The continuation of the detailed List of the Most Common Work-at-Home Scams on the Internet …
5. Medical Billing Work at Home Scams
The pitch: The scammer claims there is a crisis in the health care system and you can make big money by starting a home business providing electronic billing services, accounts receivable and electronic insurance claim processing to medical professionals. For your investment of $2,000 to $8,000, you are promised software, training and technical support. Unfortunately, you are not promised any clients.
In a study, the Federal Trade Commission (FTC) has said “Few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues - let alone recover their investment and earn a substantial income. Competition in the medical billing market is fierce and revolves around a number of large and well-established firms.”
6. Multi-Level Marketing (MLM)-Style Pyramid Scheme Scams
Typical Ad -- "Our products make it possible for people like you to earn more than they ever have in their lives! Soon you can let others earn money for you while you and your family relax and enjoy your affluent lifestyle! No experience necessary."
The pitch: You will make big money selling the products or services of a particular company.
Multi-level marketing, a direct sales system, is a well-established, legitimate form of business. Many people have successfully sold the products of reputable companies to their neighbors and co-workers. These people are independent distributors who sell popular products and also recruit other distributors to join them. The way MLM works is that as a distributor, you earn commissions both on your sales and on the sales of the people you recruit to become distributors.
On the other hand, illegitimate pyramid schemes can resemble these legitimate direct sales systems. An obvious difference is that the emphasis is on recruiting others to join the program, not on selling the product. For a time, new recruits who make the investment to buy product samples keep money coming into the system, but very few products are sold. Sooner or later the people on the bottom are stuck with a saturated market, and they cannot make money by selling products or recruiting. When the whole system collapses, only a few people at the top have made money—and those at the bottom have lost their investment.
The problem is that some MLM businesses are just pyramid schemes, frauds where the products and services only exist to make the opportunity look legitimate. The scam is that only the people at the top of the pyramid make money. Everyone else is just a bagholder.
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