Work from home scams

[Cat]

I have just come across this from the DTI and I found it useful when 'recruiting' - I have been an Annique consultant from many years and often come across people that are scared of MLM (multi-level marketing). I have found recently that many people have been “burnt” by work at home opportunities – this article helps cover these issues and explain how your MLM business is not a ‘work from home’ scam - provided it is a company that is resgitered with the DSA.


Consumer Alert

Work from home opportunities

This communication alerts the media, business and the public about scams or unfair business practices, prohibited in terms of the Consumer Affairs (Unfair Business Practices), Act 71 of 1988. This Consumer Alert pertains to the prohibition of Work from Home Opportunities

What are work from home opportunities?

Work from Home Opportunities relate to the offer of opportunities to consumers such as typing, filling in and addressing envelopes, gathering of names and addresses and the compilation of data from a consumer's home in exchange for a monetary consideration.

How it is done?

Promoters of these scams target people seeking extra income. Instead of helping people make money, the scammers use various tricks to take the victims` money and leave them with nothing of value. Consumers are issued with information on how to make money instead of the actual employment.

An advertisement would request consumers to start a business from home, upon responding to an advertisement, consumers are directed by promoters to deposit a sum of money into the promoter's account, instead of being offered a job. Some schemes sell information of no value. Some pretend to provide skills, which turn out to be unmarketable, and other schemes rely on recruiting or luring others into joining for the work, which they supposedly offer.

It has been found that promoters of. "Work from Home Opportunities" do not truthfully identify themselves, their firms or their products in their advertisement.

Advertising of "Work from home opportunities"

Not every work from home opportunity is undesirable or an unfair business practice or against the public interest. In terms section 12 of the Consumer Affairs (Unfair Business Act) No 71 of 1988, the Minister declares as an unfair business practice and hence illegal, any advertisement in which work from home opportunities is offered in newspapers, magazines, other print and electronic media, and any other advertising method. Work from home opportunities include:

* Typing work,
* Addressing envelopes of any kind whatsoever and/or,
* Addressing (typing or writing) labels of any kind whatsoever and/or,
* Filling of envelopes of any kind whatsoever and/or,
* Administrative opportunities,
* Compiling data,
* Direct sellers of consumer goods who do not truthfully identify themselves, the firm and their products in any advertisements.

Work from home opportunities exclude:

* Typing work requested by the purchaser of such a service, such as the typing of assignments required by the learners and students.
* The direct selling of consumer goods in which a sales person either:
1. Demonstrates the product or represents a product catalogue in homes, the workplace or in similar places away from shops,
2. Collects an order,
3. Subsequently delivers the goods personally or arranges delivery,
4. Collects payment for goods or arranges for payment or credit transactions;
5. Applies person to person selling party plan selling multilevel marketing and network marketing.

Provided that direct sellers truthfully identify themselves the firm and their products in advertisements.

What to look for?

If the proposal

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6. Claims you can make large amounts of money quickly and with little effort
7. Ask you to work from home (often using your computer)
8. Requires payment for registration or for more informational material.
9. If the proposal offers you financial reward for recruiting people
10. Offers goods and services of little or doubtful value that only serve to promote the scheme
11. Has no goods or services for sale
12. Requires you to purchase large quantities of goods

How to protect yourself

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13. Check whether there are special legal requirements such as licenses or other constraints on working from home
14. Find out if there is a market for the work you plan to do
15. Ask for reference of other people who have been doing the work
16. Make your decision and seek professional advice first.

Penalties and Fines

Contravention of the Minister's order is a criminal offence, punishable by a fine not exceeding R200 000, or imprisonment for a period not exceeding five years, or both a fine and imprisonment.

Should you require any additional information or clarification you can contact the dti Customer Contact Centre at 0861 843 384 or write to:

the dti
Consumer and Corporate Regulation Division
Private Bag X84
Pretoria
0001

Other Services

The Education and Compliance directorate issues this information as part of an education service to consumers. The directorate also offers the following services

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17. Advisory opinions and clarifications
18. Presentations
19. Information materials

Issued by:
Education and Compliance directorate, Office of Consumer Protection