Work-at-Home Scams – Learn to Identify Them and Protect Yourself

Rahul Sharma
Dolores Bernal
September 14, 2023

Even after the world returned to normal from the Covid-19 pandemic, working from home remains a viable option to generate income.

For many people, working from home is a good career move. Greater life-work balance can be achieved more easily when the daily commute is eliminated, along with the long hours at the office. 

But the idea of working from home or “work-at-home” was around before the pandemic. And while some of those opportunities were legitimate then, many people were falling for fake opportunities devised by scammers.

This does not mean that you need to outright give up the idea of working remotely. There are still many genuine opportunities you can take advantage of. However, it is of utmost importance that you remain aware of the dangers involved in work-at-home scams.

Instances of work-at-home scams have risen in recent years. Incidents were up a whopping 76%. In 2022 alone, almost 100,000 people in the US were affected by job-related scams. Compared to the previous year. This means that you need to be wary, watch out for telltale signs and red flags, and be cautious while looking for online or remote job opportunities. 

In this article, we will discuss the common forms that these scams take, how to watch out for them, and how to learn to avoid them.

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Photo by Anna Shvets

What is Work at Home Scams?

Work-at-home scams aim to take advantage of people’s need to work, and, do so more conveniently.

These scams present opportunities that seem legitimate, but in reality, the scammers are trying to reel you in and steal your hard-earned money, or your sensitive personal information.

A lot of these scams use online forms and an “application process” to harvest personal data. This can include your name, address, social media details, and other information. Some scammers will try to convince you that starting a job requires you to make a little investment – either to get the process of onboarding you going or to provide you with the “training” that you need to start the job.

In fact, certain scammers will also use this method to get you to do shady and possibly illegal work.

In practice, work-at-home scams usually begin with a show of intent – a job posting on a reputable website or direct communication from a company looking to hire people, usually for simple, low-load tasks you can easily manage from home. Scammers try to make the offer interesting and worthwhile, usually by promising high starting salaries and other incentives.

Once you establish contact, the hiring process is mostly a formality. Then, the scammers will try to make you pay upfront or share your personal information. 

If you want to get in touch with the fake employer to address a grievance or ask why things did not go as planned, you will not hear back from them again.

Person Using Black and Silver Laptop Computer

Photo by Peter Olexa

Types of Work-at-Home Scams

Here are some common types of work-at-home scams that you need to watch out for. 

1. “Simple Work” Scams

What is it? These scams try to hook you in by promising good money for work that seems simple and quick. Often, this entails envelope stuffing, requiring you to create solicitation letters, put them into envelopes, label the envelopes, and mail them. The business is basically a pyramid scheme that YOU are actively promoting, without knowing. Basic writing jobs can also fall under this category.

The most important part of the scam is that the “employer” will require you to pay a small upfront fee to join the program. This can be justified in many ways – it might be a “processing fee” to get you onboarded to the program and to send you your first lot of supplies. It might be a “training fee” to provide you with the basic training to do the job. It might be a “registration fee” for the program.

However, once you pay these “fees” upfront, you’re not likely to receive any work or payment if you do start doing the work. And don’t count on receiving any explanation from the fake employer – they would be long gone.

How to spot it – This one is fairly easy to spot. Legitimate work opportunities do not require you to make any upfront payment. Whenever you encounter a job opportunity that involves any kind of payment, you can figure that it’s a scam. 

Moreover, these scams often promise terms that are too good to be true: “A lot of money for little work” or are written very vaguely. These are excellent indicators that you are dealing with a scam and should exercise caution.

How to avoid it – Never pay any money upfront for a work-at-home opportunity. The moment this comes up, end the conversation and block communication, whether that is through email, instant messaging, or social media. Before considering a work-at-home opportunity, watch out for red flags.

2. Data Entry Job Scams

What is it? Like the previous type of scam, this can also come in different flavors. It might be an ad for a simple data entry job or something more specialized, like medical transcription or billing. The aim, again, might be to extract money upfront from unsuspecting people by trying to sell an “information package,” a training program, or a special app or software that can help you get the work done.

The scam can also take other angles, like asking for your personal information so they can use it for identity theft. A work-at-home job in the medical field can sound enticing to many people, and scammers take advantage of this.

How to spot it – These opportunities usually come knocking unsolicited and promise great returns. In some cases, the scammers might even pose as legitimate business entities and use popular job boards to post their ads. You need to carefully examine the language of the communication and see if it involved upfront payment or using a special software or app for the work. 

Moreover, these scammers would usually prefer conducting their “interviews” through text messages instead of face-to-face, another red flag.

