Top 5 Work-From-Home Scams and How to Spot Them

The COVID-19 pandemic has forced millions of people to work from home, which has led to a surge in work-from-home scams.

Scammers have been preying on vulnerable individuals seeking legitimate work-from-home opportunities.

According to the Federal Trade Commission (FTC), Americans lost more than $1.9 billion to fraud in 2019, and this is expected to increase in 2021 due to the pandemic.

Here are the top 5 work-from-home scams and how to spot them:

1. Data Entry Scams

One of the most common work-from-home scams is data entry. Scammers will offer you a job where you can work from home and make money by entering data into a database.

The catch is that you have to pay a fee to get started, and the job is usually fake. In reality, you will not be entering data into a database; instead, you will be asked to pay more fees or complete tasks unrelated to data entry.

In one case, a company called Data Entry Bucks promised people $10-$15 per data entry, but applicants were required to pay a fee ranging from $37 to $99 to access the work.

The company disappeared shortly after receiving payments from thousands of applicants. The FTC has received over 4,000 complaints related to data entry scams since 2018.

How to Spot It:

If a job ad promises a high income for minimal work, it’s likely a scam. Also, it’s a red flag if you’re asked to pay for anything upfront. Legitimate companies will not ask for money before you start working.

2. Pyramid Schemes

Pyramids are multi-level marketing schemes that promise high returns for recruiting others into the program. The goal is to get as many people as possible to join and pay an upfront fee.

The people who join later are expected to recruit more people, and the cycle continues. In reality, only a few people at the top of the pyramid make any money, while the vast majority lose their money.

One recent example of a pyramid scheme is the cryptocurrency scam run by BitConnect.

The company promised investors high returns for investing in their cryptocurrency, but the system collapsed in January 2018, causing investors to lose millions of dollars.

The FTC has received over 13,000 complaints related to pyramid schemes since 2018.

How to Spot It:

If a company promises high returns for trim work and requires an upfront payment, it’s a pyramid scheme. Legitimate companies will pay you for your work and not for recruiting others.

3. Envelope Stuffing Scams

Envelope stuffing scams promise to pay you for stuffing envelopes with promotional materials or other items.

However, the reality is that the job is a fake one, and you’ll be asked to pay a fee to get started.

The company will usually send you a starter kit with promotional materials and instructions on recruiting others into the program.

In 2018, the FTC shut down a company called Home Income Profit System, which promised people they could earn money by stuffing envelopes.

Applicants were required to pay $97 to access the work, but the job involved promoting the same scam to others.

The FTC has received over 2,000 complaints related to envelope-stuffing scams since 2018.

How to Spot It:

If a job ad promises high to pay for stuffing envelopes and requires an upfront payment, it’s likely a scam. Legitimate companies will pay you for your work, not for recruiting others.

4. Medical Billing Scams

Medical billing scams promise to pay you for billing medical insurance companies on behalf of doctors and hospitals. The reality is that the job is a fake one, and you’ll be asked to pay a fee to get started.

In most cases, the company will send you a starter kit that includes a list of doctors and hospitals to contact and software to help you submit claims.

The FTC has received over 5,000 complaints related to medical billing scams since 2018.

In one case, Medical Billing Advocates of America promised people they could earn up to $1,500 per week by billing medical insurance companies on behalf of doctors and hospitals.

Applicants were required to pay a fee ranging from $299 to $499 to access the work.

How to Spot It:

If a job ad promises high to pay for medical billing and requires an upfront payment, it’s likely a scam. Legitimate companies will not ask for money before you start working.

5. Work-at-Home Assembly Scams

Work-at-home assembly scams promise to pay you for assembling products at home, such as toys or electronics.

However, the reality is that the job is a fake one, and you’ll be asked to pay a fee to get started. In most cases, the company will send you a starter kit with materials and instructions for assembling the products.

In 2019, the FTC shut down A1 Tech, which promised people they could earn money by assembling circuit boards at home.

Applicants were required to pay $195 to access the work, but the job involved promoting the same scam to others.

The FTC has received over 4,000 complaints related to work-at-home assembly scams since 2018.

How to Spot It:

If a job ad promises high to pay for assembling products at home and requires an upfront payment, it’s likely a scam. Legitimate companies will not ask for money before you start working.

Overall, it’s essential to be vigilant when looking for work-from-home opportunities and to be wary of any job ads that promise high pay for minimal work and require an upfront payment.

Legitimate companies will pay you for your work, not for recruiting others.

If you encounter a work-from-home scam, report it to the FTC to help protect others from falling victim to the same scheme.