Telling stuffing scamsters to stuff it

U.S. and state officials are cracking down on work-at-home schemes

December 26, 2003|By T. Shawn Taylor | T. Shawn Taylor,CHICAGO TRIBUNE

CHICAGO - Unemployed for much of this year, Nelletta Dowdy thought a newspaper ad promising jobs paying $550 to $3,000 a week for stuffing envelopes at home sounded good.

Over three months, the 45-year-old Chicagoan spent nearly $400 for materials and postage. She sent the envelopes out, but the paychecks never came in.

"I feel so bad that I even went for this," she said. "If it's too good to be true, it can't be."

Alarmed by such complaints from thousands of consumers, federal and state officials have announced what they call the largest-ever crackdown on work-at-home envelope-stuffing schemes.

The Federal Trade Commission, the U.S. Postal Service and the Illinois attorney general's office together filed complaints against 31 operators nationwide as part of "Operation Pushing the Envelope." All are accused of using deceptive pitches and making false earnings claims.

All also sought money up front - ranging between $40 and $150 - and promised to reimburse consumers for postage, officials said. The operators guaranteed that consumers could earn from $300 to $5,000 a week, depending on how many envelopes they mailed out and how fast they did it.

Such schemes have nearly tripled in the past two years and typically increase during periods of high unemployment and around the holidays - when money can be tight, officials said.

"Particularly with the slow economy, people are looking for any opportunity and certainly this doesn't sound like a bad deal," said Illinois Attorney General Lisa Madigan. "The problem with these in general is they tend to be pyramid schemes. [Consumers] are being asked to sell more advertising to get more people hooked in."

The initiative also alerted consumers about how to avoid being taken by a work-at-home scam. Among the questions consumers should ask: Who will pay me, and when will my first paycheck arrive?

Observers also say any employment offers that require money up front should raise a red flag.

"No legitimate business will hire someone sight unseen and pay them thousands of dollars," said Ron Berry, senior vice president of the Council of Better Business Bureaus in Washington.

Victims tend to be people who are unable to work outside the home, such as senior citizens, the disabled, teen-agers, stay-at-home parents and low-skilled workers, Berry added.

The national enforcement effort targeted envelope-stuffing businesses that have drawn thousands of inquiries from wary consumers and hundreds of complaints from people who never got paid.

The FTC filed one of two complaints against Illinois-based Financial Resources Unlimited Inc., also known as Supreme Mailing Services, and Mark Shelton, an officer.

Madigan's office filed complaints against KNB Marketing and a Texas-based firm using an Illinois mailing address.

The U.S. Postal Service filed five criminal and 22 civil cases.

The Chicago Area Better Business Bureau has received a record number of complaints against Financial Resources Unlimited, said Steve Bernas, director of operations for the bureau.

Since mid-2002, the office has received 71,334 inquiries about the firm and nearly 400 complaints, he said, adding that the bureau has secured refunds for a little more than two-thirds of the victims.

The Chicago Tribune is a Tribune Publishing newspaper.

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