Everything's A Scam... Distinguishing Between Scams & Opportunities

Have you heard how engineers say everything's broken and needs fixing? Many of my friends are professional engineers, and it's true; they immediately try to redesign everything they see or make some adjustment to any machine they encounter. It really bothers me, because things that work properly should be left alone; adjustments often cause failures! The engineers embrace the predominately negative attitude most humans naturally have. This worldview of negativism causes poor decisions, low self-esteem, and unhealthy feelings throughout our culture.

This view is perpetuated through our educational system which was not meant to educate but to develop people easy for governments to control and to provide human assets for American industry.
Only in the last few years has entrepreneurship begun to be taught in our colleges and universities, and it still is only offered in a few high school systems. So it is easy for people to say they can't do anything out of the ordinary, like become self-employed.

The prevailing attitude toward home-based business is to call them all scams. It started with MLM and has been extended to include every sort of new idea that is brought to market.
Sadly, many of these certainly are scams. Rather than having the government, or some self-delegated organization decide what entrepreneurs can do, though, it should be left to all of us to find and evaluate information about any opportunity and then decide for ourselves. We need to pay attention to warnings that appear in the media; but often these information sources condemn everything as a scam. Have you ever approached an intelligent prospect with your opportunity only to have them immediately say, "My advisors have told me never to go into any kind of affiliate, MLM, or direct selling program? They are all scams and you should be ashamed of mentioning it to me!" This has happened to me and it is so untrue. But there is no need to try and persuade someone who already has an attitude.

 
That's why this article is important. It should provide a new way of thinking about the reasons the naysayers try to destroy any unconventional opportunity regardless of its opportunity. Perhaps you can craft a way to counter such objections in advance of that "kiss of death" response.

National TV networks and their local affiliates have been having almost daily reports of scams for people to avoid. There are a lot of those, but to have a different news segment every day, many old scams have to be resurrected to fill the time slots. These alerts are useful because there are many people new to the Internet who are exposed to these dangers constantly; telemarketers, spam e-mail, and even print media deliver these potentially dangerous schemes to the unsuspecting. The warnings are definitely necessary. The problem is how they are presented and the resulting national mindset against all entrepreneurs who work for themselves.

Let's look at some things they say on a daily basis:
Elisabeth Leamy, of ABCs Good Morning America has written a book, The Savvy Consumer: How to Avoid Scams and Ripoffs That Cost You Time and Money. ABC featured her on the show and has a place on their Website, both of which are plugs to sell her book. I take issue with this part of the introduction shown on the ABC Website where she says smart consumers should not do business with people who come looking for you, like a contractor who rings your doorbell or someone offering their services at a discounted rate with a coupon or similar offer. The admonition, "If it looks too good to be true, it probably is not true" is very good advice, but it should be given with the suggestion that every such offer be investigated with references and outside several sources.

The author says you should always conduct your own search to find people to perform work. This is true; you always do have to look for people doing the things you need to be done, but if you happen to receive an unsolicited offer, it could possibly save you some time and lead to a quality source for the future. It's misguided just to throw aside every unsolicited offer.
Some suggestions in the book are exactly what you should do, like hiring a mechanic to inspect a potential used car buy. Others are just hogwash like the one above, probably put into the book to add length and make the book easier to sell.
Another ABC News report addresses envelope stuffing, because most schemes do not offer products--they just want you to recruit others to purchase the offer. The article does say not all home-based offers are scams. Some up-front money is legitimate to pay for training materials, but the total amount up front still should not be terribly expensive. Ask to speak to a person about the opportunity, money required, and wealth possibilities. Mary Kay and Avon are examples listed where it's easy to talk to someone. A refund policy is very important if you must purchase a starter kit.

The article continues with very good advice never to give passwords, Personal Identification Numbers (PIN), your Social Security Number (SSN), or anything like that to anyone. You must give some information to do business. In the US, to receive money from any source you must provide some kind of tax number; rather than giving your SSN, apply for and always use a Federal Employer Identification Number (EIN) which you can get online free in just a few minutes here. Never give your SSN to anyone unless you are sure it is requested by a legitimate government agency. If this number ever gets on the open market you're in serious trouble!

Here's something to keep in mind: The Internet is loaded with scams. If an ad says you don't need any experience or any skill, but you can make up to $1,500 a week, stay away. There's no legitimate way to earn that kind of money without skill and effort. If you can't talk to a live person to answer your questions about the highs and lows of the opportunity, don't send money.
Good advice maybe, but see if that advertisement came from a sponsor's site that plays fast with the facts. If you like the opportunity, try to find out more by going directly to the company home page; if the claims are still outrageous, leave it alone!

A CBS affiliate, CBS 6 Albany, has a warning about scholarship offers. They offer some warning signs that the offer may be a scam, such as:
• "You can't get this information anywhere else." Well, it may not be available elsewhere. If the company specializes in niche scholarship aid programs, it will not be known everywhere. I worked in the Trust Department of a bank, and one of our accounts was from the estate of a person who wanted the funds spent on education for a person from that specific area. Of course we notified the student aid officer at the college, but this information would have been available nowhere else so that a person needing financial help for college would never find out about it unless they applied to that college. There are many similar aid funds for ancestral groups, religious groups, and just about any other association of people. Your child might be eligible for one of these if they only knew about them.

