With today’s economic situation being what it is, many people are looking for ways to get rich quick. Unfortunately, this opens the doors to scammers looking to prey on innocent people.
One scheme that I always seem to see is are Amazon Reseller get rich quick schemes.
The way it works is simple. According to the Federal Trade Commission (FTC), people who have no affiliation with Amazon advertise claims that, for a fee, they will introduce you to a system where you can learn how to earn thousands of dollars reselling on Amazon within a month. People who fall for these schemes end up paying the fee, as well as Amazon fees and end up, not only not making money, but losing a ton in the process.
Read on to find out more about the scheme and how to keep yourself protected.
How It Works
To set the bait, individuals or organizations advertise promises that clients can use their services to make $5,000 to $10,000 in just thirty days. They charge anywhere from $995 to $35,000 to gullible individuals willing to give it a try.
The upshot of it all is that the purchasers rarely and possibly never reach the advertised goal. More than that, many of the methods that are recommended in the listing and selling of the items violate Amazon’s rules and regulations leaving sellers with suspended accounts and the loss of ability to sell on Amazon in the future.
What’s more amazing is that these schemes were not made up by individuals but rather by corporations that are currently charged with violating the FTC Act and the Business Opportunity rule.
The case against them is ongoing but while waiting for a ruling, the court has barred them from making deceptive marketing claims and they have frozen their assets. The FTC is hoping that the ruling will result in an end to the illegal practices as well as damages awarded to injured parties.
The Business Opportunity Rule
With seemingly legitimate businesses creating scams that cause people to lose thousands of dollars, the world is indeed a scary place. One must wonder about the best ways to protect themselves.
This may come in the form of the Business Opportunity Rule, a rule violated by the corporations under scrutiny in this case. Here’s how it works for protect consumers.
The rule requires sellers to provide consumers with important documents to review. These documents provide insight that let consumers know more about what the seller is offering and it can help them determine whether or not the services are legit. Here is what the seller must provide.
A Disclosure Document
The disclosure document must contain five key pieces of information that can be fact checked by the consumer to determine if the offer is legit. The pieces of information are as follows:
- The identity of the seller
- Law suits or legal actions involving the seller
- The details of the seller’s return and refund policies
- A list of references
- A statement regarding whether the seller is making an earnings claim
The seller must provide a disclosure document at least seven days before a consumer is made to sign a contract. This gives consumers times to check out the facts.
Consumers may be suspicious if the list of references include anything but aboveboard businesses. The contract must also be provided in the consumer’s language of choice.
Earnings Claim Statement
If the seller is making an earnings claim, they must provide the consumer with an earnings claim statement. This document must include the following:
- The name of the person making the claim
- The date
- The details of the claim
- The start and end date that spans when the earnings were achieved
- The amount of people who got those results or better
- Any information that might have made those people different from you such as where they live or their skills and education background
- A statement that you can get written proof of earnings if you ask for it
Compare this information to the claims that have been made by the company. If anything doesn’t add up, it’s best to walk away.
In addition, the Business Opportunity Rule also points out certain practices that are against the law.
These are as follows:
- It’s illegal for sellers to say anything that contradict their disclosure document or their earnings statement
- Sellers can’t say they’re offering you a job if they’re really promoting a business opportunity
- Sellers can’t misrepresent the nature of the investment by telling you that they will help you line up locations, customers or outlets if it is not true.
While getting the proper documents from a company is a good sign, consumers are also advised to follow up by taking the following actions.
- Insist on seeing written proof of the earnings claims
- Speak to those who have worked with the company before to find out how accurate their description of services is
- Listen to sales pitches with a critical ear trying to determine if they sound overly salesy or too good to be true.
- Consider asking an expert such as a lawyer or business advisor to look over any documents before you sign
- Check in with the Attorney General and BBB and do your own internet research to find out more about the company’s reputation
How to File a Complaint
If you come across a company that you think is guilty of fraudulent activity, walk away. You may also protect other consumers by reporting possible fraud. This can be done through your state attorney general’s office, through your state or county consumer protection office, through the BBB branch in your area or through the FTC.
It is unfortunate that so many people have lost money by falling for this scheme. It is hopeful that legal actions allow them to become reimbursed for damages.
One silver lining that comes out of this is that it raises awareness in preventing consumers from falling for business opportunity schemes that make dishonest claims. Remember, if you get an offer that seems too good to be true, it probably is. Request and review documents carefully to make sure you’re making a business decision that is right for you.
