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Work
At Home Scams!
The following
page describes some common scams. These scams are
consistent through out the internet and offline. You will find that scams are
not necessarily classified or as clear cut as we have laid them out here.
However most scams follow criteria or patterns we have laid out below. Knowing
the criteria will help you better determine a scam even if its disguised differently. Please keep in mind that common sense should be exercised in
respects to some of these criteria. I have found that any given company can
display one or even a few of the characteristics listed, however it doesn't necessarily
mean it is a scam. Use your judgment or
search
these other consumer protection agencies to research any company that you may be
interested in.
Envelope Stuffing
Scams
It seems
like every mail order publication has at least one ad
in it promising hundreds of dollars a week, just for
stuffing envelopes. Some even promise to pay $4 or $5
per envelope stuffed! So, many people send off their
hard earned money for the "registration fees" so they
can get started on this easy work. Then they are
disappointed when they discover they've been duped.
Here's why the envelope stuffing programs are nothing
more than scams.
First of all, the idea of paying someone to stuff
envelopes is ridiculous. Why pay someone even 50 cents
to stuff an envelope when you can get an envelope
stuffing machine for a few hundred dollars? There must
be more to what you'll have to do then simply putting
a paper in an envelope.
In fact, there's more. The most prevalent envelope
stuffing con game goes like this. You pay your
"registration fee" _ usually around $30.00, pure
profit for the scam operator.
The operator will then send you a copy of the ad you
originally responded to, along with the wording to a
classified ad, telling people about how much money
they can make stuffing envelopes, and to send a
self-addressed stamped envelope for information. When
you receive someone's SASE, you send them a copy of
the ad.
You have just "stuffed an envelope." If the poor
sucker sends in the registration fee to the operator
(like YOU did), the operator will send you $1 (or
whatever was promised in the ad) for "stuffing the
envelope." The operator is left with expenses of
around $2 and a profit of $28.
Basically, you are doing all the advertising work for
the operator for extremely low pay. You should expect
a response rate, if you're lucky, of 1/4% to 1/2%. At
1/2%, you'd have to get 200 responses to your
classified ad to get $1. Good luck.
The other most common scheme goes like this. You send
the usual registration fee in, and the operator sends
you a package containing all the components of the
operators mailings. You must assemble them, fold them,
and stuff the envelopes according to the operator's
very exacting instructions.
Then, you send the stuffed envelopes back to the
operator. You will be paid for each stuffed envelope
that "meets their standards." Of course, none of the
envelopes you stuffed will meet their standards. They
will find some reason not to pay you. Of course, that
doesn't prevent them from still sending out the
envelopes you stuffed...
So, you can see, that joining an envelope stuffing
program is a bad idea. Save the money you'd send in
for the registration fee, and put it towards a
legitimate mail order business, and you'll be happier
and more successful.
More Scams!
Chain Letters and
Pyramid Schemes and Why They Don't Work!
If you are active in mail order, you've no doubt seen
tons of chain letters and pyramid programs. In case
you're not familiar with them, here's an overview, so
you know what to watch out for.
Chain letters are those letters you get, instructing
you to send, say $5, to the 4 to 6 people on the list,
who will send you a report, or some product, or
sometimes even nothing. Then, you add your name to the
bottom of the list, moving the others up, and the top
one off.
You then print and mail out as many as you can, hoping
others will do the same as you. The letters are
liberally sprinkled with references to how much money
you will make, and how many people are sure to
participate. Some even go so far as to promise you
$1,000,000 and more, sometimes in less than a month!
Pyramid schemes are what chain letters are based on.
You buy into one, then you need to recruit others
below you, to move you up the line. The people you
recruit, in turn, need to recruit others, and so on.
Pyramids go by all kinds of names and formats.
For example, "Airplanes" are a popular pyramid scheme.
There are 8 "passengers," 4 "stewardesses," 2 "
co-pilots," and 1 "pilot." When you buy in, you pay a
predetermined amount, like $10, to the pilot. That
makes you a passenger.