• "We'll do all the work." This could be a valuable service because obtaining forms, knowing where to send them, and the proper way to complete them requires some knowledge of the system and a lot of time and effort.
• "The scholarship will cost some money." Be aware also that there are many legitimate companies that advertise they can get students access to lists of scholarships in exchange for an advance fee. Other legitimate services charge an advance fee to compare a student's profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. And, there are scholarship search engines on the Web. There is one main difference between legitimate companies and scam artists: Legitimate companies never guarantee or promise scholarships or grants.

Here are some resources for more information for students and parents:
The Federal Student Aid Website
U.S. Department of Education Student Guide Website
I was in business for a while offering to provide scholarship sources meeting the criteria submitted by prospective students. The resistance I met was from several sources:

• "There are books listing every imaginable aid source." It's true, there are books. But it probably required more than a year to publish them and there are many new sources and many that have ceased to exist in this time period.
• "The financial aid officer at my school will help me for free." That's true, but no financial aid officer can possibly know about every little local aid program although they should know most of them.
• The biggest unstated reason for some people to shun the use of scholarship-searching services is the amount of personal financial information required. Just as there are many people who turn down disaster aid because they have unfiled income tax returns or other questionable business practices and don't want anyone to know about their activities, so are there many people who won't apply for student aid for the same reasons. Then the problem of applying in plenty of time often goes unrealized until the last minute; all the aid for this year may be gone by then. So these people will probably say all scholarship programs are scams.
Other CBS 6 segments deal with magazine sales or subscription renewals. Here are some things they say to look out for:
• The person may call you by name, from having sold subscriptions to your neighbors who identified you as a potential purchaser. They may also tell you that your neighbors have already purchased subscriptions, naming them by correct names.
• The person may identify him or herself as a college student trying to earn money towards a trip related to their studies, or possibly as a young person who had problems in the past and is now trying to better themselves and avoid getting into the same types of problems again. You should be wary of these kinds of stories or similar ones.
• The person may have a visible handicap or disability and may try to include information or a story about this in their sales pitch, to gain more sympathy from you.
These salespeople may still be legitimate. If you don't want what they are selling simply say "No." If you would like to buy, get the company name, address, and telephone number. If there is no physical address other than a Post Office Box, send them away or at least insist on calling the company to confirm the legitimacy of the salesperson. Everybody has a cell phone so it is no trouble to ask the person to wait while you call the company; if they are legitimate they will wait, if not you won't have to worry because they will just leave. Don't turn away all these people just because some reporter at a typewriter says you should.


An interesting Google ad appeared on the CBS 6 page while I researched this article. It was for the "Top 10 Work At Home" opportunities. Rather than opportunities, these all appear to be instruction manuals for about $40-$50. When you get on the site, you can't close any window without having to close three or four popups. Another sponsor ad on the same site was for a landing page trying to sell the same "Top 10."

NBC also warns about scams. To their credit, among the opening remarks on one of their alerts is some favorable information explaining that multi-level allows you to build and manage your own sales force. You are responsible for recruiting, training, supplying, and motivating these persons just as in any sales organization. From these efforts, your total compensation includes some percentage of the sales of your entire group plus your own individual earnings which makes this an attractive business model. Kudos to NBC, at least for this.
NBC also has a segment on the "Warning Signs of Fraud." I have issues with three of these:

1. A required initial fee which greatly exceeds the fair market value of any products, kits or training. In theory, I agree with this warning, but my problem with this is how do you know the market value of products not available on the general market. The best you can do (and you should do this) is try to find similar products and compare prices for goods of equal quality and benefit. Training materials are more difficult to assess. You might check Amazon for books on the subject of your prospective business and compare those prices. That will give you a reasonable idea about the value of training kits.

2. A large fee payable before you receive anything in return. This idea has the same issues and solutions as the "initial fee" discussion above.

3. Evasive answers by the salesperson or unwillingness to give disclosure documents required by law. This is always going to center on "How much can I make" and "How much do you make?" How much I make is totally dependent on my desire and willingness to do what it takes to succeed. Several times I have spent precious time and big bucks to find out what I needed to do for success in several businesses. I realized I did not want to do what was required, so I swallowed my loss and charged it to experience. With regards to how much I make, that's nobody's business but my own. If you apply for a job at McDonalds, do you ask the manager how much she makes? These are the only answers to those two questions and the writers of these "Warning Signs of Fraud" articles will always say this is evading the question, because they almost always put down individual entrepreneurship opportunities.
Since you now know about the overwhelming negative attitude in the U.S. media, the churches, and the schools toward individual enterprises, you can prepare ways to get around all these objections before they occur.

Tell the truth, make no unprovable or outrageous claims, do what you can to gain your prospects' trust, and believe in the opportunity you are promoting. You will always come out ahead; stay positive and realize every "no" is just one less objection you must hear and one prospect closer to the next "yes."