I've not provided a long list of named companies to avoid as most will fall into one or more of the categories below. A few examples are included for illustration, but if you're not sure about business details you've received, e-mail me for specific information

Homeworking Scams fall into three main categories; directory scams, recruitment scams and craftwork scams. You can find full details of these types of scams, and several examples, on our homeworking site at http://www.homeworkinguk.com

Directory scams - any company advertising the choice of different types of work will almost definitely be selling a directory. For a fee of £10-£25 you will receive a directory full of other companies claiming to offer work from home opportunities. These companies, if they exist at all, will demand a registration fee but there will be no work forthcoming. Do not be persuaded by the promise of a refund if you don’t find work; once you have parted with your money you will not get it back.

Recruitment scams are far more serious than most other homeworking scams, in that you are either being duped into handling stolen funds or you give sufficient information about yourself for your own identity to be stolen. The chance to earn a large amount of money for doing an easy job at home that requires no qualifications, such as stuffing envelopes, sounds very attractive. All you have to do is pay a nominal registration fee, probably in the region of £15-£20 and you will soon be earning hundreds of pounds for just a few hours work. But all you are likely to get for your money are instructions for placing more recruitment ads which then implicates you in the scam. This is covered in more detail at http://www.homeworkinguk.com/employmentscams.html

Scams involving business opportunities may be more subtle and more varied, but generally if it seems to be too good to be true they usually are. If a company is looking for any money up front, the following checklist may help you avoid getting caught out. If you can't answer yes to all of the following, give it a miss, unless you're happy to risk a small sum giving it a try.

• Do the company provide a telephone contact number on their advertising? Test it out. Are the company helpful with your enquiries?
• Do you fully understand what you are buying before you send your money? If not, it's probably because you wouldn't buy if you knew.
• Can they provide you with names and contact details of satisfied agents?
• Is the product good value, or are you just being enticed into the opportunity to earn from signing up others?
• Are you happy that you are not going to be required to buy large quantities of a product yourself every month just to meet targets? If you aren't going to be getting repeat business will you be able to find a large enough supply of buyers for your product or service?
• Would you be happy to buy the product/service even if there were no business opportunity attached?
• Are you convinced you can make it work or just telling yourself that it doesn't matter, because they have a money back guarantee?
• Has the business received a good review in one of the quality business opportunity magazines?
• Is the business legal? If not they are likely to be closed down, and you'll lose any money you may have invested.

Avoid companies offering get-rich-quick schemes. In almost every case they are merely selling you a manual containing nothing you don't already know. Often you then need to sell the same manual, or carry out impractical instructions. It is extremely rare that you will earn vast quantities for very little work.

Money back guarantees are rarely worth the paper they are written on as there are usually so many get out clauses as to make them impossible to claim under.

Craftwork scams – adverts for doing craft work at home often appear in local and national newspapers or on the Internet and look very convincing, with testimonials from other satisfied workers and all kinds of guarantees. The apparent opportunity is to generate a good income by making craft items, such as jewellery and toys, and returning them upon completion to the company. For a small fee you will receive a start-up kit and your lucrative home business will take off. However, in reality you will either receive nothing at all, or a kit will arrive with substandard materials or missing instructions. The items will take much longer than promised to make up and your efforts will be rejected on the grounds of quality standards.

Types of Companies to avoid

The following list refers to business opportunities. For examples of companies claiming to offer homeworking opportunities check out the homeworking site http://www.homeworkinguk.com

You should always check out www.asa.org.uk if you are considering any business. Here you will find a very long list of adjudications following official complaints about advertising. Many business opportunties are listed here. The list covers every case investigated since 1997. Be very careful if they have been adjudicated against. 

Also avoid:

• Any company where the product is secondary to the "opportunity" or even non-existent, where you make your money from recruiting not selling. This is particularly common on the Internet where you may pay large sums to buy a replica website and earn far more whenever somebody else buys a replica site from you rather than from buying the products advertised on the site. Current examples include host4income.com (see http://www.findhealer.com/wwwboard/supersite/messages/216.html for further details)and Armchair Tycoon.
• Any company where the product is overpriced to cover the commission payments. Why would anyone buy a product or service that was more expensive than the identical product from the competition? You may find a few people who are unaware of prices initially, but long term you're causing unnecessary problems for yourself. This ploy is often used to sell websites that provide web building software for creating a website in minutes without any previous knowledge.
• Any company promising vast sums of money in X months time. Do the figures add up? (see NMG below)
• Any overseas scheme not fully compliant with UK law (often from offshore tax havens)

Examples:

Cream of Egypt or Bodybite or Zaffaran Trading Ltd or Aurum Marketing or any similar schemes. These companies claim to offer market research posts. By sending off for kits from them for £40 each, they will send you £80 for completing a product awareness form. You'll find they've been closed down before you get your money back. Bodybite (Aurum) already has.

"How to Make £25 from each "Sold" Sign that you see". You may well have seen this advert, offered by many different companies. Every wondered whether it really works? The following is a quote from somebody who sent off for this one.

"Firstly you have to wait for the houses "for sale" to actually be SOLD. Secondly, the specially-prepared letter you send to them is a letter welcoming the new occupants to the area and introducing them to some of the shops & services in the area. Before doing this, however, you have to contact lots of shops and services and persuade them that, in return for advertising their services for free to new homeowners in the area, they should give you a percentage of the sales arising from your letter. Although the idea may be a good one, I feel that the advertising of this scheme is extremely misleading."

The New Millenium Group Inc (NMG)offer you the chance to buy a silver ingot for £62 and receive over £10,000 over a fourteen month period. Despite claiming to comply with all MLM laws this is clearly mathematically impossible. The product is only worth about £5 and there is no way the opportunity can possibly work, even if it isn't closed down in a matter of months. A similar offer is being made by World of Art Distribution whereby you purchase a personalised portrait for £60 and supposedly receive £3,522 over 12 months. Totally illegal in the UK. 

There are also many chain letters doing the rounds - you may recognise the names Sally Brooker, David Rhodes or Edward L Green. You are asked to send £1 to each person on the list and then circulate the letter to 200 or more people. You will spend a fortune on postage and mailing lists and get nothing back. Don't do it! The only use for these lists is to use the names to compile your own mailing list.

Sources of Advice

There are several things you can do if you feel you've been caught out. I would suggest that you get hold of a free booklet from the National Group on Homeworking called "A Practical Guide to Dealing with Misleading Adverts and Bogus Homeworking Schemes". E-mail for a copy on homeworking@gn.apc.org or telephone 0113 245 4273.

If you were responding to an advertisement in a newspaper or magazine, you should write to the editor asking them to remove the advertisement from future use. You should also report them to the Advertising Standards Authority (ASA). ASA also covers direct mail so if you responded to a letter you received you should also contact them. Their web site at www.asa.org.uk gives you all the information you need and also lists ever adjudication made since 1997.