The Federal Trade Commission has proposed tougher rules to protect consumers who are targeted by work-at-home scams. The new rule changes are proposed to go into effect later this year.
If approved, the rule would require any company promising earnings from their business opportunities to provide documented proof of those claims. Currently, the FTCs Franchise Rule only provides for examination of business opportunities that require an investment of more than $500. The change would remove that minimum amount and open many more work-at-home offers to federal scrutiny.
The proposed rules are getting the strong backing of many state attorneys general around the country, including Mike Beebe of Arkansas. Beebe says work at home scams are a growing problem, but consumers can protect themselves by asking a few questions:
• Can the seller prove that most of the current participants actually earn the income promised by the seller?
• What is the total cost of the work-at-home program, including supplies, equipment and membership fees?
• What tasks will I have to perform?
• Will I be paid a salary, or will my pay be based on commission?
• Who will pay me?
• When will I get my first paycheck?
"While there are legitimate home-business offers, others that promise fast money for minimal work are always too good to be true," Beebe said. "You wont discover the hidden pitfalls in most business opportunities until youve spent your own money, only to realize that you wont break even, let alone turn a profit."