Frugal Homeschoolers,
Families:
Don't Get Taken in By Fraud, Bad Home Builders and Business
Fraudent companies target homeschoolers, who often look for supplemental income, and other frugal families, with schemes involving business opportunities. These scams entice families with promises of "paying off your mortgage," "owning your own home," and debt freedom." .
"Consumers can take steps to make sure that the business opportunity they're pursuing isn't going to cheat them out of their money. Here's how:
- Get all earnings claims in writing. Be sure the information includes the number and percentage of recent or current clients who have earned at least as much as the promoter claims. If the promoter hesitates or refuses to give the information in writing, find another business opportunity.
- Interview references provided by the promoter of the business opportunity. The FTC requires business opportunity promoters to give potential purchasers the names, addresses and phone numbers of at least 10 prior purchasers who live the closest to the potential purchaser. Talk to each prior purchaser in person, preferably where their business operates. This may help reduce your risk of being mislead by "shills."
- Study the business opportunity's franchise disclosure document. Under the FTC Franchise Rule, most business opportunity promoters are required to provide this document to potential purchasers. It includes information about the company, including whether it has faced any lawsuits from prior purchasers or lawsuits alleging fraud.
- Contact the attorney general's office, state or county consumer protection agency and Better Business Bureau in the area in which the business opportunity promoter is based and where you live. Ask whether there's a history of unresolved complaints. Remember that a complaint record may indicate questionable business practices, but a lack of complaints doesn't necessarily mean the promoter and the business opportunity are without problems. Unscrupulous dealers often change names and locations to hide a history of complaints.
- If the business opportunity involves selling products from well-known companies, call the legal department of the company whose merchandise is being promoted. Find out whether the business opportunity and its promoter are affiliated with the company. Ask whether the company has ever threatened trademark action against the business opportunity promoter.
- Consult an attorney, accountant or other business advisor before you put any money down or sign any papers. Entering into a business opportunity can be costly, so it's best to have an expert check out the contract first. If the business opportunity promoter requires a deposit, ask your attorney to establish an escrow account where the deposit can be maintained by a third party until a deal is made.
Take the time to complete each of these steps. Promoters of fraudulent business opportunities are likely to apply high-pressure sales tactics to get you to buy in. If it's a legitimate business opportunity, it'll still be around when you're ready to decide."--Federal Trade Commission
For more information, visit the
Federal Trade Commission web site.
"Write-to-Congress"
http://capwiz.com/sicminc/dbq/stickers/?command=fedstickers
Have you been scammed by a fraudulent home building scheme or panelized home builder? Do you have a "bad house?" Consumers can file a complaint through HADD, Home Owners Against Defective Dwellings.
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