Found this article at
the Better Business Bureau Website:
ASSEMBLY WORK AT-HOME:
Typical Ad -- "Assembly work at home! Easy money
assembling craft items. No experience necessary."
This scheme requires you to invest hundreds of dollars
in instructions and materials and many hours of your
time to produce items such as baby booties, toy clowns,
and plastic signs for a company that has promised to buy
them. Once you have purchased the supplies and have done
the work, the company often decides not to pay you
because your work does not meet certain "standards." You
are then left with merchandise that is difficult or
impossible to sell.
CHAIN LETTER: Typical Ad -- "Make
copies of this letter and send them to people whose
names we will provide. All you have to do is send us ten
dollars for our mailing list and labels. Look at the
chart below and see how you will automatically receive
thousands in cash return!!!"
The only people who
benefit from chain letters are the mysterious few at the
top of the chain who constantly change names, addresses,
and post office boxes. They may attempt to intimidate
you by threatening bad luck, or try to impress you by
describing themselves as successful professionals who
know all about non-existent sections of alleged legal
codes.
ENVELOPE STUFFING: Typical Ad -- "$350
Weekly Guaranteed! Work two hours daily at home stuffing
envelopes."
When answering such ads,
you may not receive the expected envelopes for stuffing,
but instead get promotional material asking for cash
just for details on money-making plans. The details
usually turn out to be instructions on how to go into
the business of placing the same kind of ad the
advertiser ran in the first place. Pursuing the envelope
ad plan may require spending several hundred dollars
more for advertising, postage, envelopes, and printing.
This system feeds on continuous recruitment of people to
offer the same plan. There are several variations on
this type of scheme, all of which require the customer
to spend money on advertising and materials. According
to the U.S. Postal Inspection Service, "In practically
all businesses, envelope stuffing has become a highly
mechanized operation using sophisticated mass mailing
techniques and equipment which eliminates any profit
potential for an individual doing this type of
work-at-home. The Inspection Service knows of no
work-at-home promotion that ever produces income as
alleged.
MULTI-LEVEL MARKETING: Typical Ad --
"Our products make it possible for people like you to
earn more than they ever have in their lives! Soon you
can let others earn money for you while you and your
family relax and enjoy your affluent lifestyle! No
experience necessary."
Multi-level marketing, a
direct sales system, is a well-established, legitimate
form of business. Many people have successfully sold the
products of reputable companies to their neighbors and
co-workers. These people are independent distributors
who sell popular products and also recruit other
distributors to join them. On the other hand,
illegitimate pyramid schemes can resemble these
legitimate direct sales systems. An obvious difference
is that the emphasis is on recruiting others to join the
program, not on selling the product. For a time, new
recruits who make the investment to buy product samples
keep money coming into the system, but very few products
are sold. Sooner or later the people on the bottom are
stuck with a saturated market, and they cannot make
money by selling products or recruiting. When the whole
system collapses, only a few people at the top have made
money—and those at the bottom have lost their
investment.
ONLINE BUSINESS: Typical Ad -- "Turn
your Home Computer into a Cash Machine! Get computer
diskette FREE! Huge Selection of Jobs! No experience
needed! Start earning money in days! Many companies want
to expand, but don’t want to pay for office space. You
save them money by working in the comfort of your home."
This is typical of
advertisements showing up uninvited in your e-mail—an
old scheme advertised in a new way. You pay for a
useless guide to work-at-home jobs—a mixture of
computer-related work such as word processing or data
entry and the same old envelope-stuffing and home crafts
scams. The computer disk is as worthless as the
guidebook. It may only list free government web sites
and/or business opportunities which require more money.
PROCESSING MEDICAL INSURANCE CLAIMS:
Typical Ad -- "You can earn from $800 to $1000
weekly processing insurance claims on your home computer
for health care professionals such as doctors, dentists
chiropractors, and podiatrists. Over 80% of providers
need your services. Learn how in one day!"
Generally, the promoter
of this scheme attracts you by advertising on cable
television and, perhaps, by inviting you to a business
opportunity trade show at a hotel or convention center.
You may be:
- Urged to buy
software programs and even computers at exorbitant
prices; a program selling at a software store for
$69 might cost you several thousands of dollars.
- Told that your work
will be coordinated with insurance companies by a
central computer.
- Required to pay for
expensive training sessions available at a "current
special rate" that will be higher in the future, and
- Pressured to make a
decision immediately.
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