Trading Standards Institute Advice

Homeworking schemes

In the guide

This guidance is for England, Scotland & Wales

Have you seen an advertisement, received an email or been handed a leaflet or business card claiming that you can earn money from home or in your spare time? You need to establish if this is a legitimate business venture or, as is most likely, a homeworking scam. These scams rely on lots of people sending off money on the promise of high earnings in return, but in reality you are unlikely to receive any payment and may be recruited to become part of an illegal pyramid-selling scam.

These scams can involve bogus online surveys or assembling products at home where you often have to buy expensive kits as a start-up. When you send your finished products back ultimately they will fail the quality check, regardless of how well you have done the job.

There are steps you can take to try and ensure the company you are dealing with is legitimate.

Remember, if it sounds too good to be true, it usually is

Typical scam homeworking advertisement

You may have seen this type of advertisement before; perhaps in the jobs section of the local newspaper, on information boards in your local store, a small flyer delivered to your home, placed on the windscreen of your car, via social media, online, by email or text message.

HOMEWORKERS REQUIRED URGENTLY

EARN £500 NO QUALIFICATIONS OR PREVIOUS EXPERIENCE NECESSARY

THERE ARE LOADS OF COMPANIES AND CONTACTS OUT THERE AND WE NEED YOUR HELP!

TO START EARNING CASH SEND AN EMAIL TO SOMEONE@ANYTOWN.CO.UK, PHONE ANYTOWN 000666, CLICK ON THE LINK OR MESSAGE FOR DETAILS.

In times of financial hardship, people are drawn to advertisements of this type, which promise an easy way to make a lot of money at home. The advertisements may be worded differently to the example, but the common thread is that they promise high earnings for relatively little work, an up-front fee is usually payable and the details of the actual work to be done is vague.

Bogus online surveys

There are genuine survey sites that allow you to take part in online surveys for cash. However, there are scams associated with paid online surveys that you should be aware of. There are fraudsters that will claim they can sell you lists of online survey companies that will help you earn thousands of pounds to work from home. You will be charged a fee to access lists of companies when in fact they are easily searchable online. The claims of high earnings are misleading.

Envelope stuffing scheme

The advertisement will give you sufficient information to capture your interest but you will not find out how the scheme works until you have made contact with the organiser and paid the required fee.

The advertisement will prompt you to ring a contact number and then you will be required to send a stamped addressed envelope (SAE) to the organiser for more details. Documents will be sent to you, using your SAE, that promise the opportunity to earn a significant amount of money. The documents are likely to state that you will receive a batch of envelopes, already addressed and stamped, and you won't be required to ring anyone or chase anybody up. The wording of the documents is designed to lure you into sending an administration or registration fee so that you can obtain further information on how the scheme works.

The wording of some schemes is very clever; read it carefully and look for the catch.

You send off your fee and then receive the full details of the scheme. At this point you will discover that you are expected to become a recruiter for the scheme, rather than carrying out work. You are required to place your own advertisements in local shops, papers, etc asking people to send you their SAEs, in the same way you did when you first saw the advertisement.

You wait for people to read your advertisement and send you their SAEs. When you have collected the minimum number, you parcel them up and send them off to the organiser for your promised commission, which you are unlikely to receive.

When the organiser receives your bundle of SAEs, it uses them to write to those people, inviting them to become recruiters and send their registration fees and so the cycle begins again.

This type of envelope scheme is just one of many, although it is probably the most common type. Other schemes involve:

  • filling the SAEs you receive with 'circulars' or other advertising material
  • offering to supply you with a book or list of 'homeworking opportunities'. This is likely to just be a list of lots of other similar envelope schemes. You pay for the starter pack and any work you do addressing envelopes is continuously returned to you as not of the required quality and therefore you don't get paid

Assembling products at home schemes

Other homeworking schemes require you to buy kits for assembling products at home. The assembled goods are then returned to the organiser for payment. The products can include lampshades and Christmas decorations.

So how do these schemes work? You respond to advertisements and receive the initial information. You may be required to pay a registration fee and will also have to buy the un-assembled products in kit form.

