$2000.00 plus Your Dignity

Today’s Popular Business Opportunity Scams



Mentoring. Anyone who is anyone either has a mentor or is a mentor. To mentor or be mentored is to enrich yourself through the reciprocal value created by freely sharing experience. Like the best teachers, the best mentors will tell you that they learn the most from their students. Currently there are just dozens of mentors lining the want ads in search of minds to meld with.

And who wouldn’t want to be associated with a dynamic, multi million dollar entrepreneurial mind? Teamed up, both of your situations will certainly advance to new levels, provided mutual respect is brought to the table. Let the adventure commence!

On the other hand, how would you like to spend some up close quality time with a career professional criminal? Accidentally networking a crook when you were fishing for a guru can leave you on the hook for more than you can imagine.

Welcome to the world of the Business Opportunity Scam, a place where buzzwords are appropriated and situations simulated. Gone are the envelope stuffers, credit repair trainers, property flippers, mystery shopping work at home agencies and vitamin sleep diet loss artists. 'Gurus' still running these ads have probably recently cycled out of the joint. In any case, those scams are no longer up to date, having either bit the dust of overexposure or migrated beyond the printed word to that great bad idea graveyard of late night cable infomercials--which is the subject for another day.

Also a subject for another day is Multi-Level Marketing. All MLM are Biz Op Scams, but they are Ponzi Schemes. These have a different mechanism than the frauds we will be dealing with. Like MLM, most Biz Op Scams can be found parading their wares in the help wanted sections of Craigslist, Net Boards or even your local paper. Unlike MLM, most are not apparently listed under either sales or marketing.

It would be nice if there were a method for spotting them just from the wording of the ads. But that would ruin everyone’s fun! Many are flat out crib jobs taken from the pitches of honest entities. Picking them out is more a matter of knowing what subject the disreputable pack has pounced on, rather than their particular presentation. It is in this that I intend to help.

There are few real clues as to the illegitimate orientation of an enterprise to be found from their original contact. As with the ads themselves, the phone calls and emails are often copied from those used by standard businesses. They do have a tendency to be a tad pushy, to state in bombastic terms how special both you and they are and to push for an immediate meeting, No matter what the business’s true nature is, it is suggested that you simply shy away from firms that do this. There are few opportunities of this type which won’t come around again--and it is in everyone’s interest that you be deliberate in your commitments. Anyone who stresses otherwise should either get over themselves or get over you.

It is up close and personal that most Biz Scam Operators fall down. At this point you are already out time, car fare and mileage on the wearing of your best duds. Beware of any group meeting in a hotel. Keep in mind that most of the people in the audience of such are likely to be already on the payroll, no matter how they present themselves. Should you have the chance to meet at the Biz Scam Operator’s actual place of business, there are a few key details to watch for. The receptionist will tell you absolutely nothing and seems to be constantly on the phone, but never forwarding calls. All of the magazines are at least a season out of date and are subscription copies with the address stickers cut out of their covers.When you do meet with the very well dressed hiring manager, he seems to be just a tad too young for someone with such an exalted title. For bonus points, this person is showing a tattoo. For double bonus points, it’s on his face. Should you encounter all of the above, just walk away. You are missing out on nothing.

But not all Biz Scams are set up the same way. They are as individual as fingerprints. All will be run by people who do not seem to be what they report to be, if you look closely enough. Using a bum rush and capitalizing on the applicant’s desperation are common distractions employed to keep potential targets from making a thought out choice.

Most Biz Scams are out to take you for $2000.00 and occupy up to six weeks of your time.Although you might be worth considerably more than this, the plan is set up with the idea that everyone has $2000.00. This is a retail confidence game--and you will take your fleecing off the rack, thank you. As for the six week time limitation, it has little to do with fear of exposure, but rather that if they haven’t taken your money by that time, chances are they never will. Clearly it is someone else who holds the purse. (Your spouse, in most cases.) The last thing they want to be running is adult daycare.

(This is not always the case. Many scams are specifically looking for people whose significant others simply want them to have a job--any job. These people can be golden to the Biz Scam operator.)

Unlike MLM, the Biz Scam operator is not interested in recruiting your family or having you get a loan from friends. They want nothing between them and their target. They want to take you for your two grand, teach you your lesson and send you on your merry way.Family and friends coming after them with pitchforks is just not on the agenda.

