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FTC, 14 States Crack Down on Work-from-Home Scams

Cases skyrocket during pandemic as unemployed, retirees, others seek income

Woman searching for a job online

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En español | In announcing a nationwide crackdown on scammers who tell people they can earn big bucks working from home — but don't deliver — a top consumer-protection official said the scams are on the rise because of the large number of people now unemployed or underemployed.

"Scammers have been even bolder during the COVID-19 pandemic … taking advantage of a desperate situation to rip money from the hands of those among us who are least able to afford it,” said Andrew Smith, an official at the Federal Trade Commission (FTC). “Scammers are preying on the unemployment and anxiety arising from the pandemic by making false promises of big income working from home.”

Losses from a variety of so-called income scams totaled more than $150 million during the first nine months of 2020, cases reported to the FTC show, and the number of reports to the agency shattered records during April through June.

Cracking down on work-from-home ripoffs

The just-announced crackdown involves more than 50 law enforcement actions against people who promise other people big incomes — or financial independence — but instead tend to do little more than take consumers’ money. More than $1 billion was lost by consumers in the 50-plus cases that are part of the crackdown, the FTC said.

"If someone promises you guaranteed income, but then tells you to pay them, tell the FTC right away so we can work to shut them down,” said Smith, who directs the FTC's Bureau of Consumer Protection. Report fraud, scams and bad business practices to

Maryland Attorney General Brian Frosh speaks to the media

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Maryland Attorney General Brian Frosh warns that scammers work are hard at work.

"Remember that there are people out there whose full-time job it is to steal your money. They're on the phone. They're on email. They're working in person eight, 10, 12 hours a day. They only need a couple of people a day to fall for their schemes in order to make a ton of money for themselves."

—Maryland Attorney General Brian Frosh

The cons vary. They are work-from-home pitches, employment scams, pyramid schemes, investment scams and bogus coaching courses, the FTC said. Some of the schemes targeted specific groups including older adults and retirees, students, military families, people on a limited fixed income, immigrants, Blacks, Latinos, and the deaf and hearing loss communities.

The crackdown, which involves the FTC, other federal regulatory agencies and more than a dozen states, is being called Operation Income Illusion.

Franchise con began with Craigslist ad

Dubious opportunities for franchises pose one particularly serious problem, said Maryland Attorney General Brian Frosh, who with Smith spoke to reporters in a conference call about the cases. Franchise offers might sound safe and attractive, but that's not always the reality, he said.

Frosh told of an immigrant who saw an ad on Craigslist for an opportunity to own a bagel restaurant and paid an initial franchise fee of $27,500. The promoters, based in New Jersey, told him that they would help him find a location and that if they couldn't find an acceptable one or obtain financing he would receive 100 percent of the fee back. But when the potential bagel-shop owner requested a refund, the promoters stopped responding to him, Frosh said. Now Maryland officials are pursing legal action against the promoters for alleged violations of state franchise law.

Maryland is one of 14 states partnering with the feds in the crackdown. The others are Arizona, Arkansas, California, Colorado, Florida, Indiana, Nevada, New Hampshire, Oregon, Pennsylvania, South Carolina, Utah and Wisconsin.

The past year, Frosh said, has been especially difficult for many families who lost income due to the pandemic and in some cases are “desperate” to make ends meet, pay for health care or put food on the table. Many Americans now are vulnerable to income scams and unwise investment opportunities, he said.

Four steps to safeguard your money

Here are four things to do before you accept a business offer, the FTC said:

1. Take your time. Avoid high-pressure sales pitches that require you to get involved now or risk losing out.

2. Be skeptical about success stories and testimonials. Glowing stories could be fake, and online reviews may have come from made-up profiles.

3. Don't bank on a “cleared” check. If you're told to send some of the money back or use it or buy gift cards, you can bet it's a fake check even if you see the money in your account.

4. Do your research. Search online for the company's name plus words such as “review,” “scam” or “complaint."

AARP’s Fraud Watch Network can help you spot and avoid scams. Sign up for free Watchdog Alerts, review our scam-tracking map, or call our toll-free fraud helpline at 877-908-3360 if you or a loved one suspect you’ve been a victim.