When you recruit 8 more people, you become a
stewardess. Your 8 people then need to recruit 8 more,
to move you up, and so on. You're promised that you
will get hundreds of dollars when you're the pilot.
These programs all share many characteristics.
First, they're illegal. Don't believe what the chain
letters say, that someone "showed it to the
postmaster, who assured him it was legal," or "it's
legal, check the postal codes."
Pyramid games are illegal because you're paying money
for nothing, in a shaky con game which can fall apart
if recruiting drops off. With a chain letter, it's the
same, but it's conducted through the mail, which opens
up mail fraud laws, also.
Second, the mathematics used in the letters and
schemes is flawed.
Most chain letters will say you should expect a 5% -
10% response from your mailings. As anyone in mail
order will tell you, this is absurd, especially in
regard to chain letters.
But, let's go with a 5% response on a chain letter
with six levels. For the sake of argument, let's say
that everyone who participates mails out 2,000 copies
(though most people drop out without mailing more than
a few).
What you are doing in a chain letter is relying on
others to do the work that will make money for you.
There is no such thing as free lunch. Somewhere along
the line, people will drop out and everybody loses!
It doesn't matter if the chain letter/pyramid involves
sending money, recipes, stamps, or any product or
object of value. It's still ILLEGAL and a poor
business proposition.
More Scams!
Examples of Mail
Order Scams
After spending the last few months investigating
certain types of mail order businesses, it was obvious
that some of them were border line questionable, if
not a verifiable scam.
EXAMPLE 1 Collect names for us. We pay $20 each.
Guaranteed! The truth is, this company WILL pay you
$20 for each name you collect for them. What they
DON'T tell you is that each person has to spend $100
or more by placing an order before you get your $20.
The customer is led to believe that all they have to
do is get out their phone books and start sending the
company names and addresses. In return, the company
will send them $20 for each name and address they send
them. When they send away for the details they
discover the scam and think everybody in mail order is
operating this way. Result: Mail order is labeled as a
scam and illegal business activity.
EXAMPLE 2 "How to get 100,000 people to send you $5
each. Send $5 to..." This is cute advertising, but you
have to put a legitimate product behind claims like
this. One of the materials I found was a book with
this title. And you get the book for sending $5 to the
publisher. Some so-called seasoned pros will abruptly
judge this as a scam. To some extent, these people are
not pros. They're just jaded. For mail order
neophytes, this is very intriguing. Besides, it only
costs $1 to find out. What the beginner finds out is
that they are expected to run the same ad in
newspapers and tabloids. Other people will send $1 for
information and their mailbox is "supposedly" flooded
with $1 bills. This ad is NOT illegal. It asks you to
send $1 for information and you DO get the
information. It's just something you should keep in
mind so your expectations aren't high.
These types of ads are all a bunch of paper-passing _
and can be classified under the heading of a
"Legitimate Scam." You can't complain that your order
was not filled. You can't complain the idea is not
possible. You can't complain the ad promised something
it didn't deliver.
Likewise, do not confuse scam-sounding ads with
legitimate lead-generation ads." A mail order company
may run an ad that states: "Want to make a lot of
money? Call (this telephone number.)" This is NOT
necessarily a scam or rip-off. Since there is no cost
involved _ it might be worth your time and effort to
call the number and see what this dealer has to offer.
Also, some dealers run ads that don't tell you what
the product is because they have an entire package of
information they want to send you. It would be too
costly to advertise the complete information in a
small 1" or 2" ad, so they run "Lead-Generating Ads"
to bring them inquiries. This is also not illegal and
is common business practice. You'll also find that
real "Lead-Generating Ads" DON'T ask you for a lot of
money up front. They only tell you enough about the
product to entice you to send in a SASE
(self-addressed stamped envelope) or $1 for more
information. They are unlike the "Example 2" that
basically tell you the scam before you order it! (It
may take a little time for you to make the distinction
between these fine lines.)