All Biz Op Scams have one or more of three flaws which will prevent you from ever making a clean dime off of them. These flaws are…

#1. That Ship Has Sailed. The business idea was good at one time, but conditions have changed. There are undisclosed barriers to succeeding in the business. For example, on its surface baking seems like a fairly good business. All you need is some sugar, flour, eggs, an oven and a little want to. And if baking was a Biz Op Scam, that’s just the way it would be sold. (More commonly, the Biz Op Scam pitch would be ‘All you need is what you can find in your home and some free time.’) Unfortunately, the baking business is one of the most competitive in the world, with success generally a matter of focusing on the capital intensive service end of the operation. Having the recipe to one heck of a scrumptious chocolate cookie is nice, but it isn’t 1/10th of what’s really involved. Given that most Biz Op Scams are targeted at people who would like to run a business of their own, but aren’t sure what to do, many will seem to offer the cookie recipe for free. In fact “cookie cutter” is one of their favorite lines. This is because the scam is out to sell you on…

#2. Endless Marketing. This is actually where most Biz Op Scams make money for their operator. Having given you the cookie recipe for free and generously pointed you in the direction of your own oven, the operator would now like to sell you a list of people who might want your cookie. It’s leads. It’s reports. It’s special data. And the more of it you use (buy), the faster you will succeed. In the computer age, much of this is special websites with specific, hidden and extra secret information just for you. It can also be the right to use the company’s brand name or its billing service or to operate under its licenses. Whatever it is, it has to do double duty convincing you that there is some reason you can’t go into the company’s business for yourself. Many times this is nothing more than a fiction, but it is a good one. It has to be good, since it is the only product actually being sold. Once you have made your “token” payment into “the system” you are primed and ready for some good, old fashioned…

#3. Schlepping. It’s making cold calls from your own personal phone. It’s mandatory attendance on a conference call or a meeting once a week. It’s printing out a letter on goldenrod paper with you and your spouse’s name on it and sticking such under wiper blades. It’s sticking signs on the parkway. It’s hauling yourself and some miserable crap from one place to another. And all of it is done without any compensation whatsoever and at very real expense. Your dignity not included.

For the majority of businesses, mere distribution of the product or service is the single largest expense. The expense of this is probably the undisclosed barrier which keeps whatever the Biz Op Scam is from being viable as a real enterprise in the first place. If they can get the distribution service for free, then they can pretty much sell anything. It is this 'fact' that has inspired many a Biz Scam operator to set up shop on even the most flimsy of excuses.

Not all Biz Scams are obvious. In the good ones, there is a boomerang action for the fleecing mechanism. You won’t know how you have been taken until you are hit in the back of the head. I have also taken the liberty of describing the worst possible case scenario. Keep in mind that the Biz Scams are constantly mutating, as changeable as underwear. The current criminal fashions this season include…

Collecting on Judgments

The Pitch: Did you know that over 90% of all judgments in civil lawsuits go uncollected? Currently this multi billion dollar market has been untapped. Thanks to our powerful new tools, you can help people get the money that is owed them—and a hefty percentage for yourself.

This one is so nice that it comes in two flavors. The most common pitch states that you can do all of this from the comfort of your own home, providing that you have access to a computer and the internet. You never have to meet these people. You just fill out some paperwork and collect the money.

Of course, if any of that were true, the entirety of the collections industry would evaporate overnight. We can start with the obvious problem: They already sued the guy and he didn’t pay. He’s been called (and called), served, processed and judged. There’s a real good chance he’s worthless—as in, he has no attachable assets. The Biz Op Scam operator will tell you that you can attach his wages. Unfortunately, that’s not as clean of a deal as it seems. Not that the operator will tell you this.

He also forgot to tell you: that 90% statistic is deceptive. Most of those judgments were uncontested. In short, the guy didn’t even show up for court. In some jurisdictions he may have been served via publication, which means he may not even know that he is being sued. (This may seem like a good thing, as far you are concerned, but it is really not.) Finally, your judgment may be worthless if he has moved outside of the court’s jurisdiction. In that case, you have to go back into court to domesticate your judgment in the place where the subject lives. Good luck getting a lawyer to handle this on spec, if you can find one to handle it at all. (The expense of such runs from $200.00 to $600.00 and may be more if the attorney has to make multiple appearances.) And by the way, no part of this will be anonymous. If your subject does show up for court, he will be given your name and address.

Kinda icky, huh? Hope he isn’t the type that holds a grudge.

In some states your subject may be bullet-proof, meaning that his wages simply cannot be garnished. This doesn’t cancel your judgment. It just puts you back at square one, with your subject having to volunteer to pay you money. Mind you, your subject has already probably been offered settlement terms which he has rejected.

