Scams are bane of work at home parent's existence. They abound on Internet and in world in general. Fortunately, there are some warning signs you should always look out for that will keep you from falling for most of them.
WAH Job Scams
Probably most common scam is to ask a potential "employee" to pay a fee for job. This may be disguised as an application fee, software fee, processing fee, maintenance fee, etc. If you are to be an employee, employer should be paying YOU, not other way around. They may try to justify it as a way to weed out applicants who are not serious about job, but don't believe it. You wouldn't pay to apply for a traditional, outside home job, so don't pay to apply for an at home job.
Some legitimate companies may offer equipment that you will need to rent. This can be legitimate, but in general, you should be able to buy such equipment on your own. Check into this option, as it can save you a lot of money.
Home Business Scams
Another popular work at home scam is to offer a kit to start a business, such as medical billing. This kit may contain outdated or irrelevant contact information and useless software. Medical billing is one of popular areas for this particular scam. It is very difficult to start a home based medical billing service without prior experience,
There are a lot of legitimate MLMs out there, but there are a tremendous number of scams too. If you decide to start your own business as a part of an MLM, you need to make sure they are legitimate. Familiar names such as Tupperware, Avon and Mary Kay are easily seen as legitimate, but what about more mysterious ones?
Some will refer you to a site that tells you all about their wonderful opportunity, but not give you any details about what you will be selling, or even claim you don't have to sell anything. Be wary in these cases. Rather than a legitimate MLM, you may have stumbled across a pyramid scheme. Pyramid schemes earn money primarily through recruiting, not through sales to customers. They may also require you to purchase a certain amount every month or not earn your commissions. This is known as inventory loading and is illegal. See this very useful article on FTC website for more information.
The FTC also offers some excellent advice on selecting a franchise or business opportunity, which applies to both online and offline opportunities.