September 2002
Is “Work at Home” Too Good to Be True?

Have you noticed signs posted that offer “Work at Home” business opportunities where you could earn a substantial amount of money? Prompted by appealing phrases such as “financial freedom” or “financial success,” have you considered calling the toll-free number on the sign or thought about looking at the posted website? Have you been invited to a “free seminar” at a local hotel to discuss a new business opportunity?
In this time of increased unemployment and downsized companies demanding more of existing employees, working at home can sound very attractive. However, “work at home” opportunities often are too good to be true and you should proceed cautiously before literally buying into what could be false promises.
Business-opportunity fraud is one of the top 10 Wisconsin consumer protection complaints. Wisconsin consumers from every corner of the state complain they paid significant amounts to invest in a business that had little or no value, they received none of the promised assistance from the promoters of the business venture, they found out the hard way there was no market for the business venture being marketed, or they were required to purchase expensive equipment that produced little or nothing in value.
For example, a consumer in Columbia County complained of paying more than $18,000 for what was promised to be a great market for vending machines, plus the offer of significant marketing assistance. The consumer said the promoter offered little marketing help and that the market was virtually nonexistent because of saturation by existing companies.
What should you look for in a work-at-home opportunity? First, ask for the names of other investors and call them. Ask what the time commitment was and what support the promoter provides. Ask what the total cost was for the training, products, and equipment.
Second, ask the promoter to prove the income claim. Ask what percentage of people actually achieved the level of income and the time in took to achieve the level of income.
Third, ask for market surveys so you can judge the business potential.
Fourth, ask whether other competing distributorships will operate in your area.
Fifth, ask questions about the owners’ and officers’ level of experience. Do they really know what they are saying? How long have they been in the business?
Sixth, find out if the promoter has a refund policy and if any complaints have been filed with the Wisconsin Bureau of Consumer Protection (1/800-422-7128).
Finally, read the contract carefully and get all promises in writing. The written contract will probably limit the promises made to you and say that it represents your total agreement with the promoter. This means the oral promises will have no legal effect.