On the offhand chance that everything goes exactly as advertised, there is the sticky matter of how your compensation comes in. You get a percentage of what the subject actually pays. Ifthe enforcement is a garnishment, you will get dribs and drabs of what is collected out of his paycheck. If the enforcement is a lien on real property, you will only get paid if and when the property is sold. But don’t worry about this. You will never get this far.

Chances are, you will never find the guy. This is the part that’s supposed to be sooo easy, thanks to the wonderful reports the Biz Op Scammer is willing to sell you. These reports vary in price, with the more effective ones costing progressively more. Such are often called Credit Checks, Social Traces or proprietary systems with fanciful names such as Choice Data or Fast Point. The more it costs, the more information is printed out. At least visually it seems like you are getting something.

Unfortunately for you, none of these reports are worth anything. These various systems are quite useful when initially making a credit decision, but become dated and vague the moment the subject is no longer credit worthy. You’re actually better off using public sources of information (even Google), than you are usingwhatever it is the Scammer is selling. Even on those rare occasions when the information provided by these pricey reports is timely, it requires skill and talent to pick the good bits out. Which brings me to another flaw in this scheme…

It’s not legal. At all. As a third party, you cannot just go randomly ordering up someone’s personal information. In most states only a collection agency, credit granting party, private investigator or lawyer can obtain these reports in the first place—and even then, their access is restricted. Your Biz Scam operator is none of the above. All he really has going for him is access to an ‘IB’ (information broker) whose services he is offering at a considerable mark up.

The hook in this scam is that you blow off the idea of collecting judgments and become addicted to ordering reports. In the back of your head you are entertaining the idea of becoming a private eye. Or finding an ex who owes you money. Or looking up stuff about that blow hard in-law of yours. Pretty soon you are investigating everybody. What was a potential way of making money quickly becomes a snooping hobby. Believe it or not, that’s exactly what our Biz Scam operator wants. You think you’re being Secret Squirrel, but you are just another junkie. Like any junkie, there will come a point wherein the Biz Scam operator will threaten to cut you off unless you agree to order x number of reports a month or help him in some way with his marketing. It’s a sneaky payoff. This is where most marks wind up.

By the way, as a secondary hazard of this scam, you could wind up doing federal time for violating your subject’s 4th Amendment Rights. A truly black hearted Biz Scam operator may mention this as a way of leveraging you to stay within his organization. And he knows everyone you have ordered a report on. I’ll bet you didn’t sign up for that.

The second flavor of this scam is taking advantage of the recent publicity about alternative arbitration. The pitch goes that the courts are so jammed with cases that many firms are seeking an alternative to the judicial system. And that’s where you come in! After a little training, most of which involves mandatory participation in conference calls, you will be set up in your own business representing persons who are in arbitration. Your payoff is some percentage of the difference between what your client actually owes and what you agree to settle for on his behalf.

If you think these conference calls are about teaching you how to represent people in such actions, you would be wrong. The calls are all about how to prospect for people who are in arbitration. The firms who use alternative arbitration are well known. Your mission is to find someone they have an adversarial action against.

It’s really all want to. If you do enough prospecting, you will find someone who is involved in this process. Moreover, he will probably be more than happy to allow you to represent him for free, the prospect of you reducing his indebtedness notwithstanding.

Let's say you found one. You get in your suit. You go to the prep meeting. Weirdly, at the prep meeting “Your Sponsor” or the Biz Scam operator seem to be more focused on lowering your expectations than they are in preparing any sort of strategy. Undaunted, you go off to the arbitration session.

You are laughed at. The person to whom the amount is owed does not budge an inch or even seem to think about it. The arbitrator, after explaining to you that all he is empowered to do is choose between two amounts, finds against your client. You go back to the office. After a brief ‘best of luck next time’ session, you go back to prospecting.

What you didn’t know: People who are bound into the arbitration process did so as a condition of sale. Your client is likely a vendor of some sort. If he didn’t agree to this, he doesn’t make the sale. He has no real leverage at all and knows it. In fact, the only party in the arbitration room who thought he did have any leverage, was you.

You didn’t know it, but you have been ambulance chasing. A short time after you seemingly blew your arbitration session, your client was contacted by a sure as shooting dyed in the wool no doubt about it lawyer, one who specializes in getting people out of the arbitration process. Thanks to your efforts, the lawyer has been presented with a client who has a substantial action, the ability to pay (his legal fees, at least) and who has already lost in the process. A finder’s fee is paid to the Biz Scam operator and the lawyer is off to the races. As for you, you go back to making phone calls, no doubt renewed in your efforts having come so tantalizingly close to success on your first, second or third time out of the gate. Don’t worry. They will let you make phone calls for as long as you want to.

