How To Protect Yourself From The Work-At-Home Startup Scam

Work from Home

Photo: ishane via Flickr

If your confidence is low about starting your own business, and you are tempted to “reduce the risk” by signing up for one of the many “work-at-home” startup offers you see, think again! These offers that you see on every social network and Craigslist are invariably scams.The problem is getting worse. To stem the tide, the Web giant Google late last year launched a legal battle against more than 50 companies that allegedly infringe upon the Google name to promote “work-from-home” scams. Their lawsuit came less than one month after a separate class action complaint was filed against one of these companies for a work-at-home scheme.

My definition of a scam here is any deal that wants some sort of cash payment before you can start “making money.” Typically you need pay a registration fee; or buy a starter kit, training materials or a database of hot leads. Take that as the base warning flag – you should never have to pay money to work!

If you are still tempted to beat the odds, and would like to be convinced that yours is the one-in-a-thousand “real” offers, here are a few more action items you should consider before you commit:

1. Contact the company. Try to find out the company name and contact information. If there is only an email address, they are likely not a legitimate business. Test the contact info. If it’s an 800 phone number, listen to see if the ringing tone changes while you’re waiting to be connected: that’s a giveaway to calls diverted to an overseas base.

2. Ask for an interview. Ask yourself what kind of company would hire someone based on an e-mail, rather than a face-to-face or phone interview. If the company does not require an interview, as a potential employee or contractor you have a right to ask them why. You can also ask them what kind of screening they do for their employees if they do not interview them.

3. Check company location. Is the company overseas, or have no location specified? Beware of companies or individuals overseas who ask you to cash money orders or checks and offer to let you keep a portion – these are always scams.

4. Google name or details. An Internet search could give you revealing information about the company or let you know how their scam operates. It is wise to do an Internet search of a company before you begin to work for them or before you send a payment. An Internet search may show feedback from other people who have been scammed by the company.

5. Check posting frequency. Many scammers use an automated spamming program to post jobs repeatedly and throughout different cities. If you notice a posting that is re-posted every day or multiple times a day, this is usually a telltale sign that the post is a scam.

6. Pay by credit card. This one may sound counter-intuitive, but liability for online credit card purchases is usually limited to $50, if you are dissatisfied and report the transaction. Some credit card issuers will even waive the $50 deductible.

Of course, it goes without saying that you should never provide personal information, like social security number, bank account info, or credit card numbers to anyone to secure a job opportunity. The final test is that when something sounds too good to be true, assume it is a scam.

So even if your confidence is low about running a business, remember that you can actually reduce your risk by doing your own startup, compared to the other “low risk” alternatives on the Internet. Keep your wits about you, and save a friend tomorrow by helping Google clean up the problem today.

This article originally appeared at Startup Professionals and is republished here with permission.

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