Step1
Check the Better Business Bureau.
The BBB helps consumers distinguish between businesses that have good practices versus those that do not. If the company that you are interested in contracting with does not have a BBB accreditation, it does not mean that they are not a good company to contract with. However, if the company has an unsatisfactory rating with the BBB and has numerous complaints about their business practices, then it may be a company that you want to avoid.
Step2
See if the company has a file on RipOffReport.com.
This site is dedicated to expose companies that have ripped off their employees or their consumers. Read what the file has to say about the company you are interested in before making an informed decision.
Step3
Avoid companies that ask for ANY money.
A legitimate company that wants you to work for them will not ask for a fee of any kind. Think about normal jobs, there are no fees to apply or become an employee for their company. Even if you are an independent contractor, you still do not have to pay any fees. NEVER pay to work.
Step4
Speak to a live person.
Do not sign up for anything where there is never a live person that you can talk to. An answering machine is not a live person and can just be a recorded message to make you think that this company is real. Usually in this situation you will never speak to a real person and continue to get the run around.
Step5
Check into their address.
This is a tricky one only because some legitimate companies do use PO boxes. But when you check the BBB, make sure that the company name was not listed with multiple addresses. Most likely this means that the company keeps changing their name and location which is a bad sign.
Step6
Make sure the offer/pay is not too good to be true.
If the offer/pay is more than you could make in a traditional job doing the same thing, it might be too good to be true and may be a scam. Don't fall for anything that allows you to make $5,000 a week. Do not be gullible. This is hard for most Americans working regular jobs.
Step7
Use resources dedicated to finding legitimate work from home opportunities. See "Resources" section below article.
Avoid Work From Home Scams
Enthusiast 
Comments
Tonig said
on 7/19/2008 It is always good to verify the validity of the job. Great tips.
amylaine said
on 6/6/2008 Very well written. 5 stars.
Psalmist4M said
on 6/5/2008 Thanks for the good info.
Fashionista25 said
on 4/28/2008 People can also check an IP address on whois.net. Sometimes, using this in conjunction with BBB has helped bring scam websites to light.