Scams: Tips on How to Detect Business Opportunity Scams
"Make $5000/month, starting from your very first month, working part-
time from your home!"
"You can be a millionaire in 6 months - you just have to have the
desire!"
"This is the EASIEST way to get rich - practically overnight!"
"Send $5 to the person at the top of the list below and you can get back
$5000!"
"Turn a $10 investment into $10000!"
"No selling or direct contact with customers - we'll do all the work for you
and you'll just sit back and collect the cheques!"
"Join today! This offer won't be available for long!"
The hype is endless. People struggling with the day-to-day frustrations
of their jobs want to believe in all the get-rich-quick hype that can be
found all over the internet today.
Unfortunately, many people are so desperate to escape their jobs that they quickly put their hard-earned
money into some unscrupulous opportunities - and end up that much
poorer.
Don't get me wrong; there are legitimate money-making opportunities
out there. But you won't get rich by doing nothing.
You have to put in a lot of hard work to make money. And yes, you will have to sell - even if
it's not face-to-face or phone selling to customers, you'll have to sell
something else. For example, if you have an internet business, you
have to sell yourself (so that people will believe you're credible), and
your website (so that people will visit, tell others, link to you, etc.).
One of the top scams is pyramid schemes. Everyone's familiar with
these, and people still fall for them everyday because they're so
attractive. Take note: pyramid schemes are illegal in most countries!
Pyramid schemes are those opportunities where the focus is on
recruiting members rather than selling a product or service. You usually
have to pay some sort of fee to become a member; at that point, you get
paid for every member you recruit under you. You also get paid for
every person the member you signed up signs up under them (does that
make sense?).
That's the general gist of it. But pyramid schemes often get confused
with Multi-Level Marketing (MLM). MLM is a legitimate and booming
business. Check the list of resources below for a
more detailed explanation of pyramid schemes.
Be forewarned, though: there are definitely some fly-by-night MLM
companies out there. You buy their product and try to sell it to others.
When you call them for support, they're gone. Disappeared, with your
money and everyone else's money.
Other common scams are the envelope stuffing and assembly work
scams. They're not always scams; just be careful and research them before you
put your money into them.
The envelope stuffing scam usually claims to pay you a certain
amount of money for each envelope you stuff and send back to the
company. Sound good? Nice, easy job? NO. This type of offered work
screams out, scam!. These days, we have sophisticated machinery that
can stuff envelopes far faster than any human. Why pay someone to stuff
envelopes when you can get a machine to do it?
Assembly work is often a scam as well. Companies may offer a
prospect a certain amount of money if they assemble a product at home.
The company provides the required pieces, you do the work in your
spare time. What often happens it that they tell you that your work is not
"up to their standards", and that they can't accept it. You end up with a
bunch of junk and less money for all your hard work.
Your best defense against scams is research. Lots of it. If you find a
business opportunity that interests you, find some appropriate
newsgroups or message boards and talk to others. You will get the best
advice from other people who have tried the opportunity. If you get a
bunch of negative responses, forget about wasting your efforts to find a
positive one - it won't make it all right. Overwhelmingly negative
responses should tell you immediately that the opportunity is a stinker.
Sure, it's a big disappointment, but it saves you money and aggravation.
Here are a few guidelines that should immediately make you suspicious
of a business opportunity.
They tell you that you can be rich very quickly. This should put
you on alert! If it sounds too good to be true, it usually is. While we
would all like to be able to make $500/day, starting from our first day
and continuing into infinity, it isn't very likely.
You're told that you don't need to do any work - they do it all
for you. You cannot be successful without putting in a lot of hard
work. Don't believe them.
You're told that anyone can make money. Again, not true. A lot
of opportunities use a great deal of hype to sign you up (and get a
commission off you). But every job requires a different set of skills,
and being told that anyone can get rich off their "program" is just
hype. Take it for what it is.
There are a lot of $$$ and money-related graphics and !!! all
over the website. Be careful. Again, they might just be trying to
get you to sign up. This is NOT to say that a professional-looking
advertisement for a business opportunity is legitimate! Not all of
them are, either.
The advertisement doesn't tell you what's involved. If they tell
you that you first have to send them money, fill in a form so that
someone can contact you, etc.., be suspicious. Do NOT send them
your money!
The company won't publish their address, even if you ask
them. There is no reason for not providing this information, unless
they have something to hide.
Telephone calls to them remain unanswered. If they don't want to
talk to you, there must be a reason!
They don't accept credit cards. NOTE: Just because they DO accept
credit cards doesn't mean that they're legitimate ... and just because
they don't does not mean that they're not legitimate! It's much easier
to scam people if they don't have a credit card company pursuing them for
fraud ... Do your research.
The company uses high-pressure sales tactics to get you to
sign up right away. If the opportunity is legitimate, it will still be
around tomorrow, next week, next month, or next year. Never rush
into anything.
The company lies. To figure out if they're lying would require some
research. If a company claims they're a member of the Better
Business Bureau, and you find out that they're not - don't trust them!
Other people have had bad experiences with them. Join
message boards on the internet or find others who have had some
experience with an opportunity. Never just use the testimonials the
company provides you with. Seek out your own.
The best way to research an opportunity is to talk to others who
have been involved in it. Talk to LOTS of other people, so that you
get a lot of different perspectives!
You can also check with various agencies. The Better Business Bureau
is one of them; they have offices all over North America. Their website
is http://www.bbb.org.
There's also local Attorney General's offices,
various consumer protection agencies, the Federal Trade Commission
(FTC), and the National Fraud Information Center. Contact information
for some of these agencies can be found at the bottom of this article.
If you do join a company and then after some thought, believe it to be a
scam, ask for a refund immediately. You might get it. Note the person
you talked to, the date, the time, and any other relevant information.
Call them repeatedly until the refund is issued to you, or until you decide
you need to take further action. A few interesting tidbits to note are:
If your opportunity turns out to be a scam, your credit card company
may be able to reverse part of the charges. This varies with the credit card
company, so check with yours. Your liability is usually limited to somewhere around $50.
Personal purchases can be reversed within 3 days. This is so that
people who were pressured into buying have time to think it over; if
they come to the conclusion that they made a mistake buying it, the
charges must be reversed.
If you order a product by mail order, there is an automatic 30-day
money-back guarantee that companies must honor if the product is
shipped by US or Canada postal services.
So what do you do if you get scammed? You can report it to most of the
agencies listed in this report. The best thing to do is to find others who
have become victims of the same company, and all of you submit a
report. That way it looks like there really is a big problem. If it's just you
complaining, then they might take it to be just one person whining about
their particular situation.
Research your opportunities well; it will save you untold amounts of
money, time, frustration, and wasted effort. And, of course, if you find a
good opportunity, go for it!
Resources For Investigating Business Opportunities
Offers online reports on companies, members and non-members alike. You can also call companies, members and non-members alike. You can also call your local BBB, which should be listed in the phone directory.
Deals with telemarketing frauds. You can get advice about telephone solicitations, and use them if you want to report a telemarketing scam to law enforcement agencies.
