The Signs Of A Scam.
Of late I have been been having a number of conversations with people about scams. From guru scams ($8,000 mentoring programs where you can never find the mentor) to Real Estate scams (gave a partner money (or signed on a mortgage) and now there doesn't seem to be an actual deal). So this has me thinking about how you can tell if a deal is a real deal or a scam. I have some ideas but more questions than answers at this point. So I throw it open to you guys: What are the likely signs of a scam?
There is always the old standby "If it sounds to good to be true." I don't know exactly what that means though.
A promise of big bucks in a short amount of time. (Get Rich overnight)
The phrase "no experience necessary."
No Contact Information or Limited Contact Information
Phony Association Information
Pressure to sign a contract or other document right away.
Rushing You To Make A Decision
Testimonials from other "successful" people who are working at this business and making hundreds of thousands of dollars a year. No Verifiable References or Testimonials - Notice I said, "verifiable."
The bottom line is that you should let common sense be your guide. If something seems not quite right, don't bother. At the very least, check out any company thoroughly before making any commitment.
[addsig]
If it sounds complicated - run. While this is not an easy business, it is a simple one. If there a lot of moving parts to get around obstacles, those obstacles are probably laws. Also, anything that causes negative cash flow. Regardless of what anyone tells you, rule #1 is don't lose money.
Thanks for your imput so far. . . .
One of the "scams" that I am thinking about is these guys who sell seminars for big bucks where 99% of the people will never make any money on the technique "taught" (mostly hyped).
How about this one (from a recent post here)
Quote:I atteneded a 'government grant' seminar today and doing this seminr they tell u about how u can get money from the government to do just about anything. at the end of the seminar they said that they will be holding a two day workshop. in this workshop they will teach you the hows and wheres to apply for these grants, they also give u a lifetime membership in which they give u your own personnel counselor in which u can call anytime to help u fill out your application. once u fill out app. it goes through a number of people to proof read your app. and the last person that reads it, if there are no mistakes gives it the finally approval by stamping it with a state seal. all this for $999.00. is this a good or bad investment.
So my favorite part of this one is the idea that this private seminar company can give your application some sort of official stamp of approval (Nothing like an embossed stamp and a blue ribbon to milk the marks).
But there are other things that smack of the scam hype to me.
Selling information which is readily available either cheap or free already. (the SBA will be glad to perform the same instruction service and God knows how many grant-writing books there are out there at less than $20).
Personal counselor/mentor.
The process is automatic (all you have to do is have your application proof-read).
No discussion of any underlying business reality (government money to do just about anything).
A two part pitch. I.e. an initial presentation to a wider audience. But then the doubters are eliminated and the "workshop" begins where, unless I miss my guess, there is going to be a pitch for even more money for the "deluxe" mentoring package.
So I'm sure you can think of half a dozen Guru's practicing these same techniques. A handful of their students will do well and get hyped at the next show. By far the majority (99%) will never make a dime on their "investment". Why is that not a scam?
Some of the things that to me scream "snake oil salesman" and scam...
1. If there's a "simple secret" (but, of course, the "simple secret" isn't revealed till you fork over your money);
2. Pictures of mansions, luxury cars and other trappings of "success";
3. Never-ending pages of marketing stuff doing the "hard sell" routine, liberally laced with 6 and 7-digit figures (yes, you, too, can have all of this);
4. Text that "screams";
5. "Fool proof" this and "fool proof" that;
6. It's so simple you'll kick yourself that you didn't think of it;
7. The product usually costs $$$$ but "if you act now," it's yours for nothing (or for only the small sum of X$)
Never pay any up front broker fees!
Always do your your home work.
Again do your home work.You can make fast cash, Score a big hit and do it in a short time. But you have to do your home www.work.I've had big profit deals in a short time period. BUT BUT i have had gravy deals that end with little to none.(PROFIT)
Remeber you will never go broke making money.
a % of something is better than 100% of NOTHING.
Greed is why people get scamed.
There's this team of folks "headquartered" in Rochester, NY that travel around to big cities & hold free seminars at airport hotels. How convenient, if you don't make your decision on the spot, you can't walk into their office next week to follow up. And of course the price changes. The presentation is great (if you are an unsuspecting, disgruntled employee, not willing to do any research on your own). But the whole thing is suspect because:
1 - the presentation is much about nothing...never offers info that you can leave the seminar with & do yourself unless you pay today's low price of $899 (down from $1199 since the start of the presentation)
2 - presentations that ask questions & never provide answers -- are you tired of this? wouldn't you like that? how about this, that & the other thing?
3 - re-packaged public info/gov't grants for hundreds $$ and "help" writing your biz plan or grant proposal with a toll free # -- grant info is online for free i.e. annual Catalog of Fed & Domestic Assistance and the gov't has SBDC's (small biz development corps) all over the country to get free technical assistance for biz plan/grant wirting.
4 - pressure to make the decision NOW at this low price
5 - testimonials are suspect so you have to have your own method for verifying references and transactions
I could not believe the # of people that ran to the back table to pay $899 by check & credit card. Many were spending their rent money. The presentation plays on peoples emotions to "get out of the rat race". So for those that think there is a quick road to success, they are the impulse buyers that keep the scams going.
Anything that is real, which could include the reality of doing SOME deals that make good money quickly, which is possible, should be able to stand up to intense scrutiny and due diligence.
If you start getting people who guilt you for asking too many questions and being a "dreamer" rather than a "doer", or people who answer questions incompletely, or change their tone, or try to avoid the question, you know they are scamming.
Communication is mostly physical and energetic and you can HEAR through the words while you are doing due diligence, because if it is real, they should be HAPPY to spend time with you if you are going to part with your cash to do deals, make investments, or buy products.
Good luck, Dave
Simply put, knowledge is power. Learn all you can with the least amount invested. These forums alone could give you nearly everything you need. The key is being able to make the numbers work. Don't rush in to things, but on the other hand, don't be to paranoid to make a risk, either.
Quote:
On 2004-09-04 13:21, davehays wrote:
Anything that is real, which could include the reality of doing SOME deals that make good money quickly, which is possible, should be able to stand up to intense scrutiny and due diligence.
If you start getting people who guilt you for asking too many questions and being a "dreamer" rather than a "doer", or people who answer questions incompletely, or change their tone, or try to avoid the question, you know they are scamming.
Communication is mostly physical and energetic and you can HEAR through the words while you are doing due diligence, because if it is real, they should be HAPPY to spend time with you if you are going to part with your cash to do deals, make investments, or buy products.
Good luck, Dave