Work at Home, Business Opportunities and Multilevel Marketing Plans

Work at Home:

The Office of Consumer Protection frequently gets calls about whether a particular Work at Home opportunity is "legitimate". While we cannot tell you whether a particular offer is right for you, we can tell you that in Maryland it is illegal to require a consumer to advance any money in order to earn money at home.  The law states:
A person who places any advertisement that represents that any person can earn money at home by stuffing or addressing envelopes, mailing circulars, clipping newspaper or magazine articles, or performing similar work:

1. Shall pay compensation to others for performing the represented tasks; and
2. May not require the person who will perform the represented tasks to advance any monetary payment or deposit to the person who placed the advertisement on any instructional booklets, brochures, kits, programs or similar information materials, mailing lists, directories, memberships in cooperative associations, or other items or services. (Annotated Code of Maryland, Commercial Law Article, §13-314)

For more information see Work-at-Home Schemes by the Federal Trade Commission (FTC) or With Work-at-Home Scams, You're the One Who Pays by the Maryland Attorney General's Office.

Business Opportunities:

The Securities Division of the Maryland Attorney General's Office regulates the sale of certain "business opportunities" in Maryland state. According to the Securities Division publication "What We Do", business opportunities are "prepackaged small business deals offered mainly to novice entrepreneurs through classified ads, home seminars and business opportunity expos. Typical business opportunity deals involve the sale of vending machines, pay telephones, amusement devices, greeting card display racks and 900 telephone lines."

Contact the Office of the Attorney General, Securities Division at (410) 576-7042 or see the FTC guide Answering the Knock of a Business 'Opp' for additional information.

Multilevel Marketing Plan or Pyramid Scheme?:

In Multilevel Marketing (MLM) representatives sell products or services and can earn commissions based on the sales they make and also from the sales made by other people they have recruited into the program. However in a pyramid scheme, which is illegal, representatives spend most of their time recruiting and commissions are based on the number of distributors they have recruited. See Multi-level Marketing or Pyramid Scheme? from the Maryland Attorney General's Office or The Bottom Line About Multilevel Marketing Plans from the FTC for further details.