Creative Consumer: Business 'Opportunities' or Scams?
Elisabeth Leamy warns about bogus business opportunities and how to avoid them.
Oct. 15, 2007 — -- The Federal Trade Commission has just shut down a company that was selling bogus business opportunities. The FTC said the owners persuaded 1,300 consumers to pay amounts ranging from $5,000 to $25,000 for "dealerships" selling business cards and other paraphernalia. It's just one more reminder that in the quest for financial freedom, many folks go down the wrong path.
Vending machines. Display racks. FCC radio licenses. Medical billing businesses. Internet kiosks. These are some of the most common fraudulent business opportunities offered by con artists.
What makes them scams? High startup costs, grossly overestimated earnings potential, small or poor-quality territories and products nobody wants. Fraudulent business opportunities are advertised in newspapers and magazines, on the Internet and through infomercials.
The people pushing these "opportunities" promise you can earn big money even if you have no experience. They claim the opportunity is only going to be available for a short time so you need to make a quick decision. They say it's a "sure thing" that will set you up for life. They gush that you can work from home and set your own hours. They promise to coach and support you every step of the way. And they tell you the very same program made them rich.
If you're still skeptical, they give you a few references to call. The company pays these fake references or "shills" to say glowing things about the opportunity. If that's not enough to draw you in, the promoter promises you can get your money back if you're not satisfied. But good luck getting a refund.
The FTC sues business opportunity promoters every couple of years.
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