Many people overlook the power of the printed word.
Instead of complaining, people should be writing their
mail order publishers when they are ripped-off,
providing them with documentation and a summary of
these mail order scams.
Use wisdom. Get your facts straight. Have
documentation to back-up your findings and submit
them! Wouldn't it be great if everybody in the world
were honest? What a wonderful world this would be!
More Scams!
The Truth About
Offline Multi-Level Marketing Programs
Multi-level marketing is a fancy name currently being
used by some companies in an effort to do two things.
The first objective is to move products
from their warehouses, and thus increase their sales
volume. The second objective is to recruit "an army" of
commission-only sales people. Make no mistake about it!
After you've stripped all the hoopla and falderal away
from these "super money-making opportunities", the
bottom line remains the same - you make money from
commissions allowed from the sale of products.
Generally speaking, very few people have
any "real" sales experience, and thus, if offered the
opportunity to take a job as a commission-only sales
person, they'd run from it like the devil. This could
prove detrimental at times. There are many companies
that do provide great support and free training to help
you along the way.
At the same time, most commission-only
sales positions are "direct selling" opportunities. And,
the definition of direct selling begins with an
explanation of what a door-to-door sales person does.
Don't get me wrong... A lot of personal
fortunes have been amassed by commission-only sales
people... For sure, when you attempt to sell by mail,
you're almost always involved in commission selling, and
direct selling.
What I'm saying is that most people are
"duped" into joining multi-level marketing programs
without understanding that it is commission sales and at
least a form of door-to-door selling.
Worse than "duping you into joining
their programs..." There are some multi-level marketing
companies that subtly encourage you to break the law,
and run the risk of huge monetary fines, long terms in
prison, or both!
This is done by at least, "inferring"
that if you will find a number of people to duplicate
what you're doing, and in turn encourage each new
enrollee to keep the system going, everybody will get
rich!
No so, my friend! That's a
"Ponzi
Scheme", and if you don't really understand what a Ponzi
Scheme is - allow me a moment to explain: Such a scheme
is any kind of money-making opportunity where you get
paid by recruiting, enlisting or soliciting other people
to follow your lead and continue a chain of events. In
other words, you'll be paid a commission from the people
you recruit -1; form the people they recruit -2; from
the people they recruit-3; and on into infinity.
This is the "secret" impact that most
multi-level marketing companies use to induce you to buy
into their program. Such practices are illegal, and
subject to federal laws which could destroy you. So
called, bi-level marketing plans are the same thing, as
are chain letters, and people-helping people clubs.
They're all based upon the Ponzi Scheme. If you have any
doubts, take your money-making opportunity and sit down
with your local postmaster and discuss it's legality.
These things are illegal because if - as
in a dream world - they really worked, by the time one
person had attained level number five, he would have
"signed" everybody on the face of the earth with only
the first two levels receiving any of the money. There
would be nobody left for the third, fourth and fifth
levels to sell to...
Multi-level marketing companies get
around the law by stating within their by-laws that it
is strictly forbidden to promote or attempt to sell the
program by mail. Then, when the postal inspectors come
calling on the little guy, the MLM company says: He did
it - we don't do such things - here, look at our
by-laws.
The bottom line is as old as the hills:
you can do anything you want - legal or illegal - so
long as you don't get caught - but when you do get
caught, you'd better be prepared to pay the price.
Besides the terrible mess multi-level
marketing has gotten a lot of normally law-abiding &
moral people into, it has "foisted" upon these people
personality changes that many of them do not like.
To make any money selling a product or
service on a commission-only basis, you have to have the
ability to sell like the proverbial "used car salesman".
It's all hard sell, and more often than not, involves
"forcing" the prospect to buy whether it's good for him
or not.
Anyone who has ever attempted to succeed
in commission sales, knows that it takes a product in
great demand - a great deal of sales calls, advertising
and persistence - at least a little bit of failure - and
a tremendous amount of "total business moxie" to make
any money at it.
