MoneyMagpie

Jun 01

Work from home scams and how to avoid them

The companies behind work from home schemes offer the luxury of sitting at home in your pyjamas while making loads of cash for very little effort, but be warned: not all work from home jobs are all that they’re cracked up to be.  An estimated 300,000 people a year fall victim to home working  scams and the number continues to grow as more and more desperate individuals seeking quick money-making solutions throw cash at scam companies.

According to Mike Haley, Director of Consumer Protection at the Office of Fair Trading (OFT), only two percent of people scammed actually report the crime. Which? Money Quarterly recently published a story claiming that working from home scams could cost people over £7,000 per year. So how do you spot the legitimate opportunities amongst a sea of scams?

How to spot a scam

Which? experts found an ad in a national newspaper that encouraged people to purchase a set of DVDs for £70 to learn how to make seven million pounds. A second advertisement claimed that people could begin earning £27,013 a month by purchasing a guide that  explained how to create iPhone apps.

The majority of work from home scam companies will ask you for money up front in exchange for information, special equipment or other materials. This should immediately raise a red flag. You should never blindly send money to these companies. If you’re asked to send money and you do, you can be fairly certain that you’ll never see that money again.

Most legitimate organisations will have at least one landline telephone number listed on their website. A self-described large organisation or company that only lists a mobile phone number under its contact information is likely to be a scam organisation.

If you receive a phone call or email out of the blue from someone who insists that you should join their company or that you applied for work with them which you have no recollection of, you can bet on this being a scam. These people are pros who will try to pressure you into “acting now” before you miss out.

If it sounds too good to be true, it probably is

Envelope stuffing seems to be the most popular work from home scam. Be wary of any advertisement that offers you the chance to make piles of cash for performing menial tasks. Think about it: why pay someone loads to stuff envelopes when a machine could do the same job at a much more cost-effective rate?

What to do if you suspect a scam:

  • Never send money. Most legitimate companies will not require you to pay a fee for information or materials.
  • Never send out your bank details. Trustworthy organisations will never ask you to “confirm your bank details” online.
  • Find out as much as you can about the organisation. Browse the internet and search for case studies on the company. Call the company and ask to speak to several different employees about what it’s like to work there.  Make sure that the company has a landline number that you can call if you have any doubts about the company’s legitimacy.
  • Find out exactly what the job is that you’re being asked to do. Scam companies will often be very vague about the details of the job.
  • Ask the company when and how you would be paid and whether or not you would earn commission on any of your work.
  • Report any companies you suspect of scamming to Consumer Direct or the Advertising Standards Authority.

Victim of a scam?  What you should do

Act quickly and report the scam to the Office of Fair Trading (OFT). Most scam companies operate for a short while and then vanish only to reappear with a new name and a new scam. As soon as you realise you’ve been scammed, altert the OFT so that they can begin an investigation before the company disappears from the radar. Try to provide OFT with as much information as possible including any names, street addresses, email addresses, phone numbers and descriptions of the advertised job.

In all likelihood, you’ll never again see the money that you were scammed out of, but at least you can find satisfaction in helping to catch the criminals.

Legitimate work from home opportunities

It is possible to earn money from home but you’re unlikely to make mountains of cash. Here are several useful suggestions for how you can make cash within the comfort of your own home.

Online Surveys

Companies like Toluna and Viewsbank will pay you for your opinion. The important thing to remember is that although survey companies will pay at times as much as £50 per survey, you won’t be eligible to participate in every survey. See MoneyMagpie’s article about online surveys for information on which survey companies you should register with.

Enter Competitions

There are loads of opportunities to nab cash and other prizes simply by entering competitions. The rewards can be great and your odds at winning might be better than you’d think. Websites like Get Me A Ticket offer the chance to enter at any time thousands of  different competitions.  

Recycle your gadgets

Good news- your old and broken gadgets might still be of some use! So instead of tossing away your ten-year old mobile, consider sending it to Mobile Phone Xchange for cash. Despite the name, they’ll pay you cash for a number of gadgets including games consoles, cameras and MP3 players. Read our article on recycling gadgets to find out how you can get started. Also check out Moneymagpie’s recycling comparison tool to find out how much you can get for your mobile phone.

Refer a friend

JobFact and Groupola will both pay you to refer friends to their websites. If you have employment-seeking friends, refer them to JobFact, which will pay you £100 for every friend who lands a job through their site. Groupola is a website that features great deals in eight major UK cities. If enough people sign up for the deal then the deal will be honoured. If not, the deal is called off. For every friend you refer to Groupola who then goes on to buy into the advertised deal, you will net £5.

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