Being self-employed can be a very rewarding experience, but it’s important to watch out for scams and common mistakes as you explore your options and once you get under way.
Avoiding Work From Home Scams
Scams can take many forms. You can be “hired” and never get paid. You can be asked for an up-front fee and receive nothing in return. You can be scammed for your information and become the victim of identity theft. You can even unwittingly become part of illegal activities.
What’s particularly worrying about these offers is that they can appear on typical and popular job search websites. Many people fall victim to these scams every day. However, you can protect yourself by being aware of common warning signs:
- The job claims that no skills are required
- The job offers high pay for little/no work
- The job advertises job search sites (most legitimate work-at-home opportunities are done through referrals)
- The job requires you to pay money up front
The best way to identify a legitimate work-from-home opportunity is to research the company you are looking at. If you think anything about it sounds suspicious, walk away. Many companies offer valid work-from-home opportunities; you just need to exercise caution when identifying them.
SCAMS: What to look out for
Envelope Stuffing - This is one of the oldest scams around. For a fee, the scammer offers to send you all you need to make “hundreds of dollars a week”… money that you never see. Learn what to look out for.
Home Assembly - In this scam, for a fee, the company provides all the supplies to assemble a product at home. No person can assemble anything as fast as a machine, so your work will always be subpar, and you will wind up dishing out money for a starter kit that takes you nowhere. Learn what to look out for.
Mystery shopping - Mystery shopping or a mystery consumer or secret shopper, is a legitimate tool used externally by market research companies and watchdog organizations, or internally by companies themselves to measure quality of service or compliance with regulation, or to gather specific information about products and services. But it can also be a scam, particularly if you’re asked to pay a fee. Learn what to look out for. (PDF)
Rebate processing - A true rebate processing job doesn't require you to market or promote the company's products, but simply process forms administratively and be paid a nominal sum for every processed document. There aren't any sales, commissions or clicks to keep track of. It is very difficult to find genuine rebate processing jobs on the Internet, but if you look through specialized, administrative work-at-home communities and forums, you may find them. Learn what to look out for.
Online surveys - Scammers love online surveys because it’s also easy to trick people into handing over money or personal information in the belief they’re going to be paid for taking part. Learn what to look out for.
Pyramid schemes - In the classic "pyramid" scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same. Learn what to look out for.
Medical Billing - Any coding and billing instruction service that seems too good to be true probably is. You should avoid any instructional program that promises you employment, certification, or expertise in anything less than six months. Learn what to look out for.
According to the Federal Trade Commission, people tricked by work-at-home ads have lost thousands of dollars, not to mention their time and energy. Stay current on common work-at-home scams.
Self employment can feel like the fulfillment of a long held dream of working for yourself. In order to avoid common pitfalls, listed below are resources to help you keep track of some standard administrative responsibilities as well as gain an understanding of how working for yourself can affect your taxes and Social Security benefits.
- Time Tracker Options – To ensure correct billing, accurately track your time. There is an assortment of tools available to help you manage and document your time.
- Expense Tracking Options – Avoid errors in billing by keeping track of your expenses. There are a lot of options available to you. Expensify is just one example. General Contracts - The only open collection of legal contracts and a convenient way to negotiate and sign documents online.
- Filing Taxes - During tax season, free volunteer tax preparation services, including AARP Foundation Tax-Aide and the Volunteer Income Tax Assistance (VITA) program can help individuals file their individual tax returns
- Social Security Administration - For more information, visit the Social Security Administration website and search “how work affects your benefits.”