Work at home business opportunities facing stronger regulation

Envelope stuffing

Work at home business opportunities, like envelope stuffing, may soon face more regulation. Image: Flickr / slackorama / CC-BY

Work at home business opportunities can mean big money — but they can also be big scams. The Federal Trade Commission has released a 129-page report about these business opportunities. While not yet implemented, the FTC has recommended multiple changes to the rules governing work-at-home business opportunities.

Rules governing work at home business opportunities

Currently, work at home business opportunities are governed by an interim rule passed in 2007. These business opportunities are usually things such as product assembly or envelope stuffing. Current rules do not require sellers to provide references or substantiate claims of earnings. Statements such as “make up to $10,000 a month” without proof are currently allowed under FTC rules. Before the March 2007 interim rules passed, work at home business opportunities were governed in the same way as franchise agreements.

What the FTC recommends for work at home business opportunities

The new rules suggested by the FTC include several large changes. First, prior legal actions involving the person selling the business opportunity or affiliates have to be disclosed for 10 years. Second, “written substantiation and a reasonable basis” to back up claims of earnings must be provided. Lastly, references and contact information of people who have taken advantage of the work at home business opportunity in the past three years must be provided on request.

Keeping work at home business opportunities safe

The biggest problem in the work at home business opportunity market is, put simply, fraud. Pyramid and Ponzi schemes are pervasive. If you are looking for a good work at home business opportunity, make it a point to look for the kinds of things the FTC is suggesting. Find a company that is willing to provide contact information for people who have worked for it and a reasonable promise of return. Remember that there is no such thing as free money — every business opportunity requires hard work.

Sources

FTC Report (PDF)

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