Own Your Own Financial Services Firm

The selling of investments andinsurance is, even on its best day, a crap shoot. Legitimate firms are likely to emulate the same tactics as ones that are not so on the up and up. Given that the stock gurus and advisers of old have all proven no better at picking a horse than your Magic Eightball, perhaps the validity of the entire investment industry can be brought into question. In a world dominated by self service internet insurance sites, walk up brokerages and $8.00 an hour bank clerks selling investment vehicles, the ship on this business has not only sailed, but it has circumnavigated the globe. Those who still cling to their insurance man or full service broker today do so out of personal loyalty, inertia or ignorance. Such people are at the margins of the market, in any case.

In the best of circumstances, operating within a legitimate organization, with free downtown office space and free phone use, the odds of your being able to make a decent living in this field is grossly stacked against you--even if you are speaking for a firm with a well known TV spot. It is endless schlepping. You will be thrown into the deep end of the pool. If you swim, great. If you drown, so did the last guy. The margins for the business segment as a whole are so thin that the firms involved cannot invest in much more than a continual recruiting campaign.

It is this industry-wide continual recruiting campaign that has provided cover for the not legitimate operators. These people are not at all involved in the business of selling insurance or investments. What they are doing is the old envelope stuffing scam—getting you to buy capital equipment.

Telling the legitimate from the illegitimate is my objective here. Many of the scam artists in this industry have attached themselves to some old line names, specifically ones known for being in the credit card industry. If you are introduced to a thirty year old 'regional director' for such, just walk away. A look at his business license or incorporation papers will reveal that he is simply an independent contractor making rental payments on the name brand. The firms involved in this should be ashamed of themselves.

Another clue is if the firm involved used to be a non for profit beneficial fund which has recently decided to open up it services to the general public. They used to only sell to carpet installers, but now they sell to everyone. Quick research may show that the entity previously with this name has become non-liquid, subsumed or integrated. All of those are code words meaning that this is an entirely new entity parading under an old name. When in doubt, check the parent firm’s bond rating. In the investment and insurance business, anything less than AA is garbage.

(AAA is perfect. AA+ is average for a going entity. AA is solvent. AA- is junk. A is near insolvent. B and C are de-listed, somewhere around 5 to 1 against ever being able to pay off obligations.)

The big, sure fire clue that this is a scam is: being told not to sell insurance or investments. No! Not for you! You’re too good for that! You’re management material! The firm with the impressive name is quite ready to set you up in your own office. There may, in the future, be some special business to business sales of the scale to merit the attention of a person of your caliber, but for the most part your job will be recruiting people. Grab your hat and coat and the Biz Op Scammer will take you in his Mercedes to your new office.

Nice office, too. It’s in a little strip mall. The office is a little slim. The firm’s very impressive name is already on the sign. There’s your phone. There’s your fax. There’s your photocopier. There’s your computer. All it needs is you and the magic happens.

You do understand that ‘very impressive’ firm has a reputation to maintain. For that reason you can only make calls from their phone, use their computer and order all materials through the home office.

Very impressive firm is taking a big chance on you here. A little participation on your part is to be expected. What is a dream worth?

Blink and you are out two grand.

By the way, that’s all the guy wants. Anything else he gets from you is gravy.

Now he’s gone off to get your business cards and stationary printed up. A box of sales materials will arrive in a day or so. In the mean time, you hit them phones.

As it should turn out, your office is secretly coin operated. Everything you do, making calls, using the computer, sending a fax, is charged against your two thousand dollar goodwill deposit. This is on top of the marked up rent, marketing fees and office materials. By the end of the month, you might as well have rented the Taj Mahal as opposed to a fourteen foot wide space which vaguely smells of stale pizza and gin.

This is the entirety of the con. Everything else is a distraction, eyewash. As for what you are supposed to be doing, you are hitting up job boards on the internet, making calls to prospects and sending off emails telling so and so how you are the regional director for ‘impressive’ and that you would like to arrange for an interview in your office. Does anyone ever show up? That’s sort of besides the point. Should you actually hire a commission salesman and, glory be, he sells a policy, you will get a fantastic override. In theory.

In the more sophisticated version of this scam, our Biz Op guy is running an employment agency on the side. The guys you hire go to the home office and are never seen again. Mostly, however, I have detailed the scam as the worst possible case scenario. (To be honest, just having you continue to recruit, recruit, recruit on the mere promise of possible overrides on possible sales from possible agents is scam enough.) On the much lower end of the scale, the Biz Op Scam artist actually has no relationship whatsoever with ‘impressive’ other than the keys to one of its former offices.