Once the kit is received, you will be expected to assemble the products and return them to the organiser. The documents will state that for every correctly assembled product, you will be paid a fee. However, the organiser has complete control over whether the product passes their 'quality check'. Your products will never pass quality control and you will never be paid. In some circumstances, the organiser may ask you to part with more cash to buy more kits, but the outcome will remain the same. You will be left with useless, expensive products that you have paid for and spent time assembling, which have been rejected.

Homeworking checklist

Not all homeworking opportunities are scams. The following tips may help you to determine whether or not a homeworking opportunity is genuine:

  • stop, think and be sceptical. If it sounds too good to be true, it usually is
  • be cautious if the details of the homeworking scheme are vague
  • be sceptical about advertisements that promise high earnings for what appears to be very basic work
  • do not pay money up front to 'register' or buy a starter pack. Genuine employers offering genuine employment will not expect you to make an upfront payment of this type
  • genuine employers will give you their full contact details allowing you to research the company before you go ahead
  • if the advertisement you have come across resembles the typical advertisement in this guide then avoid it
  • avoid any scheme where you have to recruit others or pay an upfront fee
  • do not 'buy' customer leads. You could be duped into unwittingly contacting other people with false offers of work
  • avoid organisers that use only mobile numbers  or email addresses such as '@hotmail'. This could be an indication that they are not a reputable trader. Look for a landline that can be traced and searched on the internet
  • if you are considering self-employment as a direct seller, selling goods via a catalogue left at a consumer's home or through a home demonstration of a product, check that the supplier is a member of the Direct Selling Association (opens in a new window). Use the online contact form or email dsaoffice@dsa.org.uk
  • you also need to be mindful of 'no cold calling zones' and 'do not call' stickers. For more information on these contact the Citizens Advice consumer service 

Homeworking scam - what are my rights and who do I report it to?

The Consumer Protection from Unfair Trading Regulations 2008 prohibit commercial practices that are unfair to consumers. If a trader misleads you or engages in an aggressive commercial practice and you make a decision to purchase goods, services or digital content that you would not otherwise have done, the trader may be in breach of the Regulations. If you have been misled or the trader has behaved aggressively, report your complaint to the Citizens Advice consumer service.

The Consumer Protection from Unfair Trading Regulations 2008 also include a list of specific trading practices that are banned, one of which is pyramid selling. A pyramid-selling scheme, which relies on individuals obtaining fees from recruiting other individuals to the scheme rather than from the sale of goods,services or digital content, would breach the Regulations. If you come across a scheme of this type, report it to the Citizens Advice consumer service.

If you enter a contract because a trader misled you or because the trader used an aggressive commercial practice, the Consumer Protection from Unfair Trading Regulations 2008 give you rights to redress: the right to unwind the contract, the right to a discount and the right to damages. See the 'Misleading & aggressive practices - your right to redress' guide for more information.

If you have been the victim of fraud via a homeworking scheme you can report it to Action Fraud (opens in a new window) or for advice call the Citizens Advice consumer service.

The Consumer Rights Act 2015 sets out what you are entitled to expect from a service, such as a homeworking scheme, provided by a trader. These are commonly referred to as your 'statutory rights'. This law also gives you remedies against a trader if the service fails to meet your expectations.

Services - key rights:

  • the service must be carried out with reasonable care and skill
  • information about the trader or service is legally binding
  • you are only required to pay a reasonable price for the service unless the price of the service is fixed as part of the contract
  • The service must be carried out within a reasonable time

Services - key remedies:

  • right to repeat performance
  • right to a price reduction

The 'Supply of services - your consumer rights' guide gives more information on your rights and which remedy you are entitled to. If you have a complaint about a homeworking scheme contact the Citizens Advice consumer service.

If you see advertisements for homeworking schemes that you think are misleading, you can refer them to the Advertising Standards Authority (opens in a new window), Mid City Place, 71 High Holborn, London, WC1V 6QT, Tel: 020 7492 2222 or you can report them to the Citizens Advice consumer service.

Key legislation

Last reviewed / updated: October 2016

Please note

This information is intended for guidance; only the courts can give an authoritative interpretation of the law.

The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on amendments to UK legislation can be found on each link's 'More Resources' tab; amendments to EU legislation are usually incorporated into the text.

For further information please contact the Citizens Advice consumer service, which provides free, confidential and impartial advice on consumer issues. Visit the Citizens Advice website (opens in a new window) or call the Citizens Advice consumer helpline on 03454 040506.

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