How do you spot a scam?

It�s not always easy to spot a scam. Many times, checking with the BBB and other resources simply is not sufficient because the scam is too new. But when you are looking for a work at home opportunity of any kind, it helps to know what red flags to be aware of, whether in a job or business opportunity.

The first rule of thumb is can you follow the money? That is, can you figure out how the company will be earning money from your efforts? If you�re offering lifetime free services to someone and earning a large commission every time someone signs up, where does the money come from? It�s easy to tell yourself it can�t be a scam because no money is being spent, but you need to consider more possibilities. What information are you giving them? What about your customers? Can that be used against you? Do you have to download anything at any point? Spyware and/or affiliate commission theft could be the goal.

Second, is the pay commensurate with the effort you are putting forth? If they are offering 2-3 times the going rate for a job, but you have to pay for training, it�s probably a scam. They�re relying on your need to earn money and desire to earn lots of it with little effort to cloud your judgement. Similarly, if you are earning commissions for your efforts, does it look like the company you will be representing can possibly be making a profit? This is very similar to point #1 above, but worth considering on its own.

Next, what kinds of promises are being made to you and to the customer? Are they even remotely possible? This can be either a bad case of exaggeration, which may concern the FTC, or a sign of a scam. In either case you do not want to be involved.

In the case of home business, I am always wary of pre-launch hype from marketers I have never heard of. If they don�t have a name in the business, how do I know their product will be any good? It could just be a way to get information, get you to download something, etc., rather than the introduction of a real, quality product. Pre-launch marketing does get used by reputable marketers too, but not very often. After all, if you�re offering a quality product do you really need to get people excited about it before they can see it. It might be fun, but not all that necessary. Pre-launch hype also has a way of annoying potential customers, as they wade through months of excessive advertising and spam about the product. It generally makes much more sense for a company to launch a product when ready, rather than give a buyer time to change his or her mind because they�re tired of the hype.

There is no guarantee, however, that a given opportunity is a scam just because it looks like one. It is possible to misjudge, but you have to decide if you would rather miss an opportunity that could hurt you financially or destroy your reputation if it is a scam than take a chance on it. If too many warning flags go up, it is probably not worth it in my opinion, but you have to decide for yourself.

Stephanie Foster is the owner of Home with the Kids, a resource that knows that there's more to staying home with your family than just business. From money saving tips to parenting and marriage tips, to work at home jobs and businesses, you can get information and support here. You can visit the site at http://www.homewiththekids.com.

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