ASSEMBLY WORK AT-HOME: Typical Ad -- "Assembly work at home! Easy money assembling craft items. No experience necessary."

This scheme requires you to invest hundreds of dollars in instructions and materials and many hours of your time to produce items such as baby booties, toy clowns, and plastic signs for a company that has promised to buy them. Once you have purchased the supplies and have done the work, the company often decides not to pay you because your work does not meet certain "standards." You are then left with merchandise that is difficult or impossible to sell.

CHAIN LETTER: Typical Ad -- "Make copies of this letter and send them to people whose names we will provide. All you have to do is send us ten dollars for our mailing list and labels. Look at the chart below and see how you will automatically receive thousands in cash return!!!"

The only people who benefit from chain letters are the mysterious few at the top of the chain who constantly change names, addresses, and post office boxes. They may attempt to intimidate you by threatening bad luck, or try to impress you by describing themselves as successful professionals who know all about non-existent sections of alleged legal codes.

ENVELOPE STUFFING: Typical Ad -- "$350 Weekly Guaran- teed! Work two hours daily at home stuffing envelopes."

When answering such ads, you may not receive the expected envelopes for stuffing, but instead get promotional material asking for cash just for details on money-making plans. The details usually turn out to be instructions on how to go into the business of placing the same kind of ad the advertiser ran in the first place. Pursuing the envelope ad plan may require spending several hundred dollars more for advertising, postage, envelopes, and printing. This system feeds on continuous recruitment of people to offer the same plan. There are several variations on this type of scheme, all of which require the customer to spend money on advertising and materials. According to the U.S. Postal Inspection Service, "In practically all businesses, envelope stuffing has become a highly mechanized operation using sophisticated mass mailing techniques and equipment which eliminates any profit potential for an individual doing this type of work-at-home. The Inspection Service knows of no work-at-home promotion that ever produces income as alleged."

MULTI-LEVEL MARKETING: Typical Ad -- "Our products make it possible for people like you to earn more than they ever have in their lives! Soon you can let others earn money for you while you and your family relax and enjoy your affluent lifestyle! No experience necessary."

Multi-level marketing, a direct sales system, is a well-established, legitimate form of business. Many people have successfully sold the products of reputable companies to their neighbors and co-workers. These people are independent distributors who sell popular products and also recruit other distributors to join them. On the other hand, illegitimate pyramid schemes can resemble these legitimate direct sales systems. An obvious difference is that the emphasis is on recruiting others to join the program, not on selling the product. For a time, new recruits who make the investment to buy product samples keep money coming into the system, but very few products are sold. Sooner or later the people on the bottom are stuck with a saturated market, and they cannot make money by selling products or recruiting. When the whole system collapses, only a few people at the top have made money—and those at the bottom have lost their investment.

ONLINE BUSINESS: Typical Ad -- "Turn your Home Computer into a Cash Machine! Get computer diskette FREE! Huge Selection of Jobs! No experience needed! Start earning money in days! Many companies want to expand, but don’t want to pay for office space. You save them money by working in the comfort of your home."

This is typical of advertisements showing up uninvited in your e-mail—an old scheme advertised in a new way. You pay for a useless guide to work-at-home jobs—a mixture of computer-related work such as word processing or data entry and the same old envelope-stuffing and home crafts scams. The computer disk is as worthless as the guidebook. It may only list free government web sites and/or business opportunities which require more money.

PROCESSING MEDICAL INSURANCE CLAIMS: Typical Ad -- "You can earn from $800 to $1000 weekly processing insurance claims on your home computer for health care professionals such as doctors, dentists chiropractors, and podiatrists. Over 80% of providers need your services. Learn how in one day!"

Generally, the promoter of this scheme attracts you by advertising on cable television and, perhaps, by inviting you to a business opportunity trade show at a hotel or convention center. You may be:

• Urged to buy software programs and even computers at exorbitant prices; a program selling at a software store for $69 might cost you several thousands of dollars.
• Told that your work will be coordinated with insurance companies by a central computer.
• Required to pay for expensive training sessions available at a "current special rate" that will be higher in the future, and
• Pressured to make a decision immediately.

Most likely, the expensive training sessions are superficial, and the market for your services is very small or nonexistent. The promoter may delay the processing of your job, citing a backlog or mistakes in your work. There may also be no central computer as advertised. You may be left with no way to deliver what you have promised to your clients or customers—if you found any—and with no way to earn any money on you own.