According to the U.S. Bureau of Labor Statistics, about 16% of the total American workforce works at home at least part-time—and a separate analysis from FlexJobs and Global Workplace Analytics found that telecommuting increased 159% between 2005 and 2017.
Remote work comes with a lot of benefits, including more flexibility to care for family members, less time spent commuting, lower stress levels and more.
But working from home isn’t always as rosy as it seems. There are scammers who prey on remote job seekers to waste your time, take your money and potentially steal personal information. Here’s what to look out for.
What are work-from-home scams?
Work-from-home scams are opportunities that look like real remote jobs—often with the promise of significant income—but are really just ways for criminals to exploit your efforts and steal from you.
“Scammers are after your sensitive personal information, your money, and your time and effort,” said Brie Reynolds, career development manager at remote job search site FlexJobs. “Some scams leave you without a paycheck, while others can actually involve you in a crime like money laundering or moving stolen merchandise across state lines.”
Falling victim to a work-from-home scam could cost you money (either in cash or time you could have spent doing legitimate paid work), but perhaps even more sinister is the risk to your email address, Social Security number and other personal information. Once a scammer has this, they can use it to steal your identity or sell it to the highest bidder.
A 2019 FlexJobs survey found that nearly 20% of job seekers were victims of work-from-home scams—and with more workers looking for remote opportunities and criminals finding more sophisticated ways to trick them, it’s important to know the warning signs and stay skeptical of jobs that sound too good to be true.
Common work-from-home scams
With so many work-from-home opportunities available, it’s hard to categorize every possible scam. But if you come across a job in any of the following areas, proceed with caution. Here are some common scams, according to the FTC:
- Multilevel marketing: With an MLM, you make money by selling products, usually directly to consumers, and recruiting additional people to sell alongside you. You may be able to earn an income this way, but any scheme that relies solely on recruitment is known as a pyramid scheme, and it’s illegal.
- Internet business coaching: Earning thousands of dollars per month on your own internet business may sound promising, but this scam makes you pay for “expert” coaching and more with a very small likelihood of business success.
- Internet surveys and searches: This scheme promises money in exchange for filling out online surveys or doing searches. You have to pay a small fee to get started, which means the scammer has your credit card info. There may be legitimate survey opportunities out there, but you should never have to pay money upfront.
- Envelope stuffing or packing: These ads promise lots of easy work stuffing envelopes in exchange for a small startup fee. But there’s no real opportunity—and the only way you get paid is if you can get someone else to fall for the same trick.
- Craft assembly: This scam requires you to buy equipment (like a sewing machine) and materials to put together products. But after you spend time and money making crafts, you’re told your work doesn’t meet the company’s standard, which means you don’t get paid.
- Mystery shopping: Some mystery shopping jobs (which have you dine at a restaurant or shop at a retailer to report on the experience) are legit, but others ask you for cash upfront for certifications or guarantees. Others will have you deposit fake checks. If you have to pay for the job, it’s not real.
- Medical billing: This scam promises big bucks for processing medical bills electronically—but first, you have to pay for the software and a list of doctors. Once you’ve handed over an initial investment, you’ll likely find that the client list is fake or the software is outdated (or both).
- Rebate processing: This scheme is similar to medical billing—you pay for certifications and training with the promise of an income for processing rebate requests. Once you’ve bought in, you find that there’s no work.
- Paid job listings: There are plenty of legitimate job sites out there, many of which you can peruse for free. However, there are scammers who will promise you a list of job opportunities (for a fee) and a refund if you don’t find employment—but that list or refund may never materialize.
- Data entry: Like other low-skill opportunities on this list, you may find promises of a huge income in exchange for basic data entry or administrative tasks. If the pay rate seems out of line with the job responsibilities, it’s probably a scam.
- Purchasing and personal assistant work: There are legitimate virtual assistant opportunities out there, but if your main task is purchasing products or gifts for your prospective employer, it may be a scam. With this scheme, you pay out of pocket for and mail items you’re asked to buy but never get reimbursed.
Of course, the above job categories—and many others—could have a mix of fake opportunities and legitimate positions. That’s why it’s key to know the red flags of a work-from-home scam.
Red flags for work-from-home scams
If you see any of these signs in a job posting or through the application or interview process, think twice about proceeding.
- Required upfront purchases: You should never have to buy a starter kit or pay for resources with your own money to start a job.
- Get-rich-quick promises: If a prospective employer makes bold claims about your earning potential, they’re probably not true.
- Suspiciously high rates for simple tasks: If pay is way out of line for what you’d get at a similar in-person job ($50 an hour for data entry, for example), it’s probably a scam.
- Extensive test assignments or jobs: Some legitimate jobs do require you to complete a project as part of the interview process, but if a prospective employer is asking for multiple assignments with no promise of pay, they’re exploiting your skills for free.
- Vague or poorly written job description: Like phony websites, scam job postings are often full of grammatical errors or odd language. If a listing doesn’t say much about the skills required for the job, that’s another red flag.
- Communication from generic email accounts: Most legitimate employers will communicate using an official email address ([email@example.com](), for example). If they use a generic email account, an account that mimics a real company (firstname.lastname@example.org) or refuse to talk over the phone, it may be a scam.
- Lack of an official website: Always look up a company’s website before proceeding with a job opportunity. A company making big employment promises without a real website is likely a fake.
- A sense of urgency: If you feel pressured to commit to a job or pay for a product, don’t fall for it. This is how scammers con you into giving up your money or personal information.
- Requests for personal information early on: You shouldn’t need to provide your Social Security number, date of birth or other sensitive information as a first step to applying or interviewing for a job.
- Responsibilities require your personal funds: If the job demands that you wire money, buy gift cards or products, or otherwise make use of your personal bank account, do not proceed.
Trust your gut when reviewing work-from-home opportunities. If a job seems too good to be true, more than likely it is.
One of the most important steps to avoiding a work-from-home scam is to do thorough research using respected resources. Look for job listings on sites like LinkedIn, Indeed, FlexJobs or Remote.io rather than Craigslist or local classifieds, and cross-check the posting on the company’s official website.
This doesn’t 100% guarantee the job will turn out as you expect, but it will help you weed out the obvious scams.
Next, avoid using “work from home” and “work at home” when job searching, suggests Reynolds. Instead, type in “remote job,” “virtual job” or “telecommute job”—these are more likely to be used by legitimate companies seeking remote employees.
Once you’ve made contact with a recruiter or prospective employer, research that individual to make sure they are who they say they are. Look for their professional profile on LinkedIn or company website, or use reverse phone and email search services to try and potentially weed out bogus communications.
If you do fall victim to a work-from-home scam, report it to your financial institutions (if your bank account or credit card numbers were compromised), and file a complaint with the FTC. You can also file a police report and notify your state’s attorney general’s office. Like with most scams, this may not undo the damage caused, but it will help protect you and others from future issues.