internet business opportunities by Crossofchanges


									Be careful:

‘Net-based business opportunities
Some companies selling Internet-      of Consumer Protection has             Scam Pitches
related business opportunities are    received complaints from consumers
trying to cash in on the Web’s        who say that promises made by          Scam artists use many different
potential using questionable          some of these companies were           methods to pitch a variety of
business practices. Don’t let them    not kept. What’s more, consumers       business opportunities. Here are a
fool you. Although the Internet has   who signed up for credit card          few examples:
vast commercial possibilities,        processing equipment at these
every entrepreneur who buys into      seminars allege they had difficulty    “Company A” says consumers
an online ”opportunity” doesn’t       canceling the lease, after they        can earn big money by
automatically find a pot of gold at   were told in the sales presentation    providing access to the Internet.
the end of the rainbow.               that they could. The company
                                      leasing the credit card equipment      The pitch: Sell machines or kiosks
   “Earn big bucks selling            says the contract states that          that provide walk-up Internet
       Internet-related               leases are not cancelable. So          access, for a fee, in public places
    products or services!”            some consumers have been stuck         like airports, upscale hotels and
                                      paying $65 a month or more for         shopping malls. Consumers spend
You’ll see a variety of Internet-
                                      years.                                 thousands of dollars for the
related business opportunities
                                                                             machines, which the company
promoted in many places including
                                      Consumer Protection advises            promises will generate “amazing”
infomercials, classified ads, in
                                      would-be business people to            earnings. What’s more, the
major newspapers and magazines,
                                      consider shopping locally for help     company promises plenty of
telemarketing, trade show
                                      in establishing Internet related       profitable locations to place the
presentations, seminars and direct
                                      businesses or web sites instead of     machines.
mail solicitations. Some companies
                                      dealing with out-of-state companies
target individuals who are not
                                      operating out of hotels. That way if   The problem: Rather than at the
technologically savvy. In fact,
                                      something goes wrong, they can         high-traffic locations the scam
many pitches appear to take
                                      resolve the matter in their own        artists promise, the machines are
advantage of an entrepreneur’s
                                      community.                             placed in bars and pizza joints.
“Internet innocence.”
                                                                             Consumers can’t possibly make
In Wisconsin                          Consumer Protection also advises       the earnings they were guaranteed.
                                      consumers not to sign contracts
Out-of-state Internet business        for credit card processing equipment
                                                                                      “No computer
opportunity companies have been       until you are reasonably sure you             experience or sales
holding seminars at hotels            will be utilizing the equipment for         experience necessary!”
throughout Wisconsin. The Bureau      the length of the contract.
“Company C” advertises that                 business opportunity owners           the company know you plan to
consumers can earn more than                in person to reduce the risk of       notify law enforcement and other
$150,000 as “Internet                       being misled by “shills”             officials about your experience.
consultants.”                               people paid to give favorable         Keep a record of your conversations
                                            reports. Never rely solely on         and correspondence. If you send
The pitch: Sponsor free seminars            the promoter’s list of references     documents to the company, make
to teach consumers how to “make             because it may contain shills.        sure you send copies, not originals.
money on the Internet.”                                                           Send correspondence by certified
                                        •   Demand to see the company’s           mail and request a return receipt
The problem: The seminar really             claims in writing. In fact, get all   to document that the company
is a high-pressure sales pitch for          promises in writing.                  received it.
Company C’s Internet yellow pages
or Internet malls advertising           •   Ask for a disclosure document.        If you can’t resolve the dispute
business opportunities. The                 Most business opportunities           with the company, several
company promises to deliver                 are required to provide one,          organizations may be able to help
Internet and sales training for a           under the FTC Franchise Rule.         you. Check your phone book for
fee of several thousand dollars.            The disclosure document               the complete names, addresses,
Consumers hoping to launch a                should provide detailed               and phone numbers for these
lucrative enterprise never get the          information to help you compare       organizations.
promised training and never earn            one business with another. Be
the promised amounts.                       skeptical of companies that do        Your local Better Business
                                            not have disclosure documents.        Bureau (BBB) and BBB where the
Check it out                                                                      company is located.
                                        •   Check out the company with
Investigate Internet-related business       the Bureau of Consumer                Your local Postmaster. The U.S.
opportunities as carefully as you           Protection (call: 800-422-7128),      Postal Service investigates
would check out any other                   the Division of Securities at         fraudulent mail practices.
business opportunity. Before you            the Department of Financial
invest or buy into any business             Institutions (call: 800-472-          For more information or to file a
opportunity:                                4325, web: and          complaint, contact the Bureau of
                                            the Better Business Bureau            Consumer Protection at:
•   Realize that seminar “trainers”         (call: 800-273-1002, web:
    or “consultants” often are there in                       (800) 422-7128
    to sell you a business                  your area and the area where                   FAX: (608) 224-4939
    opportunity, not teach you              the promoter is located. These
    Internet basics. In fact, they          checks may not be foolproof,                   TTY: (608) 224-5058
    may be counting on your lack            but they may show whether
    of experience with computers            complaints have been filed                             Email:
    or the Internet.                        about the promoter.
•   Investigate all earnings claims.    Where to Complain                     
    Talk to others who have                                                       Some information taken from the FTC’s fact
    purchased the opportunity to        If you think you’ve been defrauded in     sheet, “”Net-Based Business Opportunities:
                                                                                  Are Some Flop-portunities?”
    see whether their experience        an Internet-related business
    supports the company’s claims.      opportunity, contact the company                             i:cpcic/facts/netbo268 11/00

    Visit previous franchise and        and ask for your money back. Let

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