While we work hard to put legitimate information out there for our readers about the realities of starting and running a business from home, sadly, hundreds of thousands of people still fall for scams every year.
More disturbingly, of the top ten internet scams listed by the FTC, HALF of them are targeted to individuals who want to work at home.
1. Internet Auctions (Both businesses and consumers are scammed in auction sales that never deliver the money/products as promised)
2. Internet Access Service (Trapping people into long-term contracts for internet service by giving them a check with ‘conditions’)
3. Credit Card Fraud (NEVER give a credit card number to prove you are over eighteen. DUH.)
4. International Modem Dialing (Getting you to download a trojan horse that makes long-distance calls from your modem)
5. Web Cramming (Signing you up for something without your consent)
6. MLMs and Pyramid Schemes (When the primary consumer of the products happens also to be the people who are selling it)
7. Travel and Vacation (Classic bait and switch or bargain packages stuffed with hidden fees)
8. Business Opportunities (Exaggerated earnings claims for a marketing system that is more of a marketing SPAMstem)
9. Investments (Buy into our big-money day-trading system!)
10. Health Care Products and Services (Buy our cancer cure today!)
Since I’ve not fallen for any of these scams (thank goodness), I can only speak from my personal experience. But between my years of marketing and lots of guidance from the FTC, here are some red flags to help you stay away from home business and internet marketing scams:
Red Flag #1: The System Does the Work for You
Anything that leads you to believe that the system will do the work for you, and all you have to do is sit back and let the money roll in is something you should run far, far away from. EVERYONE who runs an internet business will tell you the same thing I am about to tell you: running an internet business is just as much work as running a brick and mortar business.
You can’t open up a shop and expect floods of customers to walk through your door. So don’t expect it to happen online.
Red Flag #2: My Only Product Will Teach You How to Make Money Online!
Now, honestly there are some legitimate marketers whose main business is to teach. But if you do your research, you’ll be able to find pages and pages of independent information regarding that person, and they usually are also endorsed or work with larger trusted companies or publications. Jeremy Palmer has earned awards from Commission Junction. Rosalind Gardner writes for Revenue Magazine.
The key differentiator is that they are teaching from experience. Both of these people haven’t always sold internet training programs; they learned the ropes first.
I have an acquaintance who shall remain nameless who tried to sell a marketing training program, but I knew first-hand he wasn’t teaching from experience. His web site had a Google Page Rank of 0, his Alexa rank was around 7,000,000. A Google search on his name produced his personal Geocities blog with his ‘fat’ pictures that he took as he was trying to lose weight from two years prior. If the person who wants to train you on internet business can’t build his own link credibility, his own traffic, and can’t even manage his Google reputation properly, you DON’T want to hire him to teach you how to run a business online.
Red Flag #3: Our BBB Profile is Clean!
In this day and age, you can rename, rebrand, and re-scam new clients in less than a day. Sadly, unless you have a way to prove that this company has been doing business under this name for a good length of time, the BBB isn’t very helpful.
You can check the age of the domain name of the site that is offering the opportunity through WhoIs. Do a search on a domain and it will tell you the “Created On” date, or provide a link to the registrar that has that information. I’d consider it a big red flag if their domain was recently registered, and would immediately pass it up to find a more established program.
Red Flag #4: Our Franchise Opportunities are Going Fast—Act Now!
Franchises can be a great way to get up and running if you have limited experience. But they can also rob you of significant amounts of money if you don’t do your homework.
Legitimate U.S. based franchises are legally required by the FTC to provide you with a detailed disclosure document at least ten business days before you pay any money or legally commit yourself to a purchase. And I can’t stress more highly for you to consult with a business attorney before you sign anything.
Red Flag #5: Earn $10,000 a Month With Our Proven Program!
Any program that touts specific earnings must give the number and percentage of previous purchasers who achieved the earnings. If an earnings claim is there—but the additional information isn’t—the business opportunity seller is probably violating the law.
What I have seen on many of these opportunities is something to the effect of “these results aren’t typical.” Well, of course they aren’t, because anyone who can make that kind of money online is going to do it with or without your #$%& program or system.
More Help and Resources to Keep from Getting Scammed
When in doubt, PLEASE do your homework and take the time to do more research. Most of these programs have a high-pressure pitch that uses tactics to make you feel you have to BUY NOW. I have no problem with sales pitches; I do have a problem with anyone pitching programs with the intent on taking your money and not delivering something of value back to you.
The FTC has a fantastic website that will help you avoid everything from MLM scams to envelope-stuffing scams. If you are serious about starting an internet business, read through these documents first before you shop for the training materials or marketing system that is right for you.