Transcript: Thursday, October 26, 1 p.m. ET

Inside Job: Avoiding Work-at-Home Scams

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Audri and Jim Lanford
Co-Directors, Scambusters.org
Thursday, October 26, 2006; 1:00 PM

Had enough of the rat race? Maybe it's time to start your own business -- and many people have had success opening shop from within their homes. In our Inside Job special feature, we've gathered information you can use to learn the ins and outs of doing a home-based business right.

Audri and Jim Lanford are co-directors of Scambusters.org. They were online to discuss the pitfalls awaiting those who don't snoop out work-at-home scams -- and how to avoid them.

The Post's Annys Shin examined the topic of work at home scams in her latest entry to her consumer blog, The Checkout.

For more on entrepreneur ism, visit last year's Small Business 101 special feature. And there is plenty more information on jobs and careers in our online Jobs section.

The transcript follows below.

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washingtonpost.com: I'd like to start the discussion off with a general question about ScamBusters. Who are you, why did you start the web site and what do you consider the primary need you are attempting to address?

Audri Lanford: ScamBusters.org is a public service that we've been publishing for 12 years to help people protect themselves from Internet scams. We have about 2 million visitors and 110,000 subscribers to our free newsletter. Scammers are getting more and more clever, so we want to help people not get taken.

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Forestville, Md.: I'm retired and looking into working out of my home, something to supplement my retirement. I have been trying to do paid surveys and have yet to earn any money. Recently I've signed up for eBay. My question is can you actually make the kind of money they advertise that you can or is it just another scam?

Audri Lanford: Paid surveys will most likely not lead to earning any decent money. You might earn a few dollars and get a few products, but that's it.

You can earn money selling on eBay -- tens of thousands of people do. However, you have to know what you're doing. And, you do work -- it's not that you get money just popping up in your bank account.

Start small.

You can find some good advice by going to Ezine Articles and typing eBay into the article search.

http://ezinearticles.com/

Another legitimate way to earn money is to register with eLance.com. It is basically a marketplace for people hiring freelance writers, graphic artists, consultants, programmers, you name it. We have successfully dozens of people from eLance for years.

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Leonardtown, Md.: How safe is it to sell items on eBay?

Audri Lanford: Great question. There are millions of items sold each day on eBay, and the vast majority are bought and sold legitimately.

However, that doesn't mean that you shouldn't be careful. You definitely should.

We wrote a ScamBusters issue awhile back about online auctions that I think you'll find useful. It's called "Online Auctions: Deal or Steal?" You can find it here:

http://www.scambusters.org/Scambusters43.html

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Washington, D.C.: I've heard these "Secret Shopper" programs you can sign up for are fishy? Are they legit? Or, are some OK and others not reliable?

Audri Lanford: Secret or Mystery Shopping is a field filled with scams. However, we recently did a special issue of ScamBusters where we interviewed an expert on the topic, Cathy Stucker, and I was surprised to learn from Cathy how much was legitimate. Cathy explained in detail what the scams are and how to avoid them. You can find the article here:

http://www.scambusters.org/mysteryshopper.html

We did an update on another secret shopper scam in yesterday's issue, which you can find here:

http://www.scambusters.org/secretshoppers.html

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Manassas, Va. : Is there anything illegal about participating in the "classic" work-at-home businesses, like trying to get people into envelope stuffing, etc.? Is it against the law to recruit for these things, or is it just immoral (taking advantage of greedy fools)?

Audri Lanford: It depends. Envelope stuffing is definitely a scam -- we've never seen a non-scam version.

Many scammers are incredibly clever and stay just within the law. So, you need to know what the scams are to protect yourself and not rely on things being illegal.

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Washington, D.C.: Are there clear "red flags" you can point me to so when I am presented with an opportunity I know to be wary of it?

Jim Lanford: First, if it comes from spam it is a scam.

Then check out: Top 10 Work At Home and Home Based Business Scams

http://www.scambusters.org/work-at-home.html

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Washington, D.C.: Who are you to say what's a scam and what isn't, so long as it's legal?

Audri Lanford: We haven't gotten this question in a long time...

We're the founders and editors of Internet ScamBusters, the #1 publication on Internet fraud. We've been publishing ScamBusters for 12 years as a public service, and have about 2 million visitors and 110,000 subscribers to our free weekly newsletter.

Hundreds of very reputable newspapers, radio show hosts, magazine editors, etc. (such as the Washington Post, Forbes, the Wall Street Journal, New York Times) have found our advice valuable. If you don't, that's fine. :)

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Atlanta, Ga.: For the last 25 years, I have held positions in outside sales, which requires making telephone cold calls to generate new business. I know what it takes and I know how it's done.

