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Why Work From Home Scams Persist

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Why Work From Home Scams Persist

Why Work From Home Scams Persist

Why Work From Home Scams Persist

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On the Internet your bound to see ads that read: earn thousands of dollars a week working from home. Click on one of them and you enter a world that has ensnared people in money-losing ventures.

DAVID GREENE, HOST:

Now to money and jobs. You've seen those ads. Make $2,000 a week working from home. They're on telephone poles and classifieds and on the Internet. They scream, just click here. But what happens after you click can be a long, disappointing and expensive ordeal. As Audrey Quinn of our Planet Money team reports, the industry behind these ads takes in tens of millions of dollars each year.

AUDREY QUINN, BYLINE: The first thing you have to know is these ads are not for actual work-at-home jobs. One or two clicks in, these companies tell you that the real easy way to get rich is by starting your own online business. You can stay in your pajamas, sell stuff on the Internet, make easy money. But the only way that will work is if you buy their system. Their sales pitch comes over the phone, and there is a science to how good they are at getting your money. The Federal Trade Commission, the FTC, they've been tracking these calls. They gave me one.

(SOUNDBITE OF TELEPHONE CALL)

BLAKE KANTOR: How are you this morning?

DORIS: Oh, I'm doing all right. I was just cleaning up my grandson's bedroom.

KANTOR: Oh, yeah?

DORIS: Yeah (laughter).

KANTOR: It never ends, right?

QUINN: Starts out innocent enough, but this is actually the first step in the pitch, build rapport. This call in particular came from a salesman named Blake Kantor at a company called the Tax Club. This woman's name has been beeped out. We're going to call her Doris. What we know is she's in her mid-70s and does not own a working computer. But after a few minutes on the phone with Blake, he has her thinking, sure, starting an online business could be easy. I'd be into that.

(SOUNDBITE OF TELEPHONE CALL)

KANTOR: How many hours a week do you think you're going to invest into this business?

DORIS: Five to eight hours a day.

KANTOR: Really? That's fantastic, OK, because investing as little as 10 hours a week, OK, can potentially generate a six-figure income.

QUINN: He's following a script. I got my hands on one. This here was step two, get the person dreaming, picturing what that money could mean for her. Doris, at this point, has no clear plan for a business, but Blake tells her, we'll sort that out later. He moves on right on to step three, figure out how much money she's got.

(SOUNDBITE OF TELEPHONE CALL)

KANTOR: Now I just want to get an idea of what type of assets you have that we will be protecting. Do you have savings?

DORIS: Yeah, a little bit.

KANTOR: Just a ballpark, if you had to say.

DORIS: I'd say right around $50,000.

KANTOR: Fifty, OK.

QUINN: She's got a bit of money, so he pushes harder. On to step four, plant some fear to convince her she'll never make it on her own. Without the Tax Club's business services, she could be sued, could be audited by the IRS, could even lose her home. Doris believes him. Blake goes in for the sale, tells her it's about five grand for a lifetime business membership. He just needs to put it on her card.

(SOUNDBITE OF TELEPHONE CALL)

KANTOR: All right, what are those numbers?

DORIS: OK, the number is [bleep].

KANTOR: Expiration?

DORIS: [Bleep].

KANTOR: OK, and the three-digit number CVV number on the back?

DORIS: [Bleep].

QUINN: Doris never got her business off the ground. But the Tax Club did follow up with her to sell her more and more home business products. They ended up getting $43,000 from her in total. And Doris wasn't the only person this happened to. Twenty thousand other people came forward when the FTC filed a suit against the Tax Club in 2014.

CHRISTINE DURST: You have to understand that part of their sales process, when you first get that phone call from them, they are digging into your head. And if you're not aware of what's happening, it's very subtle. It's almost subliminal.

QUINN: Christine Durst runs a website that sorts out legitimate work-from-home jobs. She says when you're someone who's never done so great financially, it can seem kind of like magic how other people make lots of money. And these scammers call you up saying, hey, there is a secret. Lucky you we're here to guide you.

DURST: They know where your wounds are when they start making those calls to you. If you just do these things, you're going to make your money back plus more, and you and your family are going to be so proud of you.

QUINN: And even though the FTC managed to shut the Tax Club down, there are so many other companies like them still operating. Lawyers for the FTC say going after these companies is like playing whack-a-mole. Once enough customers have raised enough complaints to get noticed, the company shuts down and starts again under a new name. Audrey Quinn, NPR News.

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