Business Opportunity Scams (page 1 of 2)	
Business Opportunity Scams	
Hundreds of companies now face legal action filed by the Federal Trade Commission (FCC) and Justice 
Department because they sold business opportunity (biz opp) scams (dishonest, fake, illegal plans) to 
persons who want to start their own business (entrepreneurs).  Over $100 million a year is being lost to 
these scams (illegal activity) promising quick and easy money.  Want-to-be entrepreneurs who want easy 
business income (money) are jumping into the arms of con artists (person who lies to get another person 
to do something illegal) who claim: "We are not just 
selling you a business, we put you IN business."   High 
school seniors and young college students are often 
the persons approached with promises of fast and 
easy money businesses deals.  
Promises of easy work at home:  You are told that 
you can earn $2,000 or more per month by starting 
a home business such as Internet Sales, Craft Work, 
Medical Billing, Customer Service, or Mystery 
Shopper.  You must buy a Starter Kit with supplies, training, and names of experts to help you.  You will 
be sent poorly written training lessons with no money back guarantee.   The lists of experts are out-of-date, 
people who never heard of the business, or fake names.  If you used your credit card to pay for a Starter 
Kit, you may find that your credit card has more charges added that you never approved.     
  
Promises of instant riches:  A flyer for a Utah snack vending machine company reads:  "Many people earn 
$36,000 per year in income working only five or six hours per week! Call 1-800-XXX-XXXX.   We 
guarantee 36 prime locations."  In another case, a seller of video game machines, said that an operator had 
earned $14,000 from 4 video game machines in 4 restaurants in just one week!  (NOT  TRUE PROMISES)
Promises of a new idea:  A promoter selling a vending machine known as the "Alcohol Neutralizer" 
offered investors five machines for $4,500.  Installed in bars and taverns, the "Alcohol Neutralizer" was to 
dispense a herbal pill containing an active ingredient that promised to be able to reduce blood alcohol count 
(BAC) levels.  The promoter said that the pills had been tested as safe and effective by the Food and Drug 
Administration (FDA) and were backed up by the work of Harvard Medical School researchers — which 
was NOT TRUE.  A study by an Indiana University scientist found that the herbal ingredient in the pills 
might actually keep BAC levels higher for a longer period of time than if a drinker had never taken the pill.
Tactics Used to Sell Business Opportunity Schemes:
"Start a profitable business" scams are often pushed at trade shows (such as 
auto, boat, or computer shows) and through newspaper, magazine, and 
internet ads.  Scams make claims such as:
•  Quick money and high income! No experience is necessary.  
•  Promise prime territories (sales areas).
•  High-pressure, decide quick, sales techniques to pressure a victim into 
turning over his/her money. 
•  Promise that YOU are HANDPICKED by the company as a SPECIAL person.

College & Career Publishing.  Permission to use with usworkworld.com subscription.  	Business Opportunity Scams (page 2 of 2)	
QUICK CHECK:
Steps You Can Take To Protect Yourself:
A.  Be careful about claims that sound too good to be 
true.  The "bait" on the "hook" of a biz op scam is 
  that a person with no experience will be able to work 
only a few hours a week and earn lots of money.  
  The truth is that making money always requires 
  hard work . . . and lots of it.
B.  Read the  written disclosure document before giving 
your money.  Business opportunities and franchise 
sellers are required to give you a  written disclosure 
document before you sign a contract or pay money.  
  If this document is not given to you, beware!  You 
may use a written disclosure document in a court as evidence of the corrupt scam, if needed
C.  Make sure that the business has met the law to register with a state.  Use the internet to search for your 
state's Small Business Office to ask for help to identify if the business is real or bogus (fake) business.
D.  Talk to current investors.  The disclosure document must contain a list of the business opportunity’s 
current operators.  But be on your guard!  A seller of a bogus (fake) business opportunity may line up 
"singers" — persons who give phony (fake) stories of how great the business is doing.   You should 
visit their business sites to see for yourself!
E.  Research the market. Don’t rely only on glowing promises from those who claim that customers want 
to buy the product.  Ask your friends, family, and other adults if they would buy this product.
F.    Get advice.  Talk to a trusted adult — or spend money to ask an accountant or lawyer to tell you if this 
is a good business opportunity or not.  These people will be able to spot details that you are missing.  
Since they are not caught up in your dream for riches, they can judge a business opportunity .
G.  For information, visit Federal Trade Commission: consumer.ftc.gov  Click: Jobs & Making Money.  
In the dropdown menu, click Goding into Business.
1.  a) What is "biz opp"?  b) Define "scams"  
  c) Define "entrepreneurs"  d) Define "con artist"  
2.  a) Why are entrepreneurs jumping into the arms 
of con artists?  b) Which 2 persons are often   
  approached with these promises?
3.  a) List 5 home businesses opportunities that are 
usually scams?  b) What must you buy?
4.  a) What did "Alcohol Neutralizer" promise?  
  b) What did the IU university scientist find?
5.  a) Where are "Start a profitable business" scams 
promoted?  b) List 2 claims that may be made. 
6.  Step A:  a) What is the bait on hook of a biz op 
scam?   b) What is the truth?
7.  Step B:  a) With what are promoters required to 
present you?  b) When should you beware?  
c) Where may you be able to use a written 
  disclosure document?
8.  Step C:  a) Define "bogus."  b) What state 
  office will help you identify bogus business 
sellers?
9.  Step D:  What do "singers" provide?
10.  Step E:  On what should you not rely?
11.  Step F:  List the 2 people that will give you 
advice.  b) Why are they in a better position to 
judge a business opportunity?
12.  What internet site do you visit for more 
  information?
13.  a) Have you or any one you know been offered 
a business opportunity plan?  b) Explain.
14.  a) From this lesson, list the 2 most valuable tips 
that will help you spot a fake business. 
  opportunity scam.