Business flopportunity

There was a twisted kind of accuracy in one of the company names used by a Phoenix-based outfit that peddled business opportunities. It was called “Building Money” and build it they did. The problem was that they built it for themselves – and not for the older consumers, military veterans, and folks on fixed incomes the FTC says they bilked out of millions of dollars.

The scheme usually started with outbound telemarketing calls offering people the chance to buy or invest in e-commerce websites or sites that directed traffic to major online retailers. Pitching the program as “risk-free” or backed by a “100% money back guarantee,” fast-talking salespeople claimed that consumers would make a substantial return on their investment.

Once buyers’ hefty checks were cashed, the defendants followed up with a glossy packet in the mail. Then came the phone calls asking for additional money and promises that investing more would yield greater returns. The FTC says the defendants even offered to help cash-strapped consumers move their credit card balances to cards that offered low- or zero-interest rates – balances the defendants claimed the consumers could pay in full when they started realizing investment income. The defendants continued to string victims along with bogus updates about the status of their “accounts,” which were supposed to be paid at the end of the quarter.

But the quarter came and went without people seeing the promised returns. When buyers grew suspicious, the FTC says the defendants went into the bizopp equivalent of the four-corners delay. First came the excuses. Then the stall tactics to dissuade consumers from contacting their credit card companies. Next was evasion – including name changes, moves, and the use of mail-forwarding services to disguise their location. Followed by radio silence.

The complaint charged nine individual and corporate defendants with making deceptive earnings and money-back guarantee claims and violating the Telemarketing Sales Rule. According to the FTC, many of the initial cold calls were illegally placed to numbers on the Do Not Call Registry.

The stipulated final order imposes a $25 million judgment, which will be partially suspended upon the surrender of assets totaling $7.5 million. The order bans the defendants from telemarketing or assisting others engaged in telemarketing. The order also puts a lifetime kibosh on marketing or selling investment opportunities.

Our advice for companies that sell scam bizopps like this is pithy: Don’t.

Our advice for people looking to supplement their income is to learn more about tactics favored by business opportunity scammers. And before investing so much as one thin dime, discuss the possible investment with trusted friends or colleagues who meet two criteria:  1) They have a proven head for business; and 2) They have no connection whatsoever with the outfit pitching the bizopp.

 

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