I contract thru Arise and have been doing so since December 2009. It is not a scam at all.
First, check into local, small computer companies to see if they can build you a pc for a lot less than the cost of a new one. I was "lucky" enough to still have a 2005 pc with Windows XP on it. I guess it pays not to have the latest and greatest sometimes
Second, a second phone line would not be necessary if you would be willing to have your main phone line be your work number - it has to be a no frills line -- no voice mail, call waiting, etc. That would work until you made enough to get a phone installed. I live in FLA and paid Verizon $180 for a phone install and its $7/month for the line once installed.
Third, a new phone is not necessary. Depending upon which client you work for would determine what kind of phone you would need. Most phones (just a pad with numbers really) and headset typically run about $80 for a great brand. I have a GN Netcom brand that I've had for nearly 5 years and it works just fine.
The background check is non-negotiable. Arise wants to make sure it's not hiring people who have a habit of stealing identities (you are working with the public and personal info) or credit card numbers (depending upon the client, you will be obtaining that info too).
As far as the training fee ($99) -- it was offered for free just recently. Keep an eye out for half off and free -- Arise always seems to run them.
Each client requires a fee for their training as well, so keep that in mind. Most run from $25 - $150, depending upon the client. Those are sometimes offered at reduced cost as well.
Arise does charge a fee for their service each month too -- it's $19.95 per invoice ($40/month).
The incorporation fee per state will vary -- most you can do online for a nominal fee. Florida was $150, I think. Keep in mind that all of these fees are tax writeoffs and you will be working out of your home so that is a great tax benefit as well. If there is any way for you do be your own Virtual Service Corporation (VCS), that is the best way to go in the long run.
The BEST part of working for Arise is the flexibility -- I make my own schedule each and every week!!!
I'd be happy to answer any other questions you have, to the best of my knowledge, of course.