How to avoid it – If you start communication with a data entry or medical billing company for a position you have not applied for, it is likely to be a scam. Any work-at-home opportunity of this kind that makes the work seem too rosy and pleasant in exchange for high pay has the potential to be a scam. Insist on a face-to-face interview and mention firmly that you will not make any upfront payments or share any personal information.

3. Fake Check Scams

What is it? This category covers a large number of different types of scams that have one thing in common – you would be required to receive a check in the mail, deposit it in your own bank account, keep some of the money, and wire the rest to another entity. 

The reality is quite different. The check that you deposit to your bank for processing is a fake check. While the check might be processed by your bank, it will not be clear. This means that any money reflected in your bank account is subject to the final clearing of the check, which is not likely to happen, and if you spend any of that money, you will have to return it to the bank out of pocket.

This also exposes you to legal hassles on account of using a fake check. Overall, this can have quite an adverse effect on your finances and life in general.

How to spot it – If any work opportunity needs you to cash a check on your own bank account and transfer part of the money elsewhere, you should immediately see it as a fake check scam. There are many different methods scammers use to create narratives that make this seem legitimate, but in the end, the results are usually the same.

How to avoid it – Never cash a check that you receive from a work-at-home opportunity with your own bank account. If you have already deposited such a check, do not send any payments to third parties and alert your bank immediately about the matter.

4. Lottery / Mystery Shopping / Gift Card Scams

What is it? These scams are all variants of the fake check scam, with other elements mixed in to make them seem legitimate, and even desirable job opportunities. A favorite with scammers is the mystery shopping job scam. Mystery shopping is a legitimate job a lot of people enjoy doing.

However, a fake mystery shopping job offer will ask you to either pay upfront to “cover expenses” and then send you a fake check, or demand that you try out a gift card or money transfer service and send you a fake check. You are then required to use part of the money to purchase a gift card or transfer money to another account and keep the rest.

Lottery and sweepstake scams can take a similar form- you might be informed that you have won a lottery and you need to pay “processing fees” to receive your prize. The prize itself might come in the form of a fake check that you deposit to your own bank account only to find out later that you have been scammed. 

How to spot it – Look out for job opportunities that mention mystery shopping, lotteries, sweepstakes, gift cards, or money transfers. Once you are contacted by one of these places, watch out for a few telltale signs. Notice if they demand upfront payment, want you to cash checks, and do money transfers. These requirements can be enough to tell you that you are dealing with scammers. Be wary of any unsolicited communication regarding job offers and read every communication carefully to identify these scams.

How to avoid it – The three-part process of avoiding these scams reads something like this – do not pay upfront to start a job, do not cash checks at your bank, and do not send money transfers to third parties for a work-at-home opportunity. If you have already been sucked into this scheme, report any loss of money immediately to your bank and authorities.

A lot of these scammers, in an effort to give their job ads the guise of legitimacy, will try to use business names such as the Mystery Shopping Professionals Association (MSPA), a legitimate organization that actually does not directly employ mystery shoppers. If you run into an ad that says it is an opportunity to work for MSPA, you can be sure it is a scam.

5. Shipping / Reselling Scams

What is it? During the pandemic, a lot of people started small businesses shipping or reselling imported items from home. Taking advantage of the popularity of this, scammers have now adopted this technique and fashioned it into a neat scam. Here, the work-at-home opportunity involves receiving packages, inspecting them for quality, taking off their current labels and putting on new shipping labels, then shipping them.

There are many ways this can set you up for disaster. First, like many other scams, the company can ask you for an upfront payment to get you into their “system” and onboard you. Then, you might be asked to share sensitive personal information which can then be used for identity theft. The fake check scam can make a comeback here as payment for services rendered. Worst case scenario, you might be helping to sell stolen goods, or goods purchased illegally, and opening yourself up to legal trouble.

How to spot it – The easiest way to stop a reselling scam is to watch out for words like “shipping,” “reshipping,” “reselling,” and “package handling” in work-at-home job ads. Generally, starting these businesses in a legitimate manner involves quite a lot of work while the scam job postings will make everything seem easy and simple. Look for the usual red flags in the language of the ads and be wary of a job opportunity that comes unsolicited without you having applied for it. 

How to avoid it – When you encounter a work-at-home job offer that involves packaging and shipping, look at the payment structure. If the opportunity insists that you make an upfront payment to get into the business or mentions that you will be compensated for your efforts after you ship a package, it should be enough to tell you that you are dealing with a potential scam. You should also never accept or sign for packages that you did not ask for or ship packages to other parties without knowing in detail about the legitimacy of the contents.

