Today, side hustles are more popular than ever - especially among those trying to get out of debt. From freelancing to rideshare driving to tutoring, extra income can offer financial flexibility, speed up your debt-free journey, and bring peace of mind. But not every opportunity is what it seems.
Unfortunately, as the gig economy grows, so do the scams. If you're considering a side hustle, it’s critical to separate legitimate gigs from schemes designed to waste your time, or worse, steal your money or identity.
Here are 7 red flags that may signal a side hustle is too good to be true, plus tips for verifying the legitimacy of any opportunity.
Legitimate side hustles shouldn’t require large upfront payments. If a gig asks for money for "training," "starter kits," or access to a special platform, proceed with caution.
🚙 Pro Tip: While some legitimate opportunities may require basic equipment (like food delivery drivers needing a car), always verify these costs through official company websites - never pay a third party.
If it sounds too good to be true, it probably is. Promises of thousands in earnings for only a few hours of work each week are a common tactic used by scammers to lure in victims.
✅ Look for side hustles that provide realistic earnings projections and emphasize consistency and effort rather than overnight success.
Scammy side hustles often use high-pressure sales tactics: “Spots are filling fast!” or “You must sign up today to qualify.” A legitimate gig won’t rush you into making a decision.
🚩 Red Flag Language: “Limited-time opportunity,” “exclusive inner circle,” or “secret money-making hack”
If the job listing is heavy on hype but light on details, it’s time to dig deeper. You should clearly understand what work you’ll be doing, how you’ll be paid and handle taxes, and who’s hiring you.
💬 Always ask: Who is the company? What is the exact nature of the work? How will I get paid?
If the company behind the side hustle has no website, no social media, and no verifiable business information, that’s a major red flag. Likewise, if reviews are overwhelmingly negative - or suspiciously positive - it may be a scam.
🔍 Use platforms like the Better Business Bureau (BBB), Glassdoor, and Trustpilot to research a company’s legitimacy, or ask your friends and family if they're familiar with the company.
Legitimate employers will eventually need your Social Security number or bank information for tax or direct deposit purposes - but not upfront. Be wary of gigs that request sensitive data too early.
🚫 Never share bank account or ID information with anyone you haven’t thoroughly vetted.
If you’re told that your earnings depend more on recruiting others than doing actual work, you may be looking at a pyramid scheme - an illegal and unsustainable business model.
👎 MLMs (multi-level marketing companies) are legal in some cases, but often require heavy recruiting and inventory purchases. And don't forget: legal ≠ ethical or profitable. Read the FTC’s guidance on MLMs to learn more.
Here are 5 steps to protect yourself:
A quick search can reveal a lot about a company's reputation and past actions.
See if complaints have been filed and how they were resolved.
Legitimate businesses provide email addresses, phone numbers, and sometimes physical locations.
You should be able to review how and when you’ll be paid, what’s expected of you, and your rights.
If something feels off, don’t ignore your gut. There are plenty of other legitimate ways to earn extra income.
Of course they can! But in order to make a real impact, it's essential that you:
Final Thoughts
The right side hustle can help you reach your financial goals faster - but the wrong one can leave you worse off. By watching out for these red flags and doing your homework, you can pursue extra income with confidence and avoid falling victim to scams.