The pitch usually begins with a great opportunity for you to make a lot of money with minimal effort, even part time or in your spare time. Or, they promise a job of a lifetime, maybe with exotic travel and great salary and perks. Everyone wants to make more money, so it is easy to fall for these lofty promises. Unfortunately, it’s rare for a new business opportunity or job offer s to make anyone a lot of money quickly.
What kinds of business opportunity scams should I watch out for?
There are several common “get rich quick” scams: business opportunity scams, and phony job offers, or training
While there are plenty of legitimate business and employment opportunities available, you should be skeptical of anyone making big promises about how much money you can make.
How do business opportunity scams work?
If you’re seeking new business opportunities or a new job, you may see ads online or receive mail, email, texts, or phone calls offering you new opportunities to make money.
New jobs and businesses often require a lot of paperwork and personal information–both of which can be a gold mine for scammers. Additionally, fraudulent business opportunities will often ask for sensitive financial information, start-up fees, investments, or other costs that they can bilk out of unsuspecting victims.
After promises of big piles of cash fail to materialize, the scammers can become unreachable, potentially leaving their victims broke.
How do I spot business opportunity scams?
Starting a business is risky. New businesses typically take a while to become profitable. But that common knowledge won’t stop scammers from making seemingly impossible promises to lure their victims.
Knowing the law can protect you. A Federal Trade Commission rule (16 CFR Parts 436 and 437) requires anyone selling franchises to provide prospective franchisees with disclosure information, including costs of starting and maintaining the business, names and background information about the parent company’s officers, and the likelihood of your business performing as well as advertised based on actual experiences of other franchisees.
Even if disclosures are provided, do your homework and don’t just rely on the documentation provided by the company. Talk to other franchise owners in person, ask to see their business operation, ask how the company computed potential earnings. Any legitimate franchisor will want your trust and welcome your scrutiny.
If you aren’t provided with this information, steer clear. You should also be skeptical of any ad or opportunity that makes promises like “double your money in six months” or guarantees you’ll make any money at all.
How do I spot job or training opportunity scams?
Just like business opportunity scams, job or training opportunities make big promises about earning lots of money quickly or with little effort. An ad may tell you “learn how to trade stocks for incredible profit and no risk,” or “Make over $100,000 a year in your spare time.”
Most scam jobs are centered around telling you to work from home. Envelope stuffing, product assembly, mystery shopping, reshipping, payment processing, and other work-from-home opportunities can be scams or even criminals duping you into aiding in illegal activity.
Avoid getting scammed by job and training opportunities by doing your homework and researching the business, employer, or training opportunity. Always ask for more written information before agreeing to any payment or investment. If they have little or no online presence, are unwilling to provide more detailed information in writing, or if they have lots of negative ratings, it’s better to keep looking for other opportunities.
Like many common scams, if it sounds too good to be true, it probably is.
How do I get my money back?
If you’ve sent money to a scammer, contact the company you used to process that payment immediately. Reporting fraud to your bank, credit card company, the company you bought a gift card from, a cryptocurrency exchange, or any other payment processing company can help reverse it.
Report any scams, fraud, or suspicious business activity to the Colorado Attorney General’s Office.
