There are many legitimate home-based jobs posted on the Internet every day, but there are far more (our research indicates that the “scam ratio” is about 42-to-1) seeking to take advantage of unwary jobseekers -- and some can even land you in jail.

How do you tell the bad and the ugly from the good? Here are seven tips to help you sift through the many leads you’ll encounter for home-based jobs and projects. 

Seven Signs of Scams

* "Work at Home" appears in the ad header. In a legitimate lead, the title of the job -- “Accountant,” “Web Designer,” “Medical Transcriptionist” -- is what you usually see first, and "work from home" is not a title. If it appears in the ad header there's a good chance it's a come-on. (Scammers place it there because they know that “work at home” is the phrase that so many people are eager to see.)

* No job description. What exactly is the job? Many scams won’t tell you -- or will only allude to -- what you’ll be doing. (Why? So you’ll get in touch to learn more, so they can reel you in.) Real hirers will always at least summarize what it is you’ll be expected to do.

* You have to pay for more information about the job. Legitimate employers don’t ask candidates to pay money to learn more about a job. 

* No experience is necessary, or no resume or other proof of qualifications is requested. In the “real” world, the vast majority of jobs (apart from internships or entry-level work) require some degree of experience, and proof of qualifications. Beware leads that say experience isn’t necessary, or that don’t ask you to provide your credentials.

* Unbelievable pay! "Make $5,000 a week working part time!" Outlandish claims of income (often accompanied by an exclamation mark) almost always signal a scam.

* The ad arrives as spam in your email. As if by a miracle, an ad for home-based work, addressed to you, comes in your email. How did that nice person you’ve never met know you were looking for home-based work? More likely, it came from a scammer who has “harvested” your email address from a website, or purchased a list of email addresses from a business or from another scammer. (And beware of how you handle the email. Move it to your trash file without using the “remove me from this list” link that you may see at the bottom of the page. These links are often used to confirm that your email address is active, and clicking on them can result in even more spam.)

* Palm trees, mansions, beaches and bikinis appear in the ad. If the ad features palm trees, a mansion, and a Ferrari, it’s probably a scam. (Award “scam bonus points” for shapely women in bikinis.) Legitimate hirers rarely if ever use such props to enhance their ads.

“Oldies but Baddies” -- Classic Scams that Still Snare the Unsuspecting

A discussion of scams wouldn’t be complete without the classics, which became classics because they still work. Don’t let them work on you. 

Stuffing Envelopes

The bottom line is this: there are machines that stuff envelopes, and no legitimate company is going to pay a human being to do something a machine can do in a fraction of the time, at less cost. But for reference, what usually happens in this scheme is that the jobhunter sees the ad, sends in money to get started, and receives a letter instructing them to do the same thing they just fell for -- place the same ad they replied to in a newspaper or other publication, or send it to friends and family, to scam others in turn.

Typing and Data Entry

While legitimate data entry leads can sometimes be found online (most data entry work is outsourced to India and other lower-cost countries), you'll have to wade through cyber-acres of scams to get to them.

Data entry scams often claim you'll earn a certain amount for every "application" that you process. As with the envelope stuffing scam, you pay a fee and in return are instructed to run the same ad that you responded to, and to collect checks from those who reply. The "applications" that you “process,” in other words, are from people like you, except now the role of scammer is yours.

Another common data entry scam involves having the applicant pay a fee for software that he or she will "need" in order to complete the data entry jobs. Once you purchase the software, however, it becomes clear that you yourself will be responsible for finding the data entry work -- it won’t come from the seller.

Craft Assembly

"Send money for a start-up kit with all the materials you'll need, and earn money for every item you complete to our satisfaction." That’s the typical pitch.

Sounds great, but with few exceptions, the victim orders the kit, does the work as instructed, and the product is rejected -- time after time. In fact, nothing the victim does to “improve” the product will make a difference, because the scammer doesn’t want the finished item, he or she wants the money for the kits... period.

Postal Forwarding

Postal forwarding has become a significant problem, and we’ve met several people who have not only lost their savings, but had brushes with the law after falling for this scam. In some cases, the scam involves the transportation of stolen goods, while others involve cashing checks and forwarding money in exchange for a commission.

We met a man who had been victimized by a “postal forwarding” scam. He had been looking for home-based work because he had a disability that made a "brick and mortar” job difficult. He’d seen an ad for a job that required him to receive packages of electronics (MP3 players, video recorders, DVD players, etc.), repackage them, and ship them to an address in a former Soviet republic. In exchange, the "hiring company" would reimburse him for shipping expenses, and pay him a fee for his services. The job sounded perfect, and since there was no up-front fee, he thought it was legitimate.

Once on board, he received packages in a rush. He repacked the merchandise according to the instructions he'd received, which included stated monetary values for the customs forms, and forwarded the packages to the overseas address, with an invoice for his expenses.

Soon afterward he received a check drawn on a non-US bank, and deposited it in his bank account.

Several weeks later, his bank notified him that the check was drawn on a non-existent account, and was worthless. Further, when he reported the scammers to the authorities, he learned that he had unwittingly been a key cog in an illegal machine.

As it turned out, the scammers had purchased the electronics with a stolen credit card, and used him to "launder" the transaction. To add insult to injury, in following the instructions for shipping he had made fraudulent statements on the customs forms. (An attorney finally got him off the hook, but not without a great deal of expense -- to bank account and dignity.)

Check and Funds Processing

In this scam, the scammer typically claims to need someone to help him process funds, because he lives in a country “where the government makes it difficult or impossible” for him to do so himself. To launch the scheme, he sends you a bank draft or cashier’s check, you deposit it into your bank account, and you wire the scammer 80% or so of the amount you deposited -- keeping the rest as a commission.

The sting comes when your bank notifies you that the “cashier’s check” you deposited was bogus or stolen, and that you’re personally responsible for the money that was wired abroad (often to Nigeria or Senegal, but to other places as well). 

Staying Ahead of the Bad Guys

Here are a few resources that will help you avoid ripoffs and headaches...