April 25, 2012 | Comments Off on Business Scams
In March the Professional Consultant’s Association of Central New York had a roundtable discussion on looking out for and dealing with business scams. All of the members talked about the types of scams they’ve encountered, and for things people need to watch out for.
Mitch Mitchell of SEO Xcellence led the discussion, and below is the outline and highlights of the discussion:
The basic anatomy of a scam is comprised of 3 things:
1. It’s too good to be true
2. It looks legit but isn’t
3. You don’t see it coming.
People tend to get swayed by two things. One, making money, especially when times are tough, and two, the promise of bigger money that your logical mind says can’t be possible, yet your other mind decides to explore. These are the things scams are built on.
Next we have the different types of scams and how they’re presented to us. They are:
Everyone’s gotten email from someone promising us millions if we’ll send them a few dollars. When it comes to businesses, the letters are better written and the promises not as large, but the same type of thing occurs.
2. Regular mail
These things come all the time in the mail, sometimes by postcard or flyer, but we have to read them carefully.
If you see anything posted on a pole or on a wall, it’s probably not the best business opportunity in the world.
4. Online Scams
You can find some legitimate work in places like Craigslist, but there are also a lot of scams that are looking to take your money and run.
5. Phone calls
These people sound legitimate, but you can’t promise anything to anyone until you’ve had time to research it. I had one weeks ago from someone representing GSA jobs, but the costs for going with them involved a monthly consulting fee of $250 and a fee per contract they helped write of $6,000 per, with no promise of getting the contract. You have to research everything.
6. Link scams
This is where you read something that looks really good and you want more information so you click on a link, and the next thing you know you have either spyware, malware or a virus on your computer; never good.
This topic got a lot of debate as to whether it’s a scam or just a bad business model. The general consensus was that these things promise you the opportunity to supplement your business with cash yet, because of their nature, end up flooding the market with so many others trying to market the same thing that you’re never going to make any money off it, and it distracts you from your regular business.
The final piece of the discussion centered around the topic of the types of offers that take money and time away from you working on your own business. The categories were:
2. Fake business/payment schemes
Remember that online scam point above? One of our members contacted someone on what looked like a great deal, only the person wouldn’t meet them in person. The last correspondence was the potential client saying he’d send a check for an amount way over what the work was worth, asking the person to cash it and send back the rest of what the check was for. Luckily, no papers were signed, but it looked good up until that point.
3. “You market me and I’ll pay you a percentage”
This is a scam because you’ve just signed on to be a de facto sales person for someone else during a time when you’re trying to market your own services. If you have need to use a certain product all the time and you value it, such as maybe being a computer repair person that only uses a certain type of hard drive when repairing computers, that might not be a bad idea, but otherwise anything that takes you away from marketing yourself first is an indirect scam.
4. “Pay me and I’ll tell you about a lead”
This goes along with point #5 above and even goes further. There are many websites that say they have lots of jobs and contracts you can bid for, but you have to pay them for access. Although nothing is ever guaranteed, you can bet that by looking around you’ll find the same jobs or potential contracts on your own with a little research.