International Law

Business Opportunity Fraud Rising?

The South Florida Sun-Sentinel admonishes it's readers to Watch for business opportunity fraud

Well are there more suckers out there?

Has the downturn in the economy made people more risk seeking?

Here is the the South Florida Sun-Sentinel says:

"But in your quest to become an entrepreneur, don't get suckered into a deal that will just make someone else money.

Be careful about falling for a bogus business scheme.

And just as important, scrutinize legitimate prepackaged small business opportunities that sound good but often don't deliver the promised income.

Small business opportunity schemes and businesses in a box, as I call them, have grown in part because of the decline of traditional job security and the large number of people who have lost their jobs, the Federal Trade Commission reports.

"We find that typically business opportunity victims want to work hard to supplement their income, but what they don't do is go and see the business opportunity in action," says Lisa Hone, assistant director of the FTC's Bureau of Consumer Protection."

People rely on testimonials, which are usually shills.

They don't go and see the biz op in action because they are given a fake set of distributors to visit.

And even if they saw a real distributor, that person would likely be too embarrassed to say that he thought that the whole deal was a scam.

I have spoken with hundreds of people who have been defrauded: everyone one of them has an excellent story which justifies their actions.

The best due diligence tip is still to check whether the biz op is registered in all the business opportunity registrant states.

Full post as published by Misleading Advertising Law on March 11, 2008 (boomark / email).