International Law

Is That Business Legitimate or a Scam?

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John Tozi, writing at Business Week, has a good article on business opportunities.

He writes: 

"The Internet is littered with offers for home-based business opportunities that promise big profits for easy work.

But many of these offers, which range from envelope stuffing to medical billing, are really scams that prey on people's aspirations to work for themselves.

Business opportunities share three characteristics: a solicitation to the buyer, a mandatory payment to the seller, and a promise to help the buyer find locations or leads that will bring profits.

They're often advertised in classified ads, online, and in spam e-mail. Many claim to be low-risk ventures with money-back guarantees, and no experience necessary.

Offers stress how much the participants can earn each week in specific dollar amounts, and fraudsters often have shills who falsely testify about their own success."

Most ordinary observers, including regulators, are puzzled by the fact that people routinely fall for the magic weaved by business opportunity fraudsters.

John was kind enough to quote me on this very idea:

"Experts say anyone can be taken in by the right pitch.

The techniques are no different in kind from the ordinary marketing techniques that normal sales people use. They're just selling nothing," says Michael Webster, a Toronto lawyer and the author of a blogon business opportunity fraud.

Anybody can be a mark on any given different day. Even I could be. [a mark]"

Read John's entire article on business opportunities, and especially his slide show.

Full post as published by Misleading Advertising Law on July 24, 2008 (boomark / email).