We are no way arguing or stating that
all MLM's are scams. That would be a gross
overgeneralization. We know of many that are very good
and exercise legitimate business practices that comply
with federal and state laws. Some of the best of these
companies are listed in wonderful resources listed in
this site.
Furthermore, there is nothing wrong with
commission selling - and if you're good at it, and
receive the proper training and support, you can make a
lot of money with this kind of selling - but remember
that multi-level marketing is commission based. It takes
a special kind of personality and a great company to
succeed at it.
More Scams!
Swindlers Are
Calling -Things You Should
Know About Telemarketing Fraud
Most telephone sales calls are made by legitimate
businesses offering legitimate products or services.
But wherever honest firms search for new
customers, so do swindlers. Phone fraud is a
multi-billion dollar business that involves selling
everything from bad or non-existent investments to the
peddling of misrepresented products and services.
Everyone who has a phone is a prospect; whether you
become a victim is largely up to you.
TIP-OFFS That a Caller Could be
a Crook
1 High-pressure sales tactics.
The call may not begin that way, but if
the swindler senses you're not going to be an easy sale,
he or she may shift to a hard sell. This is in contrast
to legitimate businesses, most of which respect an
individual's right to be "not interested."
High-pressure sales tactics take a
variety of forms but the common denominator is usually a
stubborn reluctance to accept "no" as an answer. Some
callers may resort to insult and argument, questioning
the prospect's intelligence or ability to make a
decision, often ending with a warning that "you're going
to be very sorry if you don't do such and such." Or,
"you'll never get rich if you don't take a chance."
2 Insistence on an immediate decision.
If it's an investment, the caller may
say something like, "the market is starting to move even
as we talk." For a product or service, the urgency pitch
may be that "there are only a few left" or "the offer is
about to expire." The bottom line is that swindlers
often insist that you should (or must) make your
decision right now. And they always give a reason.
3 The offer sounds too good to be true.
The oldest advice around is still the
best: "An offer that sounds too good to be true probably
is." Having said this, however, you should be aware that
some phone swindlers are becoming more sophisticated.
They may make statements that sound just reasonable
enough (if only barely) to keep you from hanging up. Or
they may make three or four statements you know to be
true so that when they spring the big lie for what
they're selling, you'll be more likely to believe that,
too. That's where the verbal camouflage comes in.
4 A request for your credit card number
for any purpose other than to make a purchase.
A swindler may ask you for your credit
card number -- or, in the most brash cases, several
credit card numbers -- for "identification," or
"verification" that you have won something, or merely as
an "expression of good faith" on your part. Whatever the
ploy, once a swindler has your card number it is likely
that unauthorized charges will appear on your account.
5 An offer to send someone to your home
or office to pick up the money, or some other method
such as overnight mail to get your funds more quickly.
This is likely to be part of their
"urgency" pitch. It could be an effort to avoid mail
fraud charges by bypassing postal authorities or simply
a way of getting your money before you change your mind.
6 A statement that something is "free,"
followed by a requirement that you pay for something.
While honest firms may promote free
phone offers to attract customers, the difference with
swindlers is that you generally have to pay in some way
to get whatever it is that's "free." The cost may be
labeled as a handling or shipping charge, or as payment
for an item in addition to the "prize." Whatever you
receive "free" -- if anything -- most likely will be
worth much less than what you've paid.
7 An investment that's "without risk."
Except for obligations of the U.S.
Government, all investments have some degree of risk.
And if there were any such thing as a risk-free
investment with big profits assured, the caller
certainly wouldn't have to dial through the phone book
to find investors!
8 Unwillingness to provide written
information or references (such as a bank or names of
satisfied customers in your area) that you can contact.
Swindlers generally have a long list of
reasons: "There isn't time for that," or "it's a brand
new offer and printed material isn't available yet," or
"customer references would violate someone's privacy."
Although in this day and age, customer privacy is of the utmost importance to
internet companies, so this response can actually be valid and not necessarily
an excuse.
