How to Know When a Home Business Opportunity is a Scam

Scam Alert Warning

The long running economic downturn has meant that problems with unemployment still exist today, forcing many people to turn to business opportunities. However, you must be careful when approaching any business opportunity venture, especially when it is something that you have received by email, phone call or a letter in the mail. There are so many unscrupulous people who are taking advantage of the unemployment problems by offering the unemployed a way out of their situation. Be very leery about anything that seems too good to be true.

Pyramid Schemes

Pyramid schemes are much like chain letters or a work at home scam. If you are asked for a fee upfront, be on the alert. Most legitimate business opportunities don’t involve money directly from you to another company unless it is a MLM or networking marketing company. In this situation, you will receive products or services for your money on a monthly basis. Conversely, people who do pyramid schemes take your money and leave you ‘hanging.’

The Warning Signs

There are several warning signs to look for when it comes to business opportunity scams. When you get a direct mail letter and are asked for a fee for information, be forewarned that this is not something you want to do without research.

Here are some other signs to look for:

  • When the direct mail letter does not have a forwarding street address, but a P.O. box
  • When the email is generic and not specifically addressed to you
  • When you are asked to transfer money to a person who promises to give information about a job prospect. You don’t pay to get a job
  • When someone promises you in a letter or email that you are guaranteed a large return on your investment
  • Watch for unreasonable guarantees

Protecting Yourself

Don’t fall for get-rich-quick schemes. There is no easy way to get rich unless you buy a lottery ticket and that is far from a guarantee. The scammers are the ones making the money from vulnerable people who fall for their schemes. If someone offers to go into a business proposal with you over the phone, get it in writing. Don’t ever transfer money to anyone you don’t know via western union. Never give out your credit card information. If you do fall victim to a scam, contact the Consumer Protection Bureau for assistance. Don’t open any emails that you are suspicious about.

Conduct Research

Before responding to a business opportunity ad, isn’t it wise to ask what is in it for this person? Why would they be contacting you for money in the first place? They probably wouldn’t want to give away the secret to making money. When that happens, be sure to do your homework. Research the company extensively. Don’t be too quick to give up your hard earned money. Seek legal advice. Beware of ongoing costs.

Asking Pertinent Questions

If you do decide to go with a business opportunity, there are pertinent questions to ask such as:

  •          Is there money upfront?
  •          How much and what does it entail?
  •          What does the work involve? What will I be doing?
  •          What kind of payment should I expect?
  •          Is it a weekly pay or commission payments?
  •          How often will I be paid and when is the first paycheck?
  •          How do you determine your claims about possible earnings?
  •          Do you have customer testimonials?
  •          What proof can you provide?


When you can get firm and forthright answers to these questions, you may be able to determine if this is legitimate or not. When you don’t have much money, work-from-home business opportunities can sound good. While there are legitimate opportunities, you should always take time to learn about the company before making a decision. 




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