Trading Standards Service    

 

 

 

 

Our Advice Sheets

Homeworking schemes

Have you seen an advertisement, received an email or been handed a leaflet or business card claiming that you can earn money from home or in your spare time? You need to establish if this is a legitimate business venture or a homeworking scam. The most common advertisements offer work stuffing envelopes and are usually scams.

These envelope scams rely on lots of people sending off their stamped addressed envelopes on the promise of high earnings, but in reality you are unlikely to receive any payment and may be recruited to become part of an illegal pyramid selling scam.

Other scams involve assembling products at home where you often have to buy expensive kits yourself, which ultimately fail the quality check, regardless of how well they are assembled.

There are steps you can take to try and ensure the company you are dealing with is legitimate.

Remember, if it sounds too good to be true, it usually is

In the guide
Typical scam homeworking advertisement
Envelope stuffing scheme
Assembling products at home schemes
Homeworking checklist
Homeworking scam - who do I report it to?

Typical Scam Homeworking Advertisement
You may have seen this type of advertisement before.  They appear in the jobs section of the local newspaper, on information boards in your local store, a small flyer delivered to your home, placed on the windscreen of your car or over the internet. 

HOMEWORKERS REQUIRED URGENTLY

EARN £500 A WEEK FOR FILLING 500 ENVELOPES

NO QUALIFICATIONS OR PREVIOUS EXPERIENCE NECESSARY

THERE ARE LOADS OF COMPANIES AND CONTACTS OUT THERE AND WE NEED YOUR HELP!

TO START EARNING CASH SEND A STAMPED SELF-ADDRESSED ENVELOPE TO P.O. BOX 000 ANYTOWN OR PHONE ANYTOWN 000666 FOR DETAILS.

 

In times of financial hardship, people are drawn to advertisements of this type which promise an easy way to make a lot of money at home.  The advertisements may be worded differently to the example, but the common thread is that they promise high earnings for relatively little work, an up-front fee is usually payable and the details of the actual work to be done is vague.

Envelope Stuffing Scheme
The advertisement will give you sufficient information to capture your interest but you will not find out how the scheme works until you have made contact with the organiser and paid the required fee. 

The advertisement will prompt you to ring a contact number and then you will be required to send a stamped addressed envelope (SAE) to the organiser for more details.  Documents will be sent to you, using your SAE that promise the opportunity to earn a significant amount of money. The documents are likely to state that you will receive a batch of envelopes, already addressed and stamped and you won't be required to ring anyone or chase anybody up.  The wording of the documents is designed to lure you into sending an administration or registration fee so that you can obtain further information on how the scheme works.

The wording of some schemes is very clever - read it carefully and look for the catch.  For example, some schemes may say you are required to 'secure' envelopes - this does not mean sticking them down, but obtaining them.

You send off your fee and then receive the full details of the scheme. At this point you will discover that you are expected to become a recruiter for the scheme, rather than carrying out work.  You are required to place your own advertisements in local shops, papers, etc., asking people to send you their SAEs, in the same way you did when you first saw the advertisement.

You wait for people to read your advertisement and send you their SAEs. When you have collected the minimum number, you parcel them up and send them off to the organiser for your promised commission, which you are unlikely to receive.

When the organiser receives your bundle of SAEs, it uses them to write to those people, inviting them to become recruiters, send the organiser their registration fees and so the cycle begins again.

This type of envelope scheme is just one of many, although it is probably the most common type. Other schemes involve:

  • filling the SAEs you receive with 'circulars' or other advertising material
  • offering to supply you with a book or list of 'homeworking opportunities' - this is likely to just be a list of lots of other similar envelope schemes
  • you pay for the starter pack and any work you do addressing envelopes is continuously returned to you as not of the required quality therefore you don't get paid.

Assembling Products at Home Schemes
Other homeworking schemes, advertised in a similar way to the envelope schemes mentioned above, require you to buy kits for assembling products at home. The assembled goods are then returned to the organiser for payment. The products can include, amongst other things, lampshades and Christmas decorations.

So how do these schemes work?  You respond to advertisements which appear in local papers or on cards in shop windows.  You send your SAE to the organiser and receive your initial paperwork. You may be required to pay a registration fee and will also have to buy the un-assembled products in kit form.

Once the kit is received, you will be expected to assemble the products and return them to the organiser.  The documents will state that for every correctly assembled product, you will be paid a fee.  However, the organiser has complete control over whether the product passes their 'quality check'.  In the majority of cases with this type of scheme, your products will never pass quality control and you will never be paid.  In some circumstances, the organiser may ask you to part with more cash to buy more kits, but the outcome will remain the same.  You will be left with useless, expensive products that you have paid for and spent time assembling, which have been rejected. 

Homeworking Checklist
Not all homeworking opportunities are scams. The following tips may help you to determine whether or not a homeworking opportunity is genuine:

  • stop, think and be sceptical. If it sounds too good to be true it usually is
  • be cautious if the details of the homeworking scheme are vague
  • be sceptical about advertisements which promise high earnings for what appears to be very basic work
  • do not pay money up front to 'register' or buy a starter pack.  Genuine employers offering genuine employment will not expect you to make an up front payment of this type
  • genuine employers will give you their full contact details allowing you to research the company before you go ahead
  • if the advertisement you have come across resembles the typical advertisement in this leaflet then avoid it
  • avoid any scheme where you have to recruit others to send you an SAE or pay an up front fee
  • if you are considering self employment as a direct seller, selling goods via a catalogue left at a consumer's home or through a home demonstration of a product, check that the supplier is a member of the Direct Selling Association, tel. 01604 625700 or email dsaoffice@dsa.org.uk.

Homeworking scam - who do I report it to?
The Consumer Protection from Unfair Trading Regulations 2008 prohibits unfair trading practices by businesses, in particular those which deliberately mislead consumers or those trading practices which are considered aggressive.  If you believe that you have been misled, report it to the Citizens Advice consumer service for investigation by trading standards.

The Consumer Protection from Unfair Trading Regulations 2008 also includes a list of specific trading practices which are banned, one of which is pyramid selling.  A scheme which relies on an individual obtaining fees from recruiting other individuals to the scheme, rather than from the sale of goods or services, would breach the regulations.  If you come across a scheme of this type, report it to Citizens Advice consumer service for investigation by trading standards.

If you have been the victim of fraud via a homeworking scheme you can report it to Action Fraud.

You should also remember that if you paid for a service that you did not receive or it was mis-sold to you then you will have rights against the provider of the service. Contact Citizens Advice consumer service  for advice on this.

If you see advertisements for homeworking schemes that you think are misleading, you can refer them to the Advertising Standards Authority, Mid City Place, 71 High Holborn, London, WC1V 6QT, Tel: 0207 492 2222 or you can report them to Citizens Advice consumer service for referral to trading standards.

Please note
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted. For further information, please contact the Citizens Advice consumer service.

The Citizens Advice consumer service provides free, confidential and impartial advice on consumer issues. Visit www.adviceguide.org.uk or call the Citizens Advice consumer helpline on 08454 04 05 06.

Relevant legislation
Consumer Protection from Unfair Trading Regulations 2008

Last reviewed/updated: July 2013

 

 

 

Gloucestershire Trading Standards, Hillfield House, Denmark Road, Gloucester GL1 3LD

 

For Businesses . For Consumers . News . About Us . Contacting Us . A - Z Guide . GCC 

 

This page was last edited on 14/01/13