Complaints about work-at-home scams up 275%by Ryn Gargulinski on May. 06, 2009, under Local
Citizen Staff Writer
In an economy where everything seems to be going downhill, one statistic has soared: complaints against work-at-home scams.
The complaints have jumped 275 percent – from 226 to 848 – from the first quarter of 2008, according to Arizona Attorney General Terry Goddard.
They have also moved from the No. 3 to the No. 1 position on the Attorney General’s Office’s top 10 list of complaints.
“Scam artists can make risky business opportunities seem like an attractive option for hardworking consumers,” Goddard said.
“During hard economic times, more consumers are worried about making financial ends meet and more scams prey on that need.”
The complaints have soared as the state jobless rate rose to 7.8 percent from 6.9 percent in December 2007.
Work-at-home schemes generally fall into two categories. Work-at-home opportunities offer people the chance to set up their own business at home while work-at-home companies hire people to work from home for the benefit of a parent company.
The majority of the complaints involve Internet-based opportunities, Goddard’s office reports.
Many of them also involve paying an initial fee of $500 to $1,000, according to a news release from Goddard’s office.
When the business isn’t panning out, the promoter then tries to wheedle even more money out of the consumer to pay for advertising and marketing.
After the promoter collects the cash, consumers often find the business either fails altogether or doesn’t make enough to offset what they have already paid to start it, the news release said.
The Better Business Bureau of Southern Arizona has been inundated with inquiries about work-at-home companies.
Over the past three years, these inquiries have tripled with the BBB, topping off at 3,275 in 2008. This was up from 791 in 2006 and 1,873 in 2007.