Work-at-home

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The ad says you can make lots of money working from the comfort of your home. But if this were true, wouldn’t we all be working at home?

Stay safe. Be Informed.

  • Know who you’re dealing with. The company may not be offering to employ you directly, only to sell you training and materials and to find customers for your work.
  • Don’t believe that you can make big profits easily. Operating a home-based business is just like any other business—it requires hard work, skill, good products or services, and time to make a profit.
  • Get all the details before you pay. A legitimate company will be happy to give you information about exactly what you will be doing and for whom.
  • Find out if there is really a market for your work. Claims that there are customers for work such as medical billing and craft making may not be true. If the company says it has customers waiting, ask who they are and contact them to confirm. You can also ask likely customers in your area (such as doctors for medical billing services) if they actually employ people to do that work from home.
  • Get references for other people who are doing the work. Ask them if the company kept its promises.
  • Be aware of legal requirements. To do some types of work, such as medical billing, you may need a license or certificate. Check with your state attorney general’s office. Ask your local zoning board if there are any restrictions on operating a business from your home. Some types of work cannot be done at home under federal law. Look for the nearest U.S. Department of Labor in the government listings of your phone book.
  • Know the refund policy. If you have to buy equipment or supplies, ask whether and under what circumstances you can return them for a refund.
  • Beware of the old “envelope stuffing” scheme. In this classic scam, instead of getting materials to send out on behalf of a company, you get instructions to place an ad like the one you saw, asking people to send you money for information about working at home. This is an illegal pyramid scheme because there is no real product or service being offered. You won’t get rich, and you could be prosecuted for fraud.
  • Be wary of offers to send you an “advance” on your “pay.” Some con artists use this ploy to build trust and get money from your bank. They send you a check for part of your first month’s “pay.” You deposit it, and the bank tells you the check has cleared because the normal time has passed to be notified that checks have bounced. Then the crook contacts you to say that you were mistakenly paid the wrong amount or that you need to return a portion of the payment for some other reason. After you send the money back, the check that you deposited finally bounces because it turned out to be an elaborate fake.

Find Fraud Alerts related to this scam here.

Pyramid schemes

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The pitch is that you will make money by paying to participate in the program and recruiting others to join. But if it’s really a pyramid, you and your friends will lose money, not make it.

Stay safe. Be Informed.

  • Plans that promise profits mainly for recruiting new members are illegal pyramid schemes. In legitimate multilevel marketing plans, profits come primarily from selling goods and services to consumers.
  • Be aware that some pyramids are disguised as “gifting clubs.” New recruits give money to current members with the promise that they will receive money from future recruits.
  • Know that all pyramids are doomed to collapse. That’s because it’s impossible to keep on getting fresh recruits who will pay to participate.
  • Legitimate multilevel marketing plans only succeed if they offer products or services that customers want. All successful businesses depend on repeat sales. If there isn’t constant demand for the products or services, the business will fail.
  • Sales to other distributors don’t count. Legitimate multilevel marketing plans aren’t based on sales to distributors. Profits should come from sales that you and any distributors under you make to the end-users.
  • Be wary of big earnings claims. No one can guarantee how much you’ll make. That depends on how hard you work and whether consumers like your products or services. Many people who work in multilevel marketing do it part-time to supplement their other income.
  • Check it out before you commit. Get all details in writing, and contact your state or local consumer protection agency for advice. In some states, multilevel marketing companies must register with the government and comply with other requirements.
  • Don’t buy more supplies than you need. Some fraudulent companies try to force distributors to pay for more products than they can reasonably sell.

Find Fraud Alerts related to this scam here.

Investment scams

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Whether you have a little money or a lot, you’d probably like to have more to “feather your nest.” But your money could fly away if you get caught in an investment scam.

Stay safe. Be Informed.

