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Building Your Own Scam Radar: Ways You Can Avoid Home-Based Business Scams

Written by: Cesar Campos

Article Overview: As business models evolve and market needs change, more and more people join the work force online. Telecommuters, freelancers, work-at-home individuals, part-time employees and even people re-entering the workplace find home-based businesses as the perfect platform from which to work, earn a living (or extra cash) and expand their skills and talents. Unfortunately, there are also home-based businesses operated by individuals who have no intentions of helping others. Beware of these people and learn how to avoid home-based business scams. Here are ways you can protect yourself:

Building Your Own Scam Radar: Ways You Can Avoid Home-Based Business Scams

Big Money? Beware.
Scammers know that people considering home-based businesses want to earn as much money as they can. Who doesn’t? However, this is where most scam traps are set as well. How would you like to earn $200 a day just stuffing envelopes or earn a 'guaranteed' $1000 a week by doing 'nothing' in the safety of your own home? Or maybe grow your $10 to $10,000 in just a month?

Sounds too good to be true? It probably is. Most promises of big cash within a short time for home-based businesses are scams. If you fall for this type, prepare to lose your money.

A legitimate home-based business will let you earn money – sometimes a lot of money – but it will not turn you into a millionaire within a short span of time.

If the business opportunity is too vague, clarify and then verify.
Most scammers will try to trap you by dodging the details. Ads and invitations that have too much to say and very little factual or technical information to provide should raise red flags.

Don’t go into a home-based business opportunity that doesn’t give you detailed information about what the product or service is or how the business works. Be especially wary if it promises big bucks or if the product is non-existent. For something that you can't understand, that's a lot of empty promises.

Beware of home-based businesses that rely on memberships and recruitments.
Although many MLMs have succeeded and are actually legitimate, there are also others that have no intention of making a businessman out of you. If a home-based business encourages you to keep ordering products, tools, sales kits and the like in order to earn commissions, you might be dealing with a scam.

The same might be true with businesses that rely heavily on recruiting 'down lines' in order for you to make money. If there are over 5 levels of 'down lines' or distributors involved, think over the proposal before joining.

Look for signs of real business.
A real home-based business opportunity or any business, for that matter, should have real products, real investments and company support. Beware of home-based opportunities that ask you to pay for a fee just to gain access to websites or directories. This type of offer is not a business at all. It's a scam.

Beware of stolen credit cards.
Another scam to watch out for if you have a home-based business is one that attacks you as a merchant. Accepting payment from a customer who uses a stolen or fake credit card can be bad news for home-based businesses. You will take on 100% of the liability or loss.

To avoid this type of home-based business scam, do these steps:
- Always ask for complete information (full name, full address and contact numbers). Validate the information thereafter. If the information checks out, only then should you honour the order.

- Check the addresses provided by your customer. The 'ship to' and 'bill to' addresses should be the same. If not, ask your customer to send you a signed fax to confirm their order. Have them authorize the transaction using their credit card number.

- Be extra careful about doing business with companies using free e-mail accounts or those that rush large orders. You might also want to double check international orders because if things don’t go well, you'll find it impossible to trace your client or even get your money back.

Keep yourself informed and updated.
Scams change tactics as soon as they are busted. Since they evolve like nasty computer viruses, scams can be difficult to detect, especially if they're new and run by professionals.

To avoid home-based business scams, find out about the latest tricks by checking online resources. Read information offered by the Better Business Bureau, some government sites and those run by private anti-scam organizations.

You'll also find reviews of home-based opportunities on these sites. Join online forums and discussion boards to exchange information with other home-based business owners. The more vigilant you are about your home-based business, the less likely you will fall victim to a scam.

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Article Tags: business models, business scams, homebased businesses



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