Just as you have gotten into the groove of sending out emails, making calls and perhaps even interviewing a few chumps, you get a phone call from the boss. He needs to see you at the home office right away. Once you are there, he tells you confidentially that he has come into possession of a group of special leads. Big time business to business stuff. Doctors, you know. Problem is, he’s a little over budget, otherwise he would just give them to you. If you want them, he’ll have to charge it against this month’s goodwill deposit. Or he can give it to someone else. He’s just giving you first crack.

You take it. You have now exhausted your deposit plus a couple of hundred bucks, but you don’t say anything.

The list gets you nothing. Not squat. Not a nibble. Suddenly, the boss is ticked at you. He shows up in your office and starts ranting. He’s using four letter words. He’s insulting your manhood. Why did he take a chance on someone like you! He knew you were a loser to begin with! He’s foaming at the mouth. And if that doesn’t work, he starts throwing things. Just when it seems that he is about to get violent, he screams “Get the hell out of here!”

What did you do?

Nothing. This is a short con. He needs the office empty again.

Book Sales Agency

I don’t know when it became acceptable to sell stuff to your fellow employees at work. I want to blame the kids, or, more accurately the teachers, coaches and band directors who have allowed themselves to be marketed into using their charges as sales agents. Today it seems every student who wishes to do more than breathe in a chair will be sent on three sales campaigns a year, each under the banner of fund raising.

One wonders who snorted our tax money--or where it was that the student’s mandatory activity fee went to? Somewhere I suspect there is a gnome sitting on a big pile of cash, having a nifty laugh at us all. Until this being can be found, I fear over sized, over priced, brand x chocolates will be in our immediate future.

Once we became acclimated to bon bons being shoved in our faces and signing up to sponsor someone’s walk to cure the disease of the week--or other silly human tricks--at work, the Book Sales Agents started to appear. Originally their cover was fund raising for the great corporate charity or some local group. Eventually they started appearing bearing well known publishing names and offering seasonal or close out items.

They weren’t really selling books. Books have words in them. Instead they were selling thick paper bricks with pretty pictures and noise makers inside. Or a knife which doubles as a watch. I have to confess that I always bought something from these people. If you are the type of Christmas shopper I am, the idea of this stuff coming to your place of work was a real pleasure and time saver.

It was also a fairly good deal for the Sales Agent. The appointments were made for him by his firm. The merchandise was provided entirely on speculation. Also provided for him were the display racks and the cash register. All the agent had to do was provide transportation and the labor for set up and sales. In return, the agent would receive roughly fifty percent of the profit on each sale.

Just because it is a lot of schlepping or even part work, does not make an enterprise a scam. As it was initially constituted, the sales agent had ownership of his route. A nice living could be made making the circuit from one business to another. And it was fun and social. Not a bad deal at all for working mothers or other people who had a few hours free during the day.

Unfortunately, it is one of those businesses which became a very hot item very quickly. Several well funded, respected publishing houses all jumped into the industry full bore, all at the same time. They did such a deft job of cutting each other throats, that they all got out of it at the same time. Upon exiting the field, they left their name brands in the hands of independent operators who have proven to be far less scrupulous. Like many ideas which have seen their day come and go, much of it trickles into the hands of the Biz Scam operators.

Like Biz Scam Operators everywhere, the pitch is owning your own business. In this case, it is a sales route. The most common abuse in this industry is sending agents out only to unproven areas. If the location turns out to be good, the agent will never be sent there again. Instead, the Biz Op Scammer will send his own crew. The term for this is the “Mystery Tour” and you don’t want to be on it.

Petty nickel and dime-ing of the agent is also rampant. Included in the Biz Op’s arsenal of scams is charging access fees per credit card purchase or personal check verification and making the agent liable for credit card charge backs or shrinkage. No legitimate firm in this business (if there are any left) should do any of that. Do not let anyone tell you that this is a typical practice. It is not. It is the sign of a scam.

In the end, having someone control where you go as well as the credit card portion of your revenue completely negates any claim to your being independent. As it stands, you would be better off going into this business thoroughly on your own. Keep in mind that the person running this business is getting most of his merchandise on speculation. All he really has going for him is warehouse space. You will probably be out the same amount of money operating on your own as you would doing it his way.

Do not feel stupid or particularly put upon if you fall victim to a Biz Op Scam. They are not there to fool the fools. Biz Op Scams are run because they work. And they are refined constantly.

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Until next time,