Published in Your Money on 16 February 2009
With unemployment figures on the rise, schemes claiming to offer big bucks to work from home are looking increasingly attractive. Here’s why they should be avoided.
Rising redundancy levels across the UK are a major concern for many of us. It can leave us feeling vulnerable and unsure which way to turn next.
And as the bills start to stack up and the prospects of finding a new job seem increasingly gloomy, panic can really start to set in.
So imagine spotting an advertisement in a newspaper offering you lots of money for simply stuffing envelopes in the comfort of your own home. It would sound pretty tempting, wouldn’t it? After all, it wouldn't be forever and it would be a convenient way of securing some cash to tide you over for a while.
There’s just one problem -- many of these schemes are simply trying to rip you off.
Typically, work-at-home scams promise a large income for minimal work -- such as envelope stuffing or craft assembly work (making toys and gifts). Often, the advertisements will be placed in shop windows, on lampposts, or in magazines or newspapers.
Traditionally, these scams have been particularly attractive to the elderly, students, people with young children and those with a disability. But at a time when job losses are on the rise, these schemes are likely to become more attractive to anyone out of work.
In fact, the Office of Fair Trading (OFT) reckons around 330,000 adults fall victim to these scams every year. What’s more, scams like these cost UK victims £70 million a year, and that figure is likely to rise due to the recession.
If you apply to a work from home scheme, you’ll probably be asked to pay a registration fee so that you can receive your starter pack or assembly kit. And this is where the scam kicks in.
If you’ve applied to stuff envelopes, instead of receiving a batch of envelopes, you’ll be sent instructions to post similar advertisements to attract other people into the scam. This is what's known as a pyramid scheme and it's illegal under the Consumer Protection from Unfair Trading Regulations 2008.
If you’ve applied for an assembly kit, you may receive the kit, but it will probably be without instructions or certain items required to make the product will be missing! And even if you use your initiative and manage to assemble the item, it’ll probably be rejected by the company on claims that it doesn’t meet the required standard.
Meanwhile, home working directories promise a variety of different home work opportunities. But once you've paid your fee, you'll just receive a directory of other companies who have their own registration fees.
How to avoid the trap
Now I am not saying that all home working schemes are dodgy -- in fact, there are some genuine schemes out there. But if you do consider applying for one, you need to think carefully about how the scheme works. If it’s a legitimate business, it should be willing to tell you exactly what is involved.
So here are some top tips on how to protect yourself:
If you’re asked to pay any money upfront to cover administration or registration fees, investigate the company fully before sending any money
Check out the company on a website such as Better Business Bureau (BBB) to see whether there have been previous complaints
Find out exactly what tasks you will have to carry out, when you’ll be paid and how much.
Carefully check out the email and premises address -- dodgy companies are likely to use an anonymous email address or a PO box address as they are difficult to trace
Insist on a landline phone number to contact the company -- if it’s a mobile number, it’s more likely to be dodgy
Ask for references -- and don’t just settle for one or two as they might be fake
Even if the advertisement is in a reputable newspaper or magazine, it doesn’t mean you should trust it.
What to do if you are a victim
If you have become a victim of a work from home scam, you can report it to the Office of Fair Trading. Ensure you have as much information about the scam as possible, such as addresses and phone numbers.
By reporting your experience, you may be able to help prevent these bogus companies from preying on more vulnerable people. But the bad news for you is you’ll probably never see your money again.
If you would like advice on your consumer rights, you can contact Consumer Direct, who will be able to help you.
So in these difficult times, if you are struggling to find work and are considering working from home, please think carefully before committing to anything. Your best bet is to contact your local job centre to see if they have anything on offer, and you can also check out our Working From Home discussion board.
Just remember, if it sounds too good to be true, it probably is!