Almost three out of fourIn multi-level marketing, you do not make money or you lose money. Of course, most people would never knowingly accept work with such a high risk of not being paid. But when this job promises to let you work at home, it may suddenly seem worthwhile to try.
Thanks to the Internet, scams related to home work have increased in recent years. And they look very different from what they were. Most pyramid and Ponzi schemes are practically finished: now you are more likely to be recruited for multi-level marketing or fake virtual assistants.
How can you distinguish a scam from a real opportunity to work from home? And what about those gray areas that are not quite scams, but are not very profitable either? We have the answers – read this before you commit to something you might regret.
Pyramid and multi-level marketing systems: what's the difference?
Most people have heard of pyramid schemes. These now illegal scams promise to pay members who simply recruit more people, instead of selling products or services. As more people join, recruitment becomes impossible and new members can no longer benefit.
Since they are largely suspicious and illegal, you do not experience a lot of pyramid schemes these days. But in some ways, the Multilevel Marketing Model (MLM) has taken their place.
MLMs are one of the most common misleading "jobs" available to date. But as anyone trying to recruit you for a MLM will tell you, "This is not a pyramid scheme!" And they are right: this is not the case.
MLMs depend on selling products or services, while trying to recruit new members to work below you. The model marries the idea of the pyramid with the products for sale. You can also see MLM called network marketing opportunities.
And to be clear: it is possible to earn money through an MLM. It's just that only a small fraction people who join a group earn money, while the vast majority do nothing or lose money. So even though an MLM may not be a scam in the same way as a pyramid scheme, we recommend avoiding these high risk "opportunities".
Why do so many people lose money with MLM? It has to do with how these companies are structured. People who buy must buy their own inventory to sell, and are often pressured to buy larger stocks than necessary. Then they earn money with commissions on their sales. They can also benefit from recruiting new people and getting a commission from each of these members of their lineage.
This means that for new members, some of the profits from every sale go into the pockets of people in their "upward line". And although they are pushed to buy stocks, there are often few indications on how to sell them effectively. . Many people join MLMs, absorb funds into their inventory, and then leave when they realize they can not sell it quickly enough to make a profit.
However, as MLMs generally involve a friendly-looking community, promises of big money and lots of pressure to maintain them, people often invest hundreds or thousands of dollars before leaving. While it is possible to make a profit with an MLM, the numbers are not on your side. Better to stand aside and look for a reliable gainful job for the time you spent.
Other common scams related to homework
Although MLM is one of the most fraudulent homework options, you can meet others looking for a job. Here are some of the most common scams to watch for.
Virtual Assistants Scam
In this type of scam, someone post a great job opportunity for a virtual assistant. It sounds simple: be well paid to answer emails, phone calls in the field and other generic tasks. But then, they offer to send you a large upfront payment. They just need some financial information beforehand.
These scams are meant to access your bank account information and steal your funds before you know what's going on. Be wary of any "virtual assistant" job offer: it's actually quite rare as legitimate work. If they offer to pay you before you have done real work, run – and prevent them from contacting you again. Otherwise, they will send fake threats to your inbox to contact the authorities if you do not do so.
Scams on social networks
Many modern scams also exploit the love of social media. These scams promise you hundreds of dollars just to spend time on your favorite social platforms.
However, before you can be paid, the company usually asks you to pay to access the training or its platform. Here's a tip: Any job you want to pay for is not legitimate. A real job will pay you without asking you for money first.
Data entry scams
In these jobs, the promise is that you will be well paid for a simple data entry at home. Although data entry is also a real job, scams abound. Actual data entry tasks are not usually well paid. Therefore, if you make huge profits, do not be fooled.
These scams often take your money by forcing you to buy their expensive software before you can start. Again, you should not have to pay to start a job – a real employer will provide you with the software you need to work with them.
How to avoid being fooled
Although these types of scams have become incredibly commonplace, there are countless other scams related to home work. Even if you think you know them all, new ones appear all the time. So, instead of trying to memorize every type of scam, use these tips to improve your scam radar from home work.
Keep your head clear
When you die wanting to leave your dull office and put an end to your miserable journey, it's easy to let the emotions blur your mind. Your enthusiasm for a promising homework offer may blur your judgment and make you sign up for a scam.
Try to keep a cool head during your job search. If you find a job that seems too good to be true, give yourself a day to think about it before applying. When you come back to the question with a quieter perspective, the alarm signals might be more obvious.
Avoid initial transactions
Normal jobs will not charge you money at first, and they will not pay you out of the box either. Be wary of offers that promise to pay you before you do a job or ask you to pay for hardware or software before you make your first paycheck.
These initial transactions entrust your financial information to an entity you do not know anything about. Even if the initial transaction is only a small fee, these fraudsters can add new fees, unexpected future fees, or even steal your information.
To be realistic
If the job promises you'll make a lot of money without any effort, it sounds too good to be true because it is.
All legitimate remote jobs require real work. It is not because you work from home that you are paid to do nothing. If a job promises easy money to people with no business skills, it's not a real job.
Waiting for an interview
A legitimate, full-time remote job will almost always involve an interview by phone or video call. If you do not have an interview, how can the company know they want to hire you?
That said, many home and contract workstations do not require an interview. However, they will at a minimum require you to send your resume and examples of your abilities before committing yourself. If you do not interact and show an employer what you have, it's probably a scam.
Avoid employers who contact you first
If it is a legitimate business, many people should want to work for them. So, why do they appear with an unsolicited email in your inbox?
Real home jobs are not desperate by people. They will wait for potential employees to contact them with applications. But crooks still need new victims, so they go to people first.
Discover how you will get paid
If a job promises big pay but does not know when or how you'll get it, it's another red flag.
Real employment opportunities clarify their payment structures. You may be paid every two weeks via PayPal or once a month by direct deposit. They will not let you ask when and how you will get paid.
Also avoid "employers" who promise to send you a big check and then ask you to take some for your payment. Real home jobs do not mean that you handle large amounts of money that do not belong to you.
Do your research
Always look for an online business before you start working with them. Dig and go beyond the first page of Google results. Check out their social media pages, and check Glassdoor for what former employees have to say. If there is no information about a company beyond its website, it's probably not legitimate.
What to do if you find a scam
Better Business Bureau
If you notice a "Work From Home" scam, you can help alert others by reporting it on Scam Tracker of the Better Business Bureau. This is also a great place to search for anything you suspect of being a scam.
However, keep in mind that crooks always come up with new ways to mislead people of their time and money. They can pretend to be known and legitimate companies, with familiar logos. They can offer realistic opportunities. The best way to stay safe is to always approach remote job postings with caution and to do thorough research before proceeding. There are many legitimate remote jobs on the market. Do not be fooled by the search for the best.
Of course, work-at-home scams are not the only ones to avoid. Then check out our guide to avoid common travel scams.