  • Don’t believe claims that there is no risk. There is always risk in investments, and no one but a con artist will tell you otherwise. Know the risk before you invest.
  • Beware of promises that you’ll make big profits fast. No one can accurately predict how an investment will do. Often the investments that promise the most pay-off are also the most risky.
  • Get the details in writing. Legitimate companies will be happy to give you all the information you need.
  • Don’t agree to anything on the spot. Pressure to act immediately is a danger sign of fraud.
  • Understand your investments. Do you know the difference between stocks and bonds, margin accounts and cash accounts, options and futures, mutual funds and certificates of deposit? If not, do your homework before you invest.
  • Don’t act on testimonials from strangers. Someone who appears to want to share a friendly tip about a great investment opportunity may actually be a con artist trying to lure you into an investment scam.
  • Be especially wary of investments in commodities. Crooks often promise that the value of investments in coins, precious metals, artwork, oil leases, gemstones, and other commodities will rise. The truth is that the value of these types of investments can go up or down significantly.
  • Steer clear of “offshore investments.” These are often promoted as a way to avoid taxes. Actually, you are still liable for taxes, and the investments themselves are usually very risky.
  • Be cautious about emails for investments. Many unsolicited emails are fraudulent.
  • Take the time to check out investment offers. A good place to start is with your state securities regulator. Other resources for information to help you make wise investment decisions include: U.S. Securities and Excahnge Commission, 800- 732-0330; the North American Securities Administrators Association, 202-737-0900; and the National Futures Association (for investments in commodities), 800-621-3570 (in Illinois, call 312-781-1467).

Find Fraud Alerts related to this scam here.

Fake check scams

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If someone you don’t know wants to pay you by check but wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars.

Stay safe. Be Informed.

  • There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

  • Fake check scammers hunt for victims. They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. They buy “sucker lists” on the black market which has sensitive information of people who have been previously scammed. And they call or send emails or faxes to people randomly, knowing that some will take the bait.

  • They often claim to be in another country. The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.

  • They tell you to wire money to them after you’ve deposited the check. If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.

  • The checks are fake but they look real. In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.

  • You don’t have to wait long to use the money, but that doesn’t mean the check is good.Under federal law, banks have to make the funds you deposit available quickly–usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce.

  • You are responsible for the checks you deposit. That’s because you’re in the best position to determine the risk–you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.

  • There is no legitimate reason for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

Want to learn more? Go to www.consumerfed.org/fakecheckscams to read CFA’s Don’t Become a Target brochure, watch the funny videos about sweepstakes/lottery and work-at-home fake check scams, and check out the other materials on the Web site. Visit NCL’s www.fakechecks.org, where you can take a quiz to see how well you can spot this fraud, send an ecard to warn other people, and find information to help you and people you care about avoid losing money to fake check scams.

Find Fraud Alerts related to this scam here.

Bogus car advertising

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Drive for long enough in any good-sized city, and you’re likely to see a car that’s been wrapped in an advertisement. Unfortunately, scammers have started to catch on to the popularity of bogus work opportunities on car ads.

Stay safe. Be Informed.

For businesses, these ads are a unique marketing opportunity. For consumers, getting paid to turn their car into a rolling advertisement can be a way to effortlessly earn some extra money. The deal is so appealing that waiting lists are reportedly years-long and advertisers get to be choosy about the types of cars they work with and the number of miles drivers must commit to.

NCL’s Fraud Center has received a number of complaints from consumers who were the victim of a variation on the fake check work-at-home scam involving these ads. (For more on fake check scams, visit fakechecks.org.)

Jennifer P. from Massachusetts told us how the scam goes down. She saw an ad on Craigslist that falsely claimed Monster Energy Drink was looking for people to advertise on their cars, offering a $300 payment in return. After she emailed the contact, she was sent a check made out for $1,900, allegedly to cover the costs of both installing the advertisement and Jennifer’s payment. She was instructed to cash the check, take out her payment and wire the remainder to the “support team” for the advertising campaign. Unfortunately for Jennifer, after she wired the money, she found out that the check was a fake and was left owing her bank $1,900. And, of course, the crooks got away with cash from the wire transfer.

NCL’s Fraud Center has received similar complaints from consumers allegedly asked to participate in fake Red Bull Energy Drink advertising program and numerous reports of the scam have emerged on message boards online since August 2013.

Consumers should never have to pay funds from their personal checking accounts to participate in these advertising campaigns. Any request to wire money to someone you don’t know should be considered a major red flag. Consumers who have been approached by or been a victim of these scammers should report it to NCL’s Fraud Center.

Find Fraud Alerts related to this scam here.

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