6. Recruitment / Home Business Scams

What is it? These scams have always been popular with scammers as they prey on people’s need to find gainful employment or income opportunities. These scams operate in one of two ways. They either promise you a “lucrative position” in a company, often one that is legitimate. Otherwise, they might offer “essential training” and resources if you want to start your own business from home.

In both these cases, the intent of the scammers can be twofold. First, they will try to extort you of money in the form of upfront payment in the guise of “training” or “recruiter fees,” often promising actual training material or personal coaching. Otherwise, it can be a play for identity theft, with scammers requiring you to fill in forms providing personal information, sometimes even sensitive data like Social Security numbers or passport details.

Occasionally, this scam will also involve a “referral bonus” – a chance for you to earn more money if you bring more people into the fold. This way, you will unwittingly assist the scammers to scam more unsuspecting people.

How to spot it – Large, reputed, and legitimate companies often carry out recruitment drives either directly or through agencies. However, these always involve rigorous interview processes and background checks. Any “recruitment agency” that promises you a legitimate job without these due processes is likely to be a scam. Moreover, if a company that wants to help you start your own business wants upfront payment for training materials and resources, your scam radar should alert you.

Often, these “companies” will have legitimate-looking websites and ads, but without physical addresses or phone numbers for transparent communication.

How to avoid it – If you are looking for a work-at-home position with a legitimate company, it is prudent to consult the company’s website to see if they are hiring and to approach them directly for any advertised open positions. Similarly, for companies providing apparent business opportunities, take a close look at their credentials and look on the internet for reviews and scam reports before contacting the company.

Do not pay upfront for any services and training materials and definitely avoid sharing personal sensitive information without a face-to-face interview.

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Photo by Andrea Piacquadio

Work at Home Scams – Staying Safe and Protected

Now that you know about the most common ways scammers try to prey on people using work-at-home scams, you have the knowledge to stay protected from these practices. Here is a comprehensive list of things to do and remember to avoid being a victim:

  • Make a mental list of possible red flags that a scam work opportunity might have and watch out for those while looking at job listings, even at reputed and legitimate job boards and social networks. When job listings appear “too good to be true” they almost always are. Any listing that promises a lot of money for very simple or minimal work is liable to be suspect. Listings that involve an interview process carried out over chat or email can be equally likely to be scams.
  • Always remember that work-at-home jobs should be paying jobs and not involve you paying the party employing you. No matter how attractive the deal sounds, any payment you make upfront is likely to be the last financial transaction between you and the party involved. After this, you will not be able to contact them any further. Refrain from making any upfront payments at all costs.
  • Just like your finances, you need to protect your identity. Identity theft is a very serious issue and scammers can do a lot of damage with a stolen identity. Therefore, never disclose information that can be used for identity theft without a thorough vetting of the company asking for that information.
  • Be wary of any job that involves the use of checks, and never deposit a check you receive from unverified sources into your own bank account.
  • Research is the key to staying free from scams. Whenever you encounter a company offering work-at-home positions, it is a good idea to thoroughly research that company using web search and social media contacts. If it is a scam, it is likely that you will find reports from past victims online and know to steer clear.

In spite of your best efforts, you might fall victim to a scam like this unknowingly. The moment you realize it is a scam, you should cease all activity and communication with the scammers and take necessary precautions. These can include –

  • Securing your accounts – If you have already shared personal information with scammers, it is a good idea to secure your vital accounts to avoid any kind of breach. You should change all your important passwords and turn on two-factor authentication with services that support them.  It is also a good idea to run malware scams on your home computer and phone if you have installed any software provided by scammers or used links provided by them to go to web addresses.
  • Collecting data – Collect any data you can find about the scam, including your own personal communications with the company and the original job posting. This will make it easier to report the incident of the scam to the proper authorities.
  • Reporting the incident – From there on, you need to report the incident to the relevant authorities. First, let all the vendors or other businesses involved in the scam about the incident. This can include money transfer companies like Western Union, gift card companies, and shipping companies. Next, you can get in touch with your own bank and put a temporary stop to payments and transactions if you have fallen victim to a fake check scam. Finally, report the incident to the FTC and your local authorities in case of financial loss or identity theft.
  • Investing in identity theft protection – Since a lot of work-at-home scams aim to steal your identity, it is a good idea to be proactive and sign up for professional identity theft protection if you are looking for a genuine work-at-home position. These services offer many different avenues for protecting your personal and sensitive information and also can help you in many ways if there has been a breach. If you have fallen victim to a scam, you can contact the company providing an identity theft protection service such as Aura, and issue an order of mitigation.

With these steps, you can begin your journey toward finding a genuine, rewarding work-at-home position without having to worry about getting scammed.

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