Tag: finding small business scams

What are the warning signs of a home-based business scam?

Many entrepreneurs choose home-based businesses, and some of those want to work from home with an established operation. For example: sales representative businesses or online home business programs. With these home-based businesses you’re part of an established brand and you get support from the company. However, not all home-based business programs are as good as they seem.

Some warning signs of home-based business scams:

  • Read the terms and conditions on the company’s site very carefully. You may be asked to pay a small fee for the start-up DVD or instruction guide. Be sure you can return the information without incurring even more fees.
  • Look for money-back guarantees or free, no-obligation trials. Make sure there aren’t sneaky clauses that mean you have no recourse if you change your mind.
  • If you’re being encouraged to “invest” in a “guaranteed” money-making business, be wary. Nobody can guarantee income, and they rely on you to pay a lot of money before you realize that.
  • If you’re being pressured or convinced to cash a cheque to pay for supplies, or provide personal or banking information early on, it’s most likely a scam.
  • Look for a contact number. If you can discuss the program with someone directly, then there’s a good chance it’s a legitimate home-based business opportunity. Be wary of people who can’t do in-person or virtual meetings, are evasive about your questions, or pressure you into signing up on the spot or paying for more information.
  • Research the company as thoroughly as you can. This can take the form of online searches on messageboards or member blogs, or it can also involve talking with people you know who may be involved with the program. If all you find are glowing reviews, that might be a sign of a scam. There isn’t a business around that’s 100% perfect.
  • Be wary of sites offering mind-blowing income promises. No business can promise you $10,000 a week for three hours’ work. If it sounds too good to be true, it probably is. Trust your gut feelings!
  • Even if income promises are realistic-seeming, many companies post the income expectations of their highest earners – not the average.
Share this post:

What you can do about small business fraud

As an entrepreneur, it’s important to look for scams and cons that frequently target towards small businesses. They’re a big threat – only one in three small businesses uses a fraud protection service. And just 18% of small businesses use dual controls to keep the risk of insider fraud at bay.

Read on to find out how you can reduce the risk of fraud, and what to do if you get hit.

How you can protect yourself from small business fraud

  • Keep your eyes open for invoices of products you didn’t order, membership renewals and signs of identity theft for you or your customers.
  • Ensure that your business has the proper controls in place to prevent fraud. For example: two people signing off on all cheques, and two people to approve all expenses.
  • Keep an eye on your own accounts – don’t rely on the bank to do it for you.
  • Perform good background checks on all employees who will be handling money.
  • Trust your instincts – if something doesn’t seem right, it probably isn’t.

Check out this Metro article for more great tips on small business fraud prevention.

What to do if your small business is targeted by a scam

If your business has been targeted by a scam, you should contact the Competition Bureau’s Information Centre online or by phone at 1-800-348-5358.

In the case of confidential customer information going missing or getting duplicated, your business could face some major legal issues. If any problems occur involving confidential customer information, contact the affected customers, credit agencies, and the police. The RCMP has an online area for reporting economic crime.

Credit and debit card fraud are also very common in small businesses. In 2008, more than $500 million was lost to debit and credit card fraud in Canada. The RCMP has launched a program called Project Protect in order to help owners, managers and employees of retail businesses deal with this important issue. Microchip technology has also been developed to offer increased protection against credit and debit card fraud.

Share this post:

How to sniff out a home-based business scam

For many of us, entrepreneurship isn’t about renting out office space or hiring employees; it’s about operating a sole proprietorship out of our homes. And some entrepreneurs seek out home-based businesses within an already-existing operation. Examples of businesses like these are sales representative businesses or online home business programs. Home-based businesses like these have their benefits – you’re part of an established brand, you get support from the company and networking events abound. However, not all home-based business programs are as good as they seem. Here are a few ways you can sniff out home-based business scams:

  • Read the terms and conditions on the company’s site very carefully. You may be asked to pay a small fee for the start-up DVD or instruction guide. Be sure you can return the information without incurring even more fees.
  • Look for money-back guarantees or free, no-obligation trials.
  • Look for a contact number. If you can discuss the program with someone directly, then there’s a good chance it’s a legitimate home-based business opportunity. Be wary of people who are evasive about your questions or pressure you into signing up on the spot or paying for more information.
  • Research the company as thoroughly as you can. This can take the form of online searches on messageboards or member blogs, or it can also involve talking with people you know who may be involved with the program.
  • Be wary of sites offering mind-blowing income promises. No business can promise you $10,000 a week for three hours’ work. If it sounds too good to be true, it probably is. Trust your gut feelings!
  • Even if income promises are realistic-seeming, many companies post the income expectations of their highest earners – not the average.

For more information, check out what our GoForth Expert Norman Leach had to say about finding legitimate home-based business opportunities.

 

Share this post: