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20 Illegal Side Hustles You Should Be Aware of in 2023

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Everyone wants enough cash to meet their needs. But taking on two jobs or working over time can be challenging. This has pushed many people to the darker side of income generation 一 illegal side hustles. 

While some side hustles may seem legal at first glance, they’re illegal when you read the fine print.

This post will cover 20 illegal side hustles you should be aware of to avoid finding yourself on the wrong side of the law.

What Are Illegal Side Hustles?

If a side hustle involves breaking the law, then that job is illegal. 

Different states have different laws regarding what’s considered illegal, so it’s essential to check with your local ordinances to ensure you’re operating within the law.

While there are jobs that break the law, like fraud, there are some which can be considered “legal loopholes.” It’s important to be aware of this for your safety.

What Are Some Illegal Side Hustles?

Here are some unethical side hustles you should avoid at all cost:

1. Bitcoin Fraud

The rise in popularity of cryptocurrency has created new opportunities for online scammers, leading to an increase in Bitcoin scams over the past couple of years. 

Crypto scammers use different methods to defraud people. Some scammers impersonate businesses or government agencies and try to get people to send them payments in cryptocurrency. 

Another popular scam is fake investment opportunities. These scammers promise huge returns if you invest in crypto, often impersonating a well-known and trusted guru.

2. Ponzi Schemes

The Ponzi scheme is one of the oldest scams in the book. Social media has made it even easier for scammers to reach many people. 

Ponzi schemes are a type of investment fraud where funds collected from new investors are used to pay existing investors. Since no legitimate service or product is being sold to generate income, there’s a need for a constant flow of new money. 

The fraudsters typically use social media platforms like Twitter, Facebook, and WhatsApp, advertising an exciting investment opportunity to get people to join. 

Here are ponzi scheme red flags to watch out for.

3. Selling Counterfeit Goods

The manufacture and distribution of counterfeit products is an enterprise that has been around for a while, and it’s a multimillion-dollar industry. 

Some of the most common counterfeited items are footwear, clothing, electrical equipment, pharmaceutical products, jewelry, and cosmetics. 

While counterfeited products sell very fast, it’s not a good idea to sell them as a side hustle, as possessing, selling, or manufacturing counterfeit goods is illegal. 

4. Reselling Specific Items

Generally, reselling items you’ve purchased before is not illegal. If you legally buy a product, it’s yours to do as you please. 

However, there are instances where reselling specific items is illegal. For example, selling items with a warranty, like electronics or high-end bags and clothing, requires that the manufacturer recognize you. That’s why you receive a warranty for the products. 

Reselling some products also infringes on trademark laws, depending on your business’s size. 

5. Selling Homemade Cosmetic Products

Perhaps you’re considering selling soap and other homemade bath products on Etsy. After all, it’s a popular side hustle. What makes selling homemade soap one of the illegal side hustles? 

There are several FDA regulations and labeling requirements you have to meet before you sell your soap and bath bombs on Etsy or any other platform. 

You must follow the FDA guidelines for labeling in your marketing and ensure the product is safe for consumers when used as intended.

6. Freelance Writing on Specific Topics

Freelance writing is one of the most popular side hustles, and many people are actually making a living writing. 

So how is it one of the illegal side hustles? For instance, publishing someone’s private information without permission could expose you to legal liability. 

If you write and publish information that negatively impacts the reputation of a person or causes emotional distress to someone, you could be sued for defamation or false light. 

This also involves publishing information about private businesses. 

7. Reselling Tickets

Reselling tickets is one of the most lucrative side hustles

You buy many tickets when they’re on sale and resell them later when they’re sold out, often for even double the price you got them for. However, it’s illegal to resell tickets without the explicit permission of the event organizers. 

If you bought tickets for yourself but cannot attend the event, it’s perfectly legal to resell the tickets to someone else. However, ticket scalping as a business is illegal in many states. 

8. Reselling e-Books

Selling e-books is another side hustle that has risen in popularity over recent years. However, it’s illegal to sell pirated books because it counts as copyright infringement. 

According to copyright law, you cannot reproduce copies of someone’s original work or distribute the materials without their permission. 

While it’s an illegal side hustle, there are many people reselling e-books on sites like Amazon and eBay. It might be lucrative, but it’s not worth breaking the law. 

If you’re interested in the e-book business, consider publishing your own or get paid to read books aloud.

9. Selling Homemade Food

If you’re a chef or baker, you’ve probably considered selling homemade food and pastries as a side hustle. To avoid inadvertently breaking the law, it’s crucial to be acquainted with your state’s cottage food laws. 

In most states, you must have food handlers permit, which typically requires a short training course. 

The law also restricts the type of food you can sell from home. You’re only allowed to sell low-risk foods like dry foods, baked goods, coffee, and tea blends.

10. Running a Dog Bakery

Starting a small business is a great side hustle idea, especially one that only takes up a little of your time. 

Selling dog treats, for instance, is a great way to make a few extra bucks. While it’s not illegal to sell pet food, it’s highly regulated in all states. 

Pet food is regulated by the Food and Drug Administration (FDA). The law requires that all animal foods be produced under sanitary conditions, be safe for consumption, contain no harmful substances, and be truthfully labeled. 

11. Hosting Poker Nights

There’s nothing wrong with having a few friends over for poker night. The problem is it could easily lead to illegal gambling, which can get you in trouble with the law. 

No federal laws address private poker games, so it’s left to state governments and gambling agencies. Some states outlaw private poker games, while others allow them only under certain conditions. 

Gambling laws are in place to protect citizens from exploitation. It’s important to acquaint yourself with the laws and ordinances in your state before hosting regular poker games. 

Extra Reading: Games that Pay Instantly to Cash App

12. Sports Betting

Perhaps you’ve thought of sports betting as a side hustle. After all, it sounds like easy money. 

