Internet 101: How to Avoid Business Opportunity Scams!
(c) 2002 by Dave Turner
Nearly everyday I receive an e-mail from someone telling me that
they were scammed, or asking me if such and such company is a
scam. Because of the amount of e-mail I received, I decided to
write this article. Even though this article was written with a
slant toward business opportunities, it applies to any type of
Internet or mail order offer. If you heed the advice in this
article, you will greatly reduce your chances of becoming a scam
First of all, when checking out business opportunities, make sure
the website you're visiting or the materials you're reading contain
all three of the following:
- A real persons name (not just a company or business name)
- A verifiable telephone number
- A street address (not just a P.O. Box)
If all three of the above are not present, walk away from the offer.
Also, don't consider any business opportunity that doesn't offer
at least a thirty-day money back guarantee. Anything less than
that is unacceptable.
Listed below are the ten most common scams:
1. Business Opportunities Scams:
These offers make it sound like it's easy to start a business
that will earn you piles of cash with little or no effort on your
part; usually accompanied by pictures or banners of mansions,
fancy cars and piles of money.
2. Chain Letters:
In this classic scam, you're asked to send a small amount of
money (usually $5.00) to each of several names on a list, and
then forward the letter including your name at the top of the
list, via bulk e-mail. Many of these letters claim to be legal.
They even include a section of the U.S. Postal Code on illegal
schemes. Don't be fooled. They are not legal. And if you
participate, not only will you be breaking the law, you'll lose
your money as well.
The most common work-at-home scam promises that you'll earn money
for stuffing envelopes. For example, you're promised you'll earn
$2.00 for every envelope you stuff. After you pay a registration
fee, of course. In reality, after you pay the fee, you're
instructed to place classified ads and send out the same
envelope-stuffing ad to others. The only money you'll earn will
come from other people who fall for the scam and pay to register.
Another variation of this scam is home assembly or craft work.
4. Bulk E-mail Scams:
These solicitations offer to sell you bulk e-mail addresses (spam
software) or services to send spam on your behalf. Example:
"Reach 15 million websites, $44.95"! The software is usually of
poor quality. It's spam and a scam. Don't do it.
5. Cable De-scrambler kits:
These scams offer kits or information on how to receive cable
transmissions without paying any subscription fees. There are two
major problems with these offers: 1.the kits and information
don't work. 2.Cable television theft is illegal, and you stand an
excellent chance of paying a huge fine and/or going to jail!
6. Guaranteed Loans or Credit Scams:
This scam comes in a variety of flavors: home equity loans that
don't require equity in your home, personal loans regardless of
credit history, etc. After you pay the application fees, you
receive a letter saying that your loan request was denied.
Usually, you never here from these companies again.
7. Credit Repair Scams:
These scams promise to erase accurate, negative information from
your credit file so that you can qualify for loans, mortgages,
unsecured credit cards, etc. It doesn't work. Not only that. If
you follow their advice and lie on loan or credit applications,
misrepresent your social security number, or get an Employer
Identification Number from the Internal Revenue Service under
false pretenses, you will be committing fraud and violating
federal laws. Another variation of this scam is the promise of a
brand new credit file. Don't do it.
8. Vacation or Prize Award Scams:
In these scams you receive notification congratulating you
because you've won a fabulous vacation, a car or some other prize
award. All you have to do to collect your prize is pay a small
fee (usually several hundred dollars). In return, what you end up
getting is a toy car, (I kid you not) or a vacation certificate
to the Bahamas or some other exotic vacation spot. It's really a
lousy deal. You have to pay for your own airfare, and the
accommodations that they arrange are usually in rundown hotels.
Let the buyer beware!
9. Investment Schemes:
These scams offer get-rich-quick schemes to make unlimited
profits on the world currency market. There are many variations
of this scam, but they all promise the same thing: Wealth without work!
10. Multi-level Marketing (MLM) or Network Marketing Scams:
I know I'm going to ruffle a few feathers with this one, so let
me just say right now that all MLM or network marketing companies
are not scams. Obviously, there are some good, reputable
companies out there. However, there are so many bad ones that
I'm compelled to include the entire industry on this list. Before
getting involved with any MLM or network marketing company,
investigate, investigate and then investigate some more. Don't
get caught up in the hype. And here's a fact no MLM or network
marketing company will ever tell you--not even the legitimate
ones: Unless you have outstanding sales ability and/or people
skills, it is extremely difficult to make any money in MLM or
Before purchasing any business opportunity, you should always
check first to see if the company has had any complaints lodged
against it. The following websites publish complaints and/or scams:
If you do get scammed, report it to the aforementioned websites
immediately. You probably won't be able to recover your money.
Few people ever do. But at least by reporting the crime and
making it public record, you make it harder for that company to
scam anyone else.
In closing, always carefully investigate any business opportunity,
and remember: If it sounds too good to be true, it probably is!
Til' next time ...
Dave Turner is a writer and entrepreneur with over twenty
years of small business experience. Questions? Comments? Dave can
be reached at:
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