Work At Home Scams - Bargaineering

Posted: 12 Oct 2010 09:26 AM PDT

With so many people out of work, “Work at Home” type of scams are probably on the rise as people scramble to replace incomes they lost when their companies downsized. The basic premise of working at home isn’t itself a scam, plenty of people are outsourced for clerical work and various back office tasks, but like mystery shopping, it’s an area where the unsuspecting can be caught in an outright theft of their money.

With any work at home offer, look it over for the same signs I bring up about fraudulent mystery shopping companies. If you ever have to pay anything, walk away. No legitimate job should ever ask you to pay something out of your pocket before you start work. Companies may require you to take tests, whether it be a classroom exam or a drug test, but you shouldn’t have to pay for it out of your own pocket (at worst, it should be deducted from your first paycheck).

As with any job, check the company’s references and talk it over with your friends. If it sounds too good to be true, approach it with care. Any company that promises you riches, whether it’s the housewife in [your home town] making $20,000 a month or the stay at home dad driving a Ferrari, it’s just not possible (unless you’re running the scam).

Common Work at Home Scams

The basic idea because a work at home scam is to get you to send them money before you get paid. So anything where you buy supplies from the company, from stuffing envelopes to simple arts and crafts type of work, is a big red flag.

Multiple level marketing schemes are also red flags in the work at home space. Not all MLM programs are scams but many of them work off the same idea – people getting their friends to buy stuff from the company. The MLM programs that are legitimate aren’t work at home programs, they’re full time jobs.

Finally, there is always the classic stuffing envelopes work at home job. This would be a pretty decent job if you can get it, but all companies have machines that stuff envelopes for them… and certainly for less than $3-4 an envelope.

Work At Home Scams from personal finance blog Bargaineering.com.

Overpayment Scams

Posted: 12 Oct 2010 04:06 AM PDT

Kim Palmer at US News wrote about how Farrah, on MTV’s “Teen Mom” show, fell for a classic overpayment scam.

An overpayment scam is one in which the scammer sends you a check for more than the required amount, then asks you to send the balance back. Online it usually involves the sale of something expensive, a notebook computer or perhaps even a car, to someone in another country. The overpayment is designated for shipping, which the scammer wants wired to a “shipping company.” The check is a fake and, since it’s international, takes some time to cash. In fact, with international checks, banks sometimes will “cash” it before the funds are verified or transferred, then reversing it when they discover the check is fake. In the meanwhile, you send money to the “shipping company,” which you never see back.

Imagine if I say I’ll give you a $100 bill for something that costs $80 and then ask that you mail me back a $20. You’d probably tell me to jump off a cliff. If I gave you a $100 bill and asked you to give $20 to a stranger, you’d again tell me to jump off a cliff. Why am I paying you $100 when I should pay $80? Why don’t I pay you $80 and then pay the other person $20? Why does a single dollar come out of your pocket? Overpayment scams are very easy to spot in the wild. What makes them difficult to identify isn’t the scam itself, it’s usually your frame of mine when you see one. They change a few variables, replacing “friend” with “shipping company,” and replace $100 with a cashier’s check from a bank that may or may not exist, and suddenly we all become suckers.

The lesson of the day is that never:

Take more money than the agreed upon sale price,
Never pay someone else.

It’s bad enough when a seller rips you off by taking possession of an item and not paying for it, but this overpayment scam takes it another step and actually steals your money, rather than the item. Since most overpayment scams involve international parties, the probability that you’ll get any help tracking down your money is absolutely zero.

Have you ever seen an overpayment scam?

Overpayment Scams from personal finance blog Bargaineering.com.