We all want to make extra money, but you work too hard for the money you do have to lose it.
The promise of extra cash or making money fast can lead some people to make financial mistakes. There are a lot of legit work from home jobs, and there are a lot of thieves out there trying to rip you off. How can you tell the difference and protect yourself?
How my cat made $2,500/month
Check out this work from home opportunity with the promise to make money fast:
Hello Riker Turner, congratulations, your application was reviewed and approved! I have signed and attached your employment confirmation. It outlines your responsibilities during the 30-day trial period. At the end of this trial (could be shorter if we have more work), you will receive $2,500.
The only problem? This guy here was the one that applied for the job:
Ok, my cat didn’t exactly apply. But Scott used his name and uploaded his picture for the profile. Maybe they thought he was handsome and could type.
One of the listener’s to Scott’s show alerted him to this potential fraud. She received an unsolicited email to work from home and make $2,500 month as a virtual assistant. Scott smelled a scam and decided to apply for the job and see what happened. The email response above says it all.
Where to find out about online scams
If you have doubts about something the first places to look are the central reporting agencies.
The consumer section of the Federal Trade Commission has a huge list of online scams to avoid.
The Better Business Bureua is also a good place to check if something is an online scam or not.
Desperately wishing you were debt-free, had more money, and financial freedom? Put the Scott Alan Turner podcast in your podcast app and join Scott as he gives you motivation, entertainment, and money tips you won’t hear anywhere else. It’s the new voice of personal finance to get you right for that commute or gym trip.
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How to spot online scams
1. You’re asked for personal information
The following personal Information will not be requested by legitimate online businesses:
- Driver’s license
- Social security number
- Checking account
OK to give:
- Email address
- Paypal address
2. You’re asked to pay for something
If you’re signing up to do freelance work or contract work, legitimate work from home sites like Upwork and Freelancer do not charge money. They make their money when work is completed and take a cut.
However there are exceptions. If you want to be a pet-sitter on Care.com you can pay for premium features for your profile listing.
But for most of the ways to make money online we’ve reviewed that are legit, they don’t have any up front costs. Sometimes you’ll find training and coaching programs that cost money, but those products are separate from the jobs being offered.
3. You’re asked to fill out a W-4 or W-9
For U.S. citizens a W-4 is an IRS form for tax withholding. It requires your social security number. I’ve never seen a legit site ask for this.
As a contractor you might be asked to fill out a W-9 form, which requires a social security number of EIN. If anything, you’re treated as a 1099 contractor and you’ll get a 1099-MISC tax form at the end of the year stating your earnings if you made $600 or more.
You might be asked for your social security number after you’ve hit the $600 income limit (meaning you’ve been paid $600 or more). But if you’re making money and it’s in your bank account, it’s a good sign the business is legit.
4. Other things to watch out for
- one-time membership fees – upfront fees are usually a red flag
- outrageous pay – no, you can’t make $1,000 in a weekend
- products to buy – anything where you order discounted products delivered to your house that you can then resell.
- assembling products – once again this scam requires you to buy materials upfront
- wiring money – nope, don’t do it.
- starter kits – falls under the category of multi-level marketing (MLMs). If you’re selling a product it’s a sign of a legitimate company. If the focus is on recruiting new members it’s a pyramid scheme.
Finally, if it sounds too good to be true, it’s because it’s too good to be true. Run – don’t walk – away from people or websites that make outrageous claims.