Postal Bulletin 22144 - December 23, 2004 - USPS.com

6 POSTAL BULLETIN 22144 (12-23-04)
Common Work-at-Home Schemes
Con artists know working at home sounds attractive. That’s why they place such ads. Here are some of the more common
fraudulent work-at-home opportunities:
Envelope stuffing: In this scam, promoters offer a money-making opportunity stuffing envelopes at home — for a
“small fee.” But victims do not receive a job. Instead, the victims pay the promoter who then provides them with the
details of the scheme. The details are simple: contact other potential “employees” with an offer to make money stuffing
envelopes and then sell the new recruits the details of the scheme. Typically, there is nothing to stuff. The fraud depends
on the continuous recruitment of people to whom the sponsor can offer the same plan. The reality is that the
envelope stuffing process has become a highly automated and mechanized operation. Businesses use sophisticated
computer software and mail-processing equipment to generate addresses and insert letters into envelopes. This eliminates
any profit potential for an individual doing this type of work at home. Postal Inspectors know of no work-at-home
envelope stuffing promotion that ever produces income as promised.
Product assembly and craft work: These programs often require victims to buy supplies and instructions for assembling
simple toys or other products in their home. The victim spends many hours producing items such as baby booties,
plastic signs, or toy clowns for a company that has promised to buy the products. However, after the victim has purchased
the supplies and equipment and has performed the work, the promoter often decides not to pay because the
work does not meet certain “quality standards.” Unfortunately, with these promoters, no work ever meets their
“standards,” and the victim is left with merchandise that is difficult or impossible to sell. With no market for the product,
the victim wastes time and money.
Reshipping: These scams involve the receiving and reshipping of merchandise often ordered online to locations that
are usually overseas. The work-at-home shipper is told that he or she can make substantial amounts of money by
receiving, repackaging, and then mailing the merchandise to the foreign addresses. However, the shipper is unaware
the merchandise has been paid for with stolen or fraudulent credit cards. In effect, the shipper becomes part of a fencing
operation by receiving stolen goods and then mailing the goods to the promoter. The promoters, often based in a
foreign country, are outside the reach of U.S. law enforcement and are able to cover their tracks to evade capture. The
victim, however, is easily tracked and implicated in the crime.
This fraudulent work-at-home scam presents other drawbacks. Individuals attracted to work-at-home employment
through advertisements posted on popular Internet job Web sites often are required to provide personal information.
This means the prospective “employee” might be asked to submit Social Security Number, date of birth, and sensitive
bank account information. Once “employees” are hired, they immediately begin receiving packages for reshipping at
their residence. Unfortunately, the promoter now has personal information about the new “employee” which often is
later used in identity fraud.
Another drawback is the “pay.” Payment to employees usually arrives in the form of a third-party cashier’s check, rather
than a regular paycheck. The check often is larger than the payment due to the employees for their reshipping services.
The employee is instructed to cash the check and electronically forward the excess amount to an overseas bank
account. Ultimately, the bank will discover the cashier’s check is bogus, and the victim will be liable for repaying the full
amount of the check. At this point, “employees” realize they have not only fallen victim to a scam, but that the operators
of the scam now possess their personal information.
Multilevel Marketing: Multilevel marketing, a direct sales system, is a well-established, legitimate form of business
often promoted as a work-at-home opportunity. 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 of the pyramid scheme 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.