Online Business Opportunity Scams

We've all heard about "too good to be true" business opportunities. And that's usually exactly what they represent - an opportunity long on promises and short on results.

While the internet has given us many amazing things, it's also made scammers' jobs vastly easier. Where once pitching a business opportunity required a phone call, a personal visit, or a letter, today's fraudsters can mass produce e-mails, social media posts, text messages, and all other sorts of digital communications. Technology has allowed them to cast a much wider net, which is entangling a growing number of victims.

With that in mind, let's discuss some common fraudulent online business opportunities and steps you can take to avoid getting hooked.

The "Work From Home" and Similar Scams

In recent years, there has been a significant shift toward a new model of employment for many workers. It's sometimes called "the gig economy," "contingent employment," or just plain old "freelancing." In addition, in the wake of the Covid pandemic, more and more traditional employees work from home. Suddenly, the idea of making real money without working in an office from nine to five every day makes a lot of sense.

Because of these structural economic changes, there's a large market for seemingly legitimate business opportunities focused on stay-at-home work. The idea of running a business from home has become far more plausible, thanks to technological advances and new apps offering "on-demand" services. Unfortunately, scam artists have seized this opportunity, and the internet is rife with bogus work-from-home and related business arrangements.

Some of these "great moneymaking opportunities" require upfront payment before getting started. A classic variety is the home-based medical coding business. Typically, victims are told they can earn significant money by learning how to process medical bills at home, and little to no experience is required. A more recent example is drop shipping, which involves selling items through platforms like Amazon without physically managing inventory.

After paying inflated prices for software or training, however, many people discover that very little work is available or the products they attempt to sell are never bought. The Federal Trade Commission has levied charges against several online medical coding promoters for misrepresenting potential earnings and other dishonest practices.

But when one scam is shut down, others take its place. "Internet-based business," where victims are told they can make hundreds of dollars daily by filling out forms, writing reviews, or doing other tasks that require no formal training or credential. These "opportunities" are often a disguised effort to swipe your credit or debit card information.

Other online business scams include mystery shopping, rebate processing, and material assembly. All usually promise significant financial rewards for relatively easy labor, and most are designed to prey upon the most financially insecure people, which makes them all the more devious.

Spotting the Scams

Awareness of these warning signs can help you steer clear of potential scams:

• Promises of unrealistic earnings or guaranteed success.
• High-pressure tactics urging immediate investment.
• Requests for substantial upfront payments.
• Vague or overly complex business model descriptions.
• Overreliance on testimonials without verifiable details.
• Claims of exclusive, insider knowledge.

Protecting yourself from scams requires thorough investigation and a skeptical mindset:

• Research Extensively - Look up the company or offer online using terms like "scam," "review," or "complaint."
• Verify with Authorities - Check with the Better Business Bureau, Federal Trade Commission, or local consumer protection agencies.
• Be Skeptical of Extraordinary Claims - It likely is if it sounds too good to be true.
• Take Time to Decide:- Avoid making hasty decisions; consult with trusted advisors or mentors.
• Safeguard Personal Information - Be cautious about sharing sensitive data like social security numbers or banking details.
• Understand the Business Model - Ensure you can clearly explain how the business generates profit. If it's unclear, there is likely a risk.

If you find an opportunity that seems to check out, ask questions such as:

• Am I paid on salary or commission?
• When will I be paid?
• How will I be paid?
• What are the total costs involved?
• Can you show me proof that your earnings claims are accurate?

If you can't get solid answers to the questions above, you're better off walking away. Odds are you'll save yourself money - and plenty of heartache.

Legitimate Online Opportunities

While it's crucial to be wary of scams, genuine online business opportunities do exist and require legitimate skills, effort, and perseverance:

• Freelancing - Writing, graphic design, or web development skills can lead to sustainable freelance careers.
• E-commerce - Selling products through established platforms like Amazon or Etsy.
• Content Creation - Generating income through blogs, YouTube channels, or podcasts.
• Online Tutoring or Coaching - Sharing expertise in a particular field through virtual teaching.

These legitimate avenues demand real work and provide sustainable income without false promises of overnight success.

The Takeaway

The internet has democratized entrepreneurship, offering unprecedented opportunities for those willing to put in the work. However, it has also provided scammers with powerful tools to deceive and defraud. Remember, true success in business - online or offline - rarely comes easily or overnight.