A scam is a fraudulent attempt to make money, and the term online business scam is used to describe three different types of ventures that use the Internet, or online environment, in their attempts to swindle people. First, an online business scam can refer to a non-existent business: a front. Second, it can refer to a firm that sells products or services that exist, but do not live up to their description. And third, it can refer to fraudulent businesses such as those built on pyramid schemes, which has become closely associated with Multi-Level Marketing (MLM), also known as network marketing. Following a few steps carefully can help you detect and avoid getting involved in an online business scam.
One way that an online business scam is presented is through a job offer, so when looking at offers of employment, there are several things to look out for. One is an email address that is provided by a free service, rather than one that is attached to a company’s online website and branding. A second is failure to clearly identify the company that is hiring and provide contact information and a corporate website address. A third is poor grammar or nonstandard phrasing. Online job offers that sound too good to be true are probably online business scams, and it is safe to assume that any promise of enormous sums of money and short hours for people with no experience, training, or special skills is a scam.
An online business scam can also be presented through an advertisement for a product or service that is not as advertised. Glowing testimonials from people who are only identified by first name is one sign. Huge amounts of product or service for a special low offer or a limited time greatly reduced price are another. If you’re not sure, use a search engine to try to find independent product reviews. Find out about any guarantees, and if you still decide to buy, use a payment method from a company that will support you and cancel the payment if the product is not as advertised or is never delivered at all.
Pyramid schemes are a type of online business scam that may look legitimate in many ways. When a multi-level marketing plan masks a pyramid scheme, the Federal Trade Commission (FTC) advises to check in several ways. First, be on the lookout for offers in which you make money mainly from recruitment and sales to your recruits rather than sales to end customers. Check the company information and the product thoroughly. Research outsiders’ takes on the product and company, paying particular attention to any lawsuits. Gather information from insiders and make sure you understand any restrictions and any charges that can be made to you.