Watch Out For Scams

Last Updated on Thursday, 15 October 2009 16:59 Written by Administrator Thursday, 17 September 2009 18:58

One thing that you should be well aware of, prior to going online looking for that perfect home business, is the fact that the internet is full of promises.  You will come accross a plethera of websites promising you tens of thousands of dollars per month, while you sit back and watch the money come in. These ads are targeted at individuals and families who are struggling financially, and are looking for an answer to their dire financial situation.

You may have heard or read the statistic that 97% of home businesses fail.  The problem is that everyone is claiming to be that successful 3%.  So before you act, do as I always say. Conduct your due diligence. By this I mean, look for the obvious facts which are being ommitted by these ads.  For example, the initial investment, cost of advertising, and saturation of the market.  When more people promote the same product, your cost of advertising increases, while your rate of return decreases.

Below I will highlight some of the so-called work at home opportunities which I have encountered over the years, which I would consider at least border line, if not out right scams.

Home Assembly Work

There are companies who will try to lure you in by telling you how you can make a good income by a producing good, which they will in turn buy from you. What they do not tell you is the amount of time you will need to devote to producting these goods, and the money which you will need to spend on materials and equipment.

A specific example is an existing company who pays you to make specific clothing items. What is required to make clothes? Of course, a sewing machine, and material. You will bare the costs for these. Once you create the clothing and attempt to get paid, this company will refuse to pay you, citing that your clothes to not meet their quality standards.

I go on the record as saying that the home assembly work companies which I have researched are complete scams. For legal reasons, I will not name names, but procede with caution when considering a company in this field.

Pyramid Schemes or Chain Letters

What usually plays out, is that you see an ad which tell you to photocopy a specific letter, and to send this letter to a list of people, whose names and addresses will be provided to you. Your only other responsibility is to send ten (10) dollars for the mailing list and labels. Meanwhile, you are being shown a chart which supposedly illustrates the thousands of dollars which you will make.

Aside from being 100% illegal, the only people who ever make money are the scam artists on the top of the pyramid. These people, and I use the word "people" in lieu of something more harsh and more fitting, will constantly change names and post office boxes in an effort to hide their trail once the pyramid collapses.

Multi-Level Marketing (MLM)

Many of these companies appear legitimate, and actually have products to sell. These companies will bring their success stories to the forefront, in an attempt to lead you to believe that you can have the same successes, and enjoy the same lavish lifestyle of those successful in the company.

Here is where you need to remember what I said earlier about 97% of home businesses failing. The success stories are most likely a part of that 3%. So, for every three (3) success stories, there are most likely ninety-seven (97) stories that these companies do not want you to ever know about.

While MLM companies are legal, have a product to sell, and are well established, their claims regarding your ability to match the success of their top members are completely unfounded.  Generally, the focus is not on the products, but on recruiting friends and family members to join the business.  In turn, you will receive a percentage of the profits of the sales made on the friend of family member's website.

Furthermore, there is usually a requirement that you become a customer of your own business, purchasing a minimum volume of products per month. More often than not, this leads to people purchasing overpriced products which they do not want or need, and an insolvent business.

Envelope Stuffing

These types of ads have been around for decades. The central theme is that for a fee, of course, you will receive instruction which will show you how you can make money online stuffing envelopes.

The scam is revealed once you make your payment, at which time you discover that there is no real employment opportunity. Conversely, you simply shown how to place classified and internet ads.  The only way to make money is if people respond to your ads.

Medical Billing

We are surrounded by ads for medical billing. The central claim is that the health care industry is in crisis, due to the daunting task of processing paper claims.

The allegation here, is that the market is flooded with doctors who claims, which they want to contract out to same on labor costs. This means that you can design your work at home opportunity around services such as billing and accounts receivable. The best part is that no experience is necessary, and you will be provided with clients in need of your services.

The unfortunate reality, is that after making your investment, you are not provided with clients, and are responsible for selling your services to whoever may listen. Furthermore, most people who choose this path never find clients, and are unable to recoup their initial investment.  The competition in this industry is absolutely fierce, and centers heavily on a few large companies.

Conclusion

In conclusion, make sure that as part of your research on any company, you inquire about the total investments, and requirements for the day to day operations of the business. Insist to speak to references who can be verified as legitimate sources. Conduct internet searches, and look for forums which may discuss the field, or even the specific business.

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