Issue Date:  -  Wednesday, 13 September 2000

Beware of 'make-money-at-home' promotion

The Ministry of Fair Trading has issued a general warning to consumers to be cautious in responding to advertisements promoting "make-money-at-home" schemes.

Commissioner for Fair Trading Patrick Walker said that in many cases, the schemes involve set-up costs that people would not expect or be aware of.

"Although the up-front costs are small, there are usually additional costs for purchasing raw materials and samples which can make what appears to be a lucrative venture at first glance, actually quite expensive to get into," Mr Walker said.

Typical costs are material purchases, postage and handling, and insurance, and if raw materials come from overseas this adds considerably to total expenses.

"Conversion rates, postage, insurance and the logistics of delivery could have a big impact on potential profits, said Mr Walker.

"If you are interested in any type of making-money-at-home scheme then before you make a decision you should ask the promoters for details of successful business operators to see if they are happy with the arrangements," he said.

What was most important was that consumers had an opportunity to make an informed decision about whether to participate or not.

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Stephanie Slanzi
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