Spotting Home-Based Business Scamsby
The website selling home-based business opportunities looks like a professional news outlet, with a stock market ticker, video footage, and a list of reader comments—complete with typos. But it’s really baloney. That ticker? An animation. The news footage? An unrelated, pirated television clip. And the testimonials? Internet-fraud expert Christine Durst calls them “testiphony-als”—all posted under fake names within a few days’ time, by crooks aiming to snare prospective entrepreneurs.
As the recovery plods along, many people who have lost jobs or are looking to supplement downsized income are likely to come across such websites offering big money for little work and no particular expertise. No one knows exactly how many will be duped, but given the explosion of faux news sites during the past year, the returns must be good, says Durst, chief executive officer of Staffcentrix, a Woodstock, (Conn.)-based company that has been designing career training programs for government and nonprofit agencies since 2001. She estimates hundreds of such sites, many pirating content from each other, exist online at any one time.
“Scammers rely on spam, paid ads, and posts to forums to drive traffic to their sites in huge numbers and in a short period of time,” Durst says. “This is important to them since, once word gets out that they are a scam, they will have to shut the site down. Big, fast traffic ensures their success.” Many sites are highly sophisticated, using tracking software to detect where visitors are and then serving up “success stories” purporting to be from that visitor’s location. They can also track repeat visitors and see what sites they come from and where they go, the better to electronically sniff out sleuths like Durst.
Last week she found a work-at-home site and started researching it. “I left their site to visit sites that would lead a trained eye to believe someone was investigating them,” she recalls. When she went back to the original website about 10 minutes later, it was gone. “They are very quick to hide, like cockroaches in the light.” When Durst checked again a few days later, the site had reappeared. “I guess they thought they shook me off. People really have no idea how sophisticated these people have gotten,” she says.
Losses can range from a couple hundred dollars for work-at-home programs to $20,000 or more for people who get hooked on worthless business coaching or training materials that rely on pirated, decades-old books, including one Durst got that was originally written by P.T. Barnum. Bethany Mooradian, a Seattle blogger and author of I Got Scammed So You Don’t Have To!, says scammers frequently post ads on websites such as Monster and Craigslist. “I find ads there claiming you can make money reading e-mails, sampling products, or completing surveys. You might be told to pay $20 a month to get on a list where you’ll get freelance work opportunities, but what you get is basic information you could easily find for free yourself,” she says.
With today’s technology and a few minutes of due diligence, no one should fall for such schemes. Many sites offer free research tools that can help check out companies, individuals, and websites, such as: Whois.com, Copyscape.com, TinEye.com, and Quantcast.com. To find out whether a company is legitimate, type its name plus the word “scam” or “sucks” into a search engine and look to see if it has been listed at consumer protection sites like Ripoff Report.
The main reason would-be entrepreneurs fall for scams is desperation, which becomes more pronounced in poor economic times, Durst says. Mooradian agrees: “People are in a position where they don’t want to wait and check something out thoroughly. Desperation is never good for cash flow; you may realize something is not logical, but you don’t stop and think about it because you want to believe it’s true.”
Sales pitches that emphasize emotion and flashy promises but skimp on details about the company or actual work should be red flags. So should any business that describes itself generically as a “system” or “program,” Durst says. “Most of these scams are a mile wide and an inch deep.” If you do fall for a fraud, don’t expect to recoup your loss, but do take the time to warn others away by reporting your experience to the U.S. Federal Trade Commission, the Internet Crime Complaint Center, and your state attorney general. “You can get revenge by educating the marketplace and preventing these guys from getting other victims,” Durst says.