Job Schemes and Business Opportunity Schemes
It’s important to make a living, but whether you’re looking for a job or thinking about starting a business, know that there are fraudsters and con-artists who may seek to take advantage of you either in person or online. Remember, if it sounds too good to be true, it probably is. Here are some tips:
- Be wary of people who insist on being paid in cash or in some other manner that will make it difficult for you to get your money back.
- Never provide your credit card information to any business that you have not fully checked out. Regularly check your paper or online credit card statements for bogus or unauthorized charges.
- If you agree to purchase supplies as part of a job or business opportunity, make sure you are not signing up for on-going shipments. This is especially true if they tell you all you have to pay is “shipping”— the payment information you provide for shipping may be used to charge you for products delivered in the future that you didn’t intend to order.
- Insist on getting the details of any business offer in writing.
- Get independent references and check them out.
- Check out the business or job placement service with the Better Business Bureau. Also search for reviews online by typing the name of the business or promoter into an internet search engine with the words “scam,” “complaints,” or “reviews.”
- Don’t let yourself be rushed into a business or job opportunity. If the opportunity is legitimate, there should be time for you to think about it and do your homework.
- Don’t assume that a “refundable” payment will actually be refunded.
- For a business opportunity, ask for and review all government-mandated disclosure forms. If they have none, find out why.
- If the business opportunity involves you selling products or services, check with likely customers to see if they actually might be interested first. You might discover that there is little or no demand for the product or service
- Be skeptical of advertising—just because it’s on TV, the radio, the internet, or even a hand-written poster in your local laundromat, that doesn’t mean it’s true. Be particularly skeptical if you see nothing more than glowing praise and an 800 number.
- Be skeptical of cold calls and other offers you didn’t ask for.
- Be skeptical of offers that are long on promises but short on detail.
- Be skeptical if the cost drops sharply after you say “no.”
- Ask questions, including:
- Where are you located?
- How long have you been in business?
- What do I have to do to earn money/get a job?
- How will I be paid? By whom? When?
- What is the total cost including any additional training, materials, shipping costs, certifications, etc.
- How did you come up with the amount of money you say I can earn?
Job Offer Schemes
If you’re looking for a job, know that there are scammers who will try to take advantage of you. Here are some red flags to look out for:
- You need to pay for the job. If they are asking for money before you’re hired, it’s probably a scam. There are legitimate job placement services that sometimes charge the people they help, but you shouldn’t have to pay before you actually get a job. Also be aware of the difference between a job placement service and a job counsellor. Counsellors charge you to improve your skills or help with career decisions, but they usually don’t actually find you a job.
- The job placement service wants your credit card or bank information. You should not give out this information to any company you are not familiar with.
- You’re being offered a “secret” list of government jobs or a chance to get on an inside track for government employment for a price. You never need to pay for a government job listing. For more information on jobs with the State of California, go to jobs.ca.gov. For jobs with the United States, go to www.usajobs.gov. And for jobs with the postal service, go to http://about.usps.com/careers/welcome.htm.
- You’re told that you or your child can be a model. It sounds exciting, and who wants to tell their son or daughter that they are not pretty enough to model. But if you are then asked to pay a fee before you ever get a modeling job, or that you have to use a particular photographer for headshots, it’s probably a scam.
If you’re looking for a job, two good places to start are California’s Employment Development Department and CalJOBS. You can also check with your current or former school’s career services office. Some schools will let you look at their job listings even if you are not a current or former student.
And while improving your skills and getting a degree can often lead to a better job, be careful of for-profit colleges that are just a scam.
If you’ve been a victim of a job scam, file a complaint with the Attorney General.
Business Opportunity Scams
Running your own business might sound like fun, but it can be difficult, can require long hours, and is never a sure thing. Making things more difficult is that there are dishonest people and companies that promise you everything you need to make a great of deal of money, but you often end up spending more than you’ll ever earn. Frequently these offers promise that you can earn big dollars working at home. These claims are rarely true. Popular schemes include:
- Wire service testing: In this scheme, you’re sent a check and asked that you deposit in your bank and wire a portion of the funds so that the company can test the wire service. In reality, the check is a fake and you have to reimburse the bank for the money they wired to the crook.
- Stuffing and/or addressing envelopes: It sounds easy, but often what you get for your money is not an opportunity to stuff envelopes, but merely instructions on how to try to get other people to pay you for the opportunity to learn how to stuff envelopes—in other words, how to cheat others the way you were cheated.
- Home medical billing or computerizing data: While you may be told that this is a golden opportunity, these are difficult fields to break into and are highly competitive. In fact, most medical practices don’t hire freelancers for this work, but use established services or their own employees. What you are likely to get for your money is just a list, perhaps outdated, of medical offices that are not interested in giving you any work.
- Resale opportunities: You’re offered name-brand merchandise at a steep discount to resell, but what you may actually get are cheap knock-offs or nothing at all. Don’t pay for merchandise until you’ve had an opportunity to inspect it, confirm it is genuine, and confirm that it is legally yours to resell.
- Assembly or craft work: A company offers to sell you the raw materials and/or machinery and promises to buy the finished product. But when you’re finished putting the product together, the company says your work isn’t up to standard and refuses to pay.
- Rebate processing: A business offers to train you, certify you, or register you to process rebates—for a fee. What you often get are poorly written and useless training materials and no practical tips or actual leads.
- Mystery shopping: Who wouldn’t want to be paid to shop at a particular store or eat at a particular restaurant? While some businesses do use mystery shoppers, many offers you see are phony. You shouldn’t pay to get into the mystery-shopping business.
If the business opportunity you are being offered costs over $500 but less than $50,000, and the company claims there is a market for the product or you may profit from it, it could be a “Seller Assisted Marketing Plan,” or SAMP. Not every business opportunity in this price range is a SAMP. For example, purchasing a franchise or an on-going business is not a SAMP. But if you are paying over $500 for materials, equipment, training, a vending machine, or the like, it is probably a SAMP. If so, the first thing you should do is find out if the seller is registered with the California Attorney General’s Office, as required by law. Go to Public Inquiry Unit and use the "Message" box to ask if the seller is a registered SAMP provider. If the company is not registered, ask the company why not, and if the answer doesn’t make sense, don’t invest. But, even if the company is registered, it does not mean that you should invest your money. A registration is not a guarantee that the SAMP is legitimate or right for you! Ask all of the questions and exercise the same caution as you would for any other business opportunity.
For more information on the SAMP registration process click here.
We have a sample SAMP application, but this is a sample only, and it may not be suitable for your business. You are responsible for reading the entire statute and determining which provisions of the law apply to your particular business.
For a Consent to Service of Process for your SAMP, click here.
If you’ve been a victim of a business scam, file a complaint with the Attorney General.