Here is something else to add to you scam list: the assumptions used for income potential. My brother was recently looking at a work from home sales position to businesses and he was running it by me. The info said if you make 100 phone calls per day, you would actually talk to 20 people, you would get 5 appointments and would be able to close on 2 or 3.

As a professional sales person, I can tell you right now that it is virtually impossible to make 100 phone calls in a day, assuming they are talking about a normal 8 hour work day (since the calls are to businesses, not homes, that can be called in the evening). When I have really busted my can making calls, the best I have ever been able to do is 75. And if you get 5 appointments that take you away from the phone, there is no way to make 100 calls.

For those that know nothing about sales, its easy to bypass the main assumption of 100 calls a day, which makes the rest of the income formula invalid. To top it off, this "company" had other earmarks you point out on your web site. He would have had to go for 2 weeks of training in San Francisco where he would have to pay for airfare, hotel and meals, PLUS $500 for the training! My 3 words to my brother: Scam, scam, scam!

Audri Lanford: Thanks for pointing that out. We agree. I think some of the other numbers are a bit high as well.

Plus, cold calling is perhaps the worst way to get leads and appointments -- there are much better ways like giving away free reports, audios, or having a web site and email newsletter filled with great information. That way, you build a relationship with people over time so that when they are ready to buy, you'll be an obvious choice. MUCH better than interrupting their dinner.

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The WAHI: Audri and Jim,

I always see commercials for The Work at Home Institute, making grand promises of earning tons of money. Are you familiar with them and are they for real?

Jim Lanford: I have not heard of them. If it sounds too good to be true, it probably is.

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Landover, Md.: Simply put, I am very eager to start my own (home-based) business. It will be to add to my existing income. I am a 36-year-old woman with a 40-hour/week, full-time job but have the time to put into starting my own business.

I want to learn about grants and how to write grants -- is that a waste of time? I eventually want to have enough money to open my own evening lounge -- another place of relaxation and socializing after work. I am in the process of applying to be a notary public. I will begin a residential real estate appraisal course on Nov. 18 until Feb. 10 -- every Saturday.

I'm not sure yet whether or not I will take the real estate sales course after that. I guess I want to know if you all can suggest any legitimate home businesses that I can start with. I have inquired online and have received over 1,800 emails and averaged six calls a day! I can't decipher what's good and what's not and it has just been overwhelming.

Thank you for any and all information and advice.

Signed, lookn4prosperity

Audri Lanford: First, I think you're doing too many things (although I appreciate your enthusiasm a lot -- and that's a big key to success).

Pick one thing and focus on it -- you're more likely to be successful. Read this transcript -- I think you'll find some useful advice. Good luck!

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Washington, D.C.: You say scammers are growing more clever. Is it that, or are people just growing more gullible and/or desperate to make more money?

Jim Lanford: Scammers are getting more clever. Phishing scams are getting harder to distinguish every day. Yes, people are still gullible.

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VA: What kinds of opportunities are there for people who would prefer not to have their own small business to run from home, but still have professional-level skills?

Audri Lanford: We already mentioned eLance -- and there is also Guru.com, and if you're a programmer, rentacoder.com.

Another option a friend recommended today that I hadn't heard of before (but I trust his recommendations) is Ether.com. It allows you to set a price for phone consultations -- by the minute or the session. You might look into that.

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Bluemont, Va. : Slightly off-topic, but hopefully not too much. I am a working adult interested in getting an associate's degree in business from home. I get a lot of solicitations for programs for doing this -- but while I would like to achieve this as easily, quickly and inexpensively as possible (I don't have a lot of extra time or money) I do NOT want a "fake degree." Can you help with ideas?

Jim Lanford: First, if it comes from spam it is a scam.

There are legit university and colleges offering online learning. The best known is: http://www.phoenix.edu/

Note: it is hard to get a .edu domain name without accreditation.

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Washington, D.C.: Why can't these people (scammers) just be shut down?

Jim Lanford: Scammers change their identity weekly or daily. Often they are in another country. This is why we try to educate our readers on scammers' techniques and principles rather than specific names.

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Bethesda, Md. : What online-based work-at-home businesses DO you recommend? Both in terms of legitimacy and pay out with regard to time required.

Audri Lanford: We personally have been working from home for years and love it.

Personally, I'd avoid anything pitched as a business opportunity. There are just too many scams (although there are certainly legitimate biz opps).

A few options in addition to what we've already discussed:

- create valuable web sites and earn money with Google AdSense. We offer a free mini-course on this at:

http://about-adsense.com/

- write an ebook on something you are passionate about. We've published 22 ebooks -- you can see some of them on the nav bars at the ScamBusters.org site.

- Buy and sell on eBay (as we've discussed)

- affiliate programs (many people earn a lot of money promoting affiliate products).

Hope that helps.

