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By Laura T. Coffey
TODAY contributor
updated 8/10/2009 1:07:59 PM ET 2009-08-10T17:07:59

Herbert Farkas is a smart guy. The retired mathematics professor and software engineer has never been easy prey for scam artists. And yet, a new work-at-home scam is so insidious that it’s claimed hundreds of victims — Farkas included.

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Here’s how it works: A Las Vegas-based outfit that calls itself Google Money Tree promises to show people how to make some extra income from their home computers by turning Google into an ATM of sorts. All you have to do is spend a small amount of money — typically in the $1 to $4 range — for a kit that will spell out how to get started.

Farkas was intrigued, so he ordered a kit. A few weeks later, he was horrified to find that Google Money Tree had charged him $72 for a “membership” he knew nothing about. That $72 would have become a recurring monthly charge had he not caught it and fought it with his bank.

“I should have known better,” said Farkas, 75, of Missouri. “But by putting ‘Google’ in front of their name, Google Money Tree, it sort of implies that they’re part of that company. It made me curious.”

Last month the Federal Trade Commission announced a crackdown against Google Money Tree and other companies that are taking advantage of many people’s need for extra income in this down economy.

“To con artists, today’s challenging economy presents just another opportunity to play on consumers’ worry and bilk them out of money,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection.

To date, Google Money Tree’s Web site is still up and running and luring customers. And Google Money Tree is by no means the only work-at-home scam that’s tripping people up these days. Untold numbers of them are lurking on the Internet and in people’s inboxes. The Better Business Bureau (BBB) has been receiving thousands of complaints from victims of such scams.

“[We are] very concerned about seeing a rise in instances of fraud targeting job hunters this year in light of the increase in the unemployment rate,” said Alison Southwick, a spokeswoman for the BBB.

To protect yourself from some of the most common work-at-home scams, consider these tips.

1. Check out the company. Absolutely take the time to research the business offering the work-at-home position. (Note: If you can’t find a company name anywhere, run away!) If you do have a business name, though, a quick online search may lead you to dozens, if not hundreds, of complaints in a matter of minutes. In addition to doing a general Internet search, you can visit the Better Business Bureau’s Web site to view complaint histories.

Video: Just looking for honest work

2. Don’t spend money to get a work-at-home job. View it as a huge red flag if the would-be employer expects you to pay out of pocket for assembly or craft supplies, photocopies, envelopes, labels, software specific to the job, training kits or training sessions being offered at a “special rate.” Don’t pay for the privilege of being interviewed for a job, either. Recognize that you could unwittingly be giving away your personal account information and opening yourself up to the headache of recurring charges when you purchase something from a would-be employer. That’s how all of those Google Money Tree victims got hit with all of those $72 charges.

3. Remain on high alert for hype. Many fraudulent schemes promise to pay thousands of dollars for a minimal amount of work per week. They also may stress that you don’t need any special skills or experience. All of this falls into the “too good to be true” category — and you know what that means.

4. Ask important questions. Get answers to these questions from the employer: What exactly will I be expected to do on a daily basis? Will my pay be salary-based or commission-based? Who will be paying me? Does your business have a Web site where I can learn more about this position?

5. Be wary of at-home offers from overseas businesses. If such businesses formally exist at all, they may be based overseas to escape prosecution from U.S. authorities. No matter what, follow the steps in Tip No. 1 to research any potential employer.

6. Protect your personal information. If the employer asks you for your Social Security number, bank information, credit card number or driver’s license number very early in the process — say, before you’ve been offered a job, or maybe even before anyone has interviewed you — DO NOT share the information. Only provide your Social Security number to an employer for tax purposes once you’ve been hired and you know the business is legitimate.

7. Recognize other red flags. They include: being alerted to a job through an unsolicited e-mail message (i.e., spam!); noticing that the job description is extremely vague; or learning that the position involves depositing a check from the company into your account, keeping some of that money for yourself and wiring the rest to other sources.

8. Be aware of common scams. Some widespread work-at-home scams ask you to: stuff envelopes; do data entry or process claims or rebates after you’ve paid money out of pocket first; do assembly work after you’ve bought supplies to make crafts; recruit others to join the business; repackage and ship items to overseas addresses; or make copies of a chain letter and send it along after you’ve paid for a mailing list and labels. Scams that promise to help you make money quickly and easily via the Internet are becoming increasingly common, said Southwick of the BBB.

9. Know where to turn if you really and truly want to work from home. If this column is depressing you to no end, consider these options:

  • You may be able to work from home if you become a freelancer or an independent contractor in your field.
  • It’s also possible to find a position with a legitimate company that will let you work from home. Many large and small employers offer telecommuting opportunities to trusted workers, so ask about this if it interests you.
  • It also might be worth your while to check out FlexJobs.com. By subscribing to this Web service for $14.95 a month or $49.95 a year, you’ll have access to online telecommuting job listings that have been screened before being posted. The site has no advertising on it; it makes its money through subscriptions, and its screeners are trained to spot legitimate opportunities and avoid bad seeds. Just be sure not to keep paying recurring subscription fees after you no longer need the service.

10. Take action if you’ve been victimized. File online complaints with the Better Business Bureau and the Federal Trade Commission. You also can contact the state consumer affairs department, state attorney general’s office and county district attorney’s office where the company is located, as well as the advertising manager of the publication that ran the employment ad. If mail fraud was involved, report that to the U.S. Postal Inspection Service.

Sources and resources:

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