Bailout

The FTC?s attack on business opportunity scams

By Felix Salmon

Well done to the FTC for putting some serious resources into attacking business opportunity scams. It doesn’t hedge, it doesn’t say that some are better than others — instead it says in a simple and forthright manner that if someone is advertising a “business opportunity”, even if it’s a celebrity like Adam West, you should run fast in the other direction:

Want to “be your own boss,” “work from home,” or just “make extra money“? Then you may be tempted by an ad for a business opportunity. Before you open your checkbook, check out the offer. Fraudulent business opportunity promoters use the classifieds and the Internet to tout all kinds of offers, from pay phone and vending machine routes to work-at-home businesses like medical billing and envelope stuffing. Too often, these ads make promises - about earnings, locations, merchandise, or marketability - that sound great, but aren’t truthful. The result: consumers are getting ripped off, losing money instead of making it.

The FTC does have a guide for the media, which seems to be very widely ignored: is there any way that it could grow some teeth and actually punish media outlets which willingly broadcast these scams? I hope TV and radio stations, in particular, don’t manage to wriggle their way out of the oversight of the FTC, the FCC, and the new consumer financial product commission: these ads really should be regulated heavily.

Full post as published by Macroprudential on July 01, 2009 (boomark / email).