‘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.
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
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: www.wdfi.org) 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 www.wisconsin.bbb.org) 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 http://datcp.state.wi.us/
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