Even with references, be cautious, some swindlers pay
off a few customers to serve as references.
The caller may also be reluctant to
answer questions by phone -- such as inquiries about the
firm or even how and where you can contact the firm. The
swindler may insist on contacting you "for your
convenience."
9 A suggestion that you should make a
purchase or investment on the basis of "trust."
Trust is a laudable trait, but it
shouldn't be dispensed indiscriminately -- certainly not
to unknown persons calling on the phone and asking that
you send them money. Even so, "trust me" is a pitch that
swindlers sometimes employ when all else fails.
10 WAYS To Avoid Becoming a
Victim
1 Don't allow yourself to be pushed into
a hurried decision.
No matter what you're told to the
contrary, the reality is that at least 99 percent of
everything that's a good deal today will still be a good
deal a week from now! And the other one percent isn't
generally worth the risk you'd be taking to find out.
There may be times when you'll want to
make a prompt decision, but those occasions shouldn't
involve an irrevocable financial commitment to purchase
a product or make an investment that you're not familiar
with from a caller that you don't know. And purchase
decisions should never be made under pressure.
2 Always request written information, by
mail, about the product, service, investment or charity
and about the organization that's offering it.
For legitimate firms, this shouldn't be
a problem. Swindlers, however, may not want to give you
time for adequate consideration, may not have written
material available, or may not want to risk a run-in
with legal or regulatory authorities by putting
fraudulent statements in writing.
Also insist on having enough time to
study any information provided before being contacted
again or agreeing to meet with anyone in person. Some
high-pressure telephone sales calls are solely for the
purpose of persuading you to meet with an even
higher-pressure sales person in your home!
3 Don't make any investment or purchase
you don't fully understand.
A beauty of the American economy is the
diversity of investment vehicles and other products
available. But it's a diversity that includes the bad as
well as the good. Unless you fully understand what you'd
be buying or investing, you can be badly burned.
Swindlers intentionally seek out individuals who don't
know what they are doing! They often attempt to flatter
prospects into thinking they are making an informed
decision.
4 Ask what state or federal agencies the
firm is regulated by and/or is required to be registered
with.
And if you get an answer, ask for a
phone number or address that you can use to contact the
agency and verify the answer yourself. If the firm says
it's not subject to any regulation, you may want to
increase your level of caution accordingly.
5 Check out the company or organization.
If you assume a firm wouldn't provide
you with information, references, or regulatory contacts
unless the information was accurate and reliable, that's
precisely what swindlers want you to assume. They know
that most people never bother to follow through. Look at
it this way: Most victims of fraud contact a regulatory
agency after they've lost their money; it's far better
to make the contact and obtain whatever information is
available while you still have your money.
6 If an investment or major purchase is
involved, request that information also be sent to your
accountant, financial advisor, banker, or attorney for
evaluation and an opinion.
Swindlers don't want you to seek a
second opinion. Their reluctance or evasiveness could be
your tip-off.
7 Ask what recourse you would have if
you make a purchase and aren't satisfied.
If there's a guarantee or refund
provision, it's best to have it in writing and be
satisfied that the business will stand behind its
guarantee before you make a final financial commitment.
8 Beware of testimonials that you may
have no way of checking out.
They may involve nothing more than
someone being paid a fee to speak well of a product or
service.
9 Don't
provide personal financial information over the phone
unless you are absolutely certain the caller has a bona
fide need to know.
That goes especially for your credit
card numbers and bank account information. The only time
you should give anyone your credit card number is if
you've decided to make a purchase and want to charge it.
If someone says they'll send a bill later but they need
your credit card number in the meantime, be cautious and
be certain you're dealing with a reputable company.
10 If necessary, hang up.
If you're simply not interested, if you
become subject to high-pressure sales tactics, if you
can't obtain the information you want or get evasive
answers, or if you hear your own better judgment
whispering that you may be making a serious mistake,
just say good-bye.
More Scams!
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