However, you should think carefully because, in some states, sports betting is one of the illegal side hustles. 

Gambling of any form is highly regulated in all states. Many illegal bookies take advantage of lax or nonexistent laws to exploit Americans. 

The internet has made it particularly easy to set up illegal online sportsbooks. 

13. Selling Stolen Goods

This is a no-brainer, but possession and reselling stolen goods is a crime in all states. 

Interestingly, some people intentionally deal in stolen goods, known as fences. They’re the middlemen between thieves and buyers. 

While selling stolen goods for profit might be lucrative, is it worth breaking the law? If convicted, you face up to a year in jail for a misdemeanor or three years for a felony. 

14. Breeding Puppies

Pets are always in demand, so maybe you’ve thought about breeding puppies for sale. While puppy mills are not illegal, there are many concerns about the conditions of animals bred in mills. 

The Animal Welfare Act, passed in 1966, outlines the minimum standards of care for dogs, cats, and any other animal bred for commercial use. 

Breeding and selling pets is a lucrative side hustle, but many ethical issues come with breeding pets for sale.

15. Phishing

Cybercrime has been on the rise over the past couple of years. Phishing is one of the most popular forms of cybercrime. It’s the act of sending scam text messages or emails to people to lure them into providing personal information. 

Such information can be sold on the dark web or used for identity theft. These are serious crimes, and you could serve a jail term of one to five years if caught. 

16. Insider Trading

It goes without saying that insider trading is one of the illegal side hustles. 

Insider trading refers to making a profit by selling or buying stocks based on undisclosed information you obtain from a friend or family member. 

The next time you get updates from your friend or family member about their company, ensure the information is public before acting on it. Otherwise, you could end up paying a fine or facing jail time of up to 20 years.

17. Credit Card Skimming

Credit card skimming also falls under illegal side hustles. 

It’s the act of attaching a skimming device, which steals credit card information from unsuspecting individuals. Criminals use this information to create fake credit and debit cards to steal from the victims’ accounts. 

If you’re thinking of this as a side hustle, consider a legal alternative. If caught, you’ll be charged with credit card fraud, which is punished as a misdemeanor or felony, depending on the value of the property obtained with the card. 

18. Under the Table Jobs

Unreported employment or under-the-table jobs also fall under illegal side hustles. 

Odd jobs like mowing your neighbors’ lawns, babysitting, or plumbing are legal side hustles. A legal problem arises when you don’t report your earnings from these jobs. 

These jobs are generally the best side hustles because they’re easy to find. However, ensure you keep track of the jobs and your earnings to avoid being charged with tax evasion.

19. Working as a Money Mule

Working as a money mule is an easy way to earn fast money. However, you should avoid it because it is one of the illegal side hustles. Don’t accept to transfer or move illegally obtained money on someone else’s behalf. 

If you’re caught serving as a money mule, you’ll be prosecuted as part of a criminal money laundering conspiracy, which has serious legal consequences. 

20. Identity Fraud

Identity theft is one of the most popular scams. It has been around for a while, and people use identity fraud to make money. 

If you’re thinking about scamming people as a side hustle, you should be aware that it’s illegal. 

Hacking and scamming people for a living is not only illegal, but it’s also highly unethical. Most of these illegal side hustles are lucrative but not worth breaking the law.

What Are Good Side Hustles?

As you’ve seen, illegal side hustles can put you in trouble. Here are good side hustles to consider without worrying about state laws.

  • Blogging: Starting a blog is a good hustle, but it takes a while to make money from the venture. You can monetize your blog over time once gain a considerable traffic.
  • Online jobs: There are several online jobs that pay hourly. If you’re a good writer, graphic designer, bookkeeper, or web developer, you can make money online.
  • Pet sitting: Pet sitting is a fun, easy way to make a few extra bucks. There are now apps you can use to connect with people looking for these services. In fact, 10-year olds can offer pet sitting services.
  • Food and grocery delivery: Food delivery is one of the best side hustles to consider, especially if you own a car. You can earn good money delivering food and groceries to people. Uber Eats, Doordash, and Instacart are perfect places to find such jobs.
  • Rent out your car: Renting out your car is one of the easiest ways to make passive income. If you don’t use your car often, consider signing up for a rental service like Hertz and Avis.
  • Online tutoring: If you’re knowledgeable in a particular field, consider online tutoring. There are many people looking for information online, and you can use your knowledge to make money.
  • Sell feet pics online: Another lucrative side hustles that’s legal in many countries is selling feet pics online. With several apps to sell feet pics, you can start making money.

Final Thoughts on Illegal Side Hustles

Side hustles are a great way to earn an extra income and ensure you’re not living paycheck to paycheck. However, you shouldn’t be willing to do anything to earn money. Illegal side hustles, for example, are not worth it.

There are many legal and safe alternatives you should consider instead. It’s advisable to find side hustles you enjoy and find fulfilling.

Happy side hustling!

Illegal Side Hustles FAQs

Is a Side Hustle Illegal?

Side hustles are not illegal. You’re allowed to find other ways to make money on the side. However, there are illegal side hustles that break state or federal laws.

How Can I Make a Lot of Money Fast Legally?

The fastest way to make a lot of money legally is to sell your possessions. For example, you can put your car or electronics up for sale. You can also sell sneakers for cash.

What Is the Highest-paid Side Hustle?

Working as a consultant is one of the most lucrative side hustles. Because you’re an expert in your field, you get to set your rates and work with businesses and individuals of your choice.

Lydia is a personal finance expert and the founder of Sproutinue, a personal finance site helping you find legit ways to make money, save money, and achieve financial freedom. She has been featured on various major financial publications, including Investopedia, Business Insider, GoBankingRates, and more.

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