Out of a job? Don’t Bet Your Life Savings on a Scam Warns Better Business Bureau

September 10, 2013

If you don’t have a job, it is easy to be enticed by postings offering new business deals that claim you can be your own boss and make over $100,000 a year. Before even considering a new business opportunity, the Better Business Bureau (BBB) warns that it is critical that you read all documents closely before signing to make sure the new business deal isn’t a scam.

It is easy to immediately want to sign something that promises you a lot of fast money, especially in today’s economy.  However, when sellers promise consumers a significant amount of money, it is often a scam.

According to the Federal Trade Commission’s (FTC) Business Opportunity Law, salespeople asking you to sign on the dotted line or send money for a business opportunity must provide a disclosure statement and an earnings claims statement.

The BBB urges people to carefully read the disclosure document because it must identify the seller, mention the new business refund or cancellation policy, say whether the seller is making an earnings claim, mention lawsuits against the seller and must provide a list of references. The earnings claim statement must tell how much money a person could earn. The statement must include name of person making the claim, the specifics of the claim, start and end dates earnings were achieved and the numbers and percentages of people who got the results the seller claimed are true.

A recent victim of a new business opportunity scam from Zaken Corporation, told the BBB, “They sent me a mailing about an opportunity and I was out of work and desperate to try something. I sent them my last $100,” said Cicerchia. “After reading the documents I called to cancel within the allowed time period and had trouble reaching them. Then they refused to refund the money because I had gone past the allowed time.”

The BBB offers the following tips:

  • Study all documents before signing or sending money. Take a careful look at the disclosure document, earnings claim and contract. Make sure each document is specific and is clearly laid out.

  • Interview current owners of the seller’s business opportunity. Ask these people all the tough questions you have. For example, ask if the disclosure document matches with their actual experience.

  • Require proof from the earnings claims’ statements. For statements such as “Earn up to $10,000,” it is your right to ask for proof.

  • Listen to sales presentations closely. Make sure you understand every aspect of the new business opportunity. Pay attention to what the seller is trying to sell to you.

  • Consider getting professional advice. In these kinds of situations, lawyers, accountants or business advisors are always willing to look over the paperwork before you sign.

  • Do internet searches for the seller. Check for any complaints or scams associated with the company by looking at websites such as Better Business Bureau and State Attorney General’s office. Remember, having zero complaints doesn’t necessarily make a company legitimate.

For more tips and information about scams, visit www.bbb.org