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Arlington, Va.: I read the article on The Checkout blog about scams and now am convinced that none of these web-based home businesses are legal. Is this true? If not, are there some you would recommend?

washingtonpost.com: Here's a link to Annys Shin's article from The Checkout .

Audri Lanford: We know many hundreds of people who are earning great, full-time livings working at home running Internet businesses. None of them, however, have participated in the web-based biz ops. Also, they all WORK -- money does not just pop into their bank accounts.

See our other answers for more on the legitimate things you can do to earn money legitimately.

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Washington, D.C.: I frequently get e-mail inviting me to investigate some sort of photography business. Usually says certain industries, I assume mortgage, insurance, etc. are in constant need of photographs. All that is needed is a car and camera. What's that about?

Jim Lanford: Remember, when it comes from spam, it is a scam. You should not pay an upfront fee. See the reference to Elance (http://www.elance.com/) below.

Jim Lanford: This applies to most of the work-at-home questions we have received. It will be work, and it won't be handed to you on a silver platter.

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Gaithersburg, Md. : How did you two get into this type of work? Were you burned yourselves? Also, is ScamBusters a full-time thing?

Audri Lanford: We started ScamBusters 12 years ago after seeing 3 friends who were about to get ripped off in one week. This was quite early on, and we recognized that scams would become a bigger and bigger problem on the Net. So, we decided we could do something about it or not.

The result was ScamBusters.org. It is a public service for us (our way of giving back). (We're online publishers with about 100+ web sites and 23 ebooks).

Yes, we have gotten burned ourselves occasionally over the years -- and we're very public about this, letting our subscribers know when it happens. The reason is that so many people feel stupid when they get scammed. We figure that if scammers occasionally even get us, others will be less intimidated when they get scammed.

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Well then...: How would you recommend using online mass mailings in such a way as to NOT get thrown into someone's spam filter? It's an efficient and inexpensive way to make contact with customers.

Jim Lanford: Spam is unsolicited email. You did not ask for it. It is such a big problem, that virtually all legitimate email will get caught in a spam filter somewhere.

You should look for a legitimate company that insists on opt-in or verified subscribe procedure. We use http://www.aweber.com/.

They have a feature that will check your email to see how spam filters will rate it. With 110,000 subscribers, and talking about scams, we always get caught by some filters. Remember there is a huge difference between spam and opt-in email newsletters that people have asked to receive.

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Wheaton, Md.: Is is safe to assume that any "get rich at home" offer is probably a scam, especially if they're asking for money up front?

Audri Lanford: Yes, any get rich at home offer is most likely a scam -- especially if it is sent via spam.

However, don't confuse legitimate advice to work at home with these get rich quick offers. The legitimate ones are never sent via spam. I believe there are many people who have had great success working at home, and they legitimately do charge to provide valuable help to others.

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You've been scammed?: Wow. Which one did you fall for and how? Yes, I am following this chat carefully...

Audri Lanford: Yes, we have. Obviously NOT by the Nigerian scam or any of the obvious ones.

We got taken buying stuff on eBay once -- the scammer was incredibly clever. The other time we got scammed was from a supposed customer who ordered one of our products (sent to Africa -- this was a long time ago), and the credit card was no good.

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Chantilly, Va.: I have seen ads looking for people to drive around with ads on their cars. I know the ones that promise a "free car" are definitely not worth taking seriously, but are there any legitimate opportunities to make money by displaying advertising?

Audri Lanford: We haven't researched this personally, but a friend who has says there are some legitimate ones. But again, I'd be VERY careful here.

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Brooklyn, N.Y.: There are so many offers about home-based job opportunities. How do you distinguish between the genuine and scams?

Audri Lanford: I think we've answered this today. You can read more here:

http://www.scambusters.org/work-at-home.html

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Austin, Texas: I recently got my MBA and after a few months in corporate America, I desperately want to get out. Any advise on how I can leverage my background to get out of the rat race and work from home?

Jim Lanford: Start to moonlight. Don't quit the day job until you start earning enough money to live on over an extended period of time. Find some other entrepreneur to be your mentor as you get going. You'll find him/her at your local civic club, Church etc. Not everyone has the temperament to be 'self unemployed'

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Alexandria, Va.: If I see something that does look interesting or at least within the realm of possibility, is there a good web site for researching whether the specific company/merchant/firm etc., is legit?

Jim Lanford: Look at these two articles:

http://www.scambusters.org/work-at-home.html

http://www.scambusters.org/work-at-home-jobs.html

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Audri Lanford: Time to wrap up -- thanks everyone! This has been fun.

We do advise you take a few minutes each week to protect yourself from clever scammers by subscribing to Internet ScamBusters. Many scams are obvious, but many aren't. Our subscribers tell us they really appreciate knowing what's new so they don't get taken. You can subscribe free at:

http://www.scambusters.org/

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Editor's Note: washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.


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