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This article was featured in the June 2009 issue of Consumer Reports magazine.

Beware of work-at-home stings

Last reviewed: June 2009
Illustration of a man behind a mound of envelopes
Illustration by Kim Nelson

This article is the archived version of a report that appeared in June 2009 Consumer Reports magazine.

The Federal Trade Commission has gone after some 500 work-at-home schemes in recent years. Still, the recession and joblessness are mighty incentives for people to try programs that promise easy money. Our reporter sampled a few such offers. The result: He won't be giving up his day job.

'Stuff envelopes! Get paid!'

The setup

"Get paid $5 per envelope, up to $1,276.57+ weekly … stuffing envelopes and mailing company circulars," said an EASYHomeJOB online ad, which also said you could earn as much as $350,000 a year.

The hook

We signed up for a free trial membership but then had to pay $67 for the EASYHomeJOB System, sold by IVI Global Enterprise of Buffalo, N.Y. The company, like the others mentioned here, had a Better Business Bureau rating of F.

The sting

The payment bought us access to a Web site with a guide to selling get-rich-quick information. Here's how it works: You place classified ads—"EARN $1,500+ Weekly"—online or in print to get customers to send you $5, for which you'll mail them reports such as "How to get big dollars in your mailbox every day!" and circulars for products like the EASYHomeJOB System.

We tried to contact the company by phone and e-mail but got no response.

'Assemble products at home'

The setup

"Stop sending money to 'stuffing envelopes' scams … make money by assembling products in the comfort of your own home," said Wes-State Mortgage, of Eugene, Ore. We spent $26 for its Home Employment Directory, which lists companies seeking home assemblers.

The hook

We chose one listed company at random, Gone Fish'n Tackle, of Austin, Texas, and went into the business of tying fishing flies. "If you make 3,000 flies, you will be paid $1,500 … make 20 to 40 flies per hour," the listing said.

The sting

We paid $50 to Gone Fish'n for a starter kit that enabled us to make 24 flies. The company would pay us $12 for those, if they passed inspection, leaving us $38 in the hole. To continue, we'd have to keep buying materials: $40 for the makings of 144 flies. We'd have to spend $890 on materials, including the initial outlay, to produce 3,048 flies, for which we'd be paid $1,524. That nets $634 for about 190 hours of labor, or slightly less than $3.35 per hour, about half the federal minimum wage.

Heather Smith, president of Gone Fish'n, says the company sells 1,500 starter kits per year, but only 20 regulars have actually made a business of selling flies back to the company. "Selling of the kits is where we make our money," she says, adding that dissatisfied customers can get a full refund within 45 days of purchase.

'Start an Internet business'

The setup

"Learn how to make $107,389 in six months, just filling out forms and doing searches on Google and Yahoo," said an ad for the Google Money Tree kit. The fine print disclosed that it's not affiliated with Google. A ticking "Order now!" clock added urgency; the price of the "free" CD kit would shoot up to $197 in just 15 minutes.

The hook

You must give your credit-card number to pay $3.88 shipping for the CD. By so doing, you consent to let Google Money Tree charge your account $72.21 a month for access to its Web site if you don't cancel within seven days.

The sting

The Web site and compact disc give disorganized information on selling on the Internet. The BBB has 478 complaints on file against the company related to unauthorized credit-card charges; it failed to respond to 460. Calls to the company for comment took us to a call center in an undisclosed location. Managers promised to pass on our request to the company.