of them signed up for home learning courses and later regretted it. There is no scam here, but they won't accept that and take responsibility for their problems. Perhaps you have dealt with some of them too.

I think that the work-related scams are some of the worst.

ColinAllCars

PlutoinCapricorn wrote: »

Perhaps MSE needs a 'scam' board.

They have one !

http://forums.moneysavingexpert.com/forumdisplay.php?f=82