The advertisements are enticing: Earn between $60,000-$80,000 a year investing in DVD movie rental vending machines! Earn $500 per week doing medial billing; we provide the training! Honest, serious home workers can make up to $800 per week for assembling products at home, with NO SPECIAL SKILLS REQUIRED! Join our Web-broker program and earn substantial commissions as we team you up with Fortune 500 companies!

These and other business opportunity ads may trumpet "be your own boss," "set your own hours," "work from home," and "earn money quickly," but the Federal Trade Commission and Better Business Bureau know that the end result is substantial consumer injury. BBBs process 10,000 complaints each year from consumers who states they were misled by or lost money to such promotions. In a recent major business opportunity assault launched by the FTC, the 200 defendants caused tens of thousands of consumers to lose a total of more than $100 million.

Before investing in any "biz opp," the FTC and BBB suggest that consumers:

• Look at the ad carefully. If you are being promised lots of money for little time, little work and little experience, there is little chance that the ad is legitimate! If it claims buyers can earn a certain income, it also must give the number and percentage of previous purchasers who achieved the earnings. If an earnings claim is there - but the additional information is not - the business opportunity seller is probably violating the law.

• Get earnings claims in writing. If the business opportunity costs $500 or more, then the promoter must back up the earnings claim in a written document. It should include the earnings claim, as well as the number and percentage of recent clients who have earned at least as much as the promoter suggested. If it is a work-at-home or other business opportunity that involves an investment of under $500, ask the promoter to put the earnings information in writing.

• Scrutinize franchise offers. If the business opportunity is a franchise, study the disclosure document. Look for a statement about previous purchasers. If the document says there are no previous purchasers but the seller offers a list of references, be careful: the references probably are fake.

• Interview each previous purchaser or investor. Do so in person, preferably where their business operates. Beware of paid "shills." The FTC requires business opportunity promoters to give potential purchasers the names, addresses and phone numbers of at least 10 previous purchasers who live the closest to the potential purchaser. Interviewing previous purchasers helps to reduce the risk of being misled by phony references.

• Check on complaint records. Contact the attorney general's office, state or county consumer protection agency and BBB -- both where the business opportunity promoter is based and where you live to find out whether there is any record of unresolved complaints.

• Is a well-known company involved? If the business opportunity involves selling products from well-known companies, call the legal department of the company whose merchandise would be 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 promoter.

• Consult experts. Talk to an attorney, accountant or other business advisor before you make the deal.

• Take your time! Promoters of fraudulent business opportunities often use high-pressure sales tactics. But, if the business opportunity is legitimate, it will still be around when you are ready to decide.

© 2005 Council of Better Business Bureaus, Inc.

In tough economic times, consumers often look for ways to supplement their income. The Better Business Bureau warns consumers about help wanted ads that promise large profits for little effort servicing automatic vending machines or display racks. This may sound like an easy way to make big bucks, but be cautious! Although some business opportunities that offer servicing vending machines or display racks are legitimate, many are not. Potential investors should get all the facts or they may end up being short changed.

Although some ads convey the impression that the advertiser is offering a job, the actual propose is to sell equipment and merchandise. Many advertisements fail to disclose that vending machines are even involved in the offer. They mention vague generalizations about an "opening" or a "money-making opportunity" rather than disclose that the proposition is for the outright sale of machines for which the purchaser assumes full responsibility.

People responding to such ads usually receive by mail, email or telephone, invitations to meet a representative of the company. At the meeting, a salesperson will paint a glowing picture of the profits that can be made, and typically, the salesperson will apply pressure for a quick decision to prevent a careful study of the offer.

The following are some common tactics fraudulent promoters might use:

• Inflated profit projections, including elaborate charts that may have no basis in fact.
• Locator services, in which the company claims to employ an expert locator to find prime locations for its machines. The service usually ends once any establishment willing to have a machine on its premises is found, regardless of how many potential customers that area attracts.
• Training programs that are generally superficial or non-existent. And it should be noted that it is impossible to learn to be a successful vending operator in one or two weeks from an out-of-town salesperson.
• "Good deals" on machines, which may turn out to be machines sold for two to three times their actual value. Potential investors should be wary of buying any machine that they cannot look at in person since catalog pictures and descriptions may not tell the whole story.
• Repurchase plans, in which vending promoters offer to buy back inventory from the investor. Unfortunately, the promoter is usually long gone by the time an investor tries to exercise this option.
• Guarantees offered by sales agents often are worthless because the agent cannot be located and the manufacturer will not honor them.

Before investing your money in a business opportunity, check the company out with the BBB. And, keep in mind that promoters of fraudulent business opportunities are likely to use high-pressured sales tactics to get you to buy. If the business opportunity is legitimate, it will still be around when you are ready to decide.
8/8/2002

© 2002 Council of Better Business Bureaus, Inc.