Better Business Bureau of Western Michigan, Inc.

News Release # 010101
Issued: 01/02/01
Contact: Ken Vander Meeden
616-774-8230 or e mail: bbbceo@iserv.net



Bogus Business Opportunities

In this scam, con artists take advantage of would-be entrepreneurs by pushing over-hyped or worthless small business deals on unsuspecting consumers. Many of these bogus business opportunities offer a pre-packaged business, like a franchise. Typical scams involve investing in, and then managing, vending machines or pay phones that are set up in high-traffic areas like malls, airports or other public places. Often, the promised equipment never shows up, or if it does, investors find that the equipment is defective, the locations are either non-existent or not exclusive, and the income is not anywhere near what was promised.

Work At Home Schemes

This scam offers home-based entrepreneurs the chance to work for nothing. Schemes include assembly or craftwork, where the entrepreneur may be required to spend many hours producing goods for a company which has promised to buy the goods when completed. These might be "kits" to make items such as aprons, baby shoes, Christmas ornaments, stuffed animals or plastic signs. The catch? The would-be entrepreneur has to purchase the equipment and supplies, and the company doesn't buy the completed work as promised. Another version of this scam is the envelope-stuffing scheme, which basically amounts to a chain letter.

Phony Directories and Unsolicited Invoices

Every year, Michigan businesses are tricked into buying expensive directories and manuals. This scam starts with a phone call to confirm the company's address and to get a contact name. A follow-up call to another employee is used to confirm the order for the unwanted directory, which is later delivered with a costly invoice attached. In the unsolicited invoice scam, companies get invoiced for goods and services that were never ordered. These look-alike invoices are actually solicitations for your business. Unwary accounts personnel authorize payment. To protect your business, educate your staff to recognize these solicitations.

Foreign Lotteries

In this scam, telemarketers sell foreign lottery tickets in "pools" with a hefty price tag attached. A typical scenario begins with a caller suggesting the target - often a senior - has won or could be the winner of a lottery or jackpot, and to collect the winnings, they must send in money to cover "taxes" or other bogus fees. Once the consumer agrees to hand over the fees, or submit bank or credit card numbers, they usually find they are thousands of dollars out of pocket. As with any financial transaction, consumers should be careful about to whom they give their credit card number or other financial information.

Pyramid Schemes

Pyramid schemes - even those on the Internet, are as old as the hills. Usually promoted as a fast track to riches, these schemes deceive consumers with the promise of quick and easy profits for little or no effort. In fact, most people who participate in pyramid schemes lose, because sooner or later, no new participants can be recruited to keep the scheme going. One way to spot this kind of scheme is that instead of selling real products, pyramid schemes focus on recruiting new members. Don't be fooled, only those at the top make any money. These scams are doomed to fail and, what's more - they are illegal. As soon as you begin to participate in a pyramid scheme, you're breaking the law.

Florida Timeshare Travel Promotions

It might offer fantasy and fun, but if a vacation deal sounds too good to be true, it probably is. In the Florida timeshare scam, vacation certificates for holidays in Florida are the "prize" given out in contests or promotions. But what is supposed to be a free trip can end up costing hundreds of dollars. To top it off, the offer is conditional upon you attending a timeshare sales presentation. The bottom line? When planning a vacation, steer clear of deals that imply you've won a prize. If you have to pay for it, you haven't won. Also, avoid pressure to buy right now. Legitimate deals don't evaporate overnight.

Internet Fraud

The Internet may be revolutionizing how consumers buy and sell goods and services, but it has also become the home of high-tech fraud artists. Some of the most popular Internet scams include investment scams, online auctions, bogus business opportunities, chain letters and pyramid schemes. Online consumers can protect themselves by learning how to identify fraudulent e-businesses. Among the things to watch for: high-pressure sales tactics and offers of "now or never" deals; businesses asking for payment by private courier instead of by regular mail; "free" prize offers that ask you to send in money; and, companies that don't list their address on their web site. Consumers should keep in mind that they need to check out online companies and the goods or services they offer - just as they should do with any offline business.

Bogus Charities

The holiday season is the time of year many legitimate charities are busy collecting contributions, but there are also bogus charities out to scam potential donors. These charities will often use a name that is similar to a legitimate charity and use high-pressure tactics to collect donations. Remember that giving is your prerogative; so don't be bullied into making a donation. Other tips to help make sure your donation is going where you want it to: always ask fund-raisers for their identification and ask them how much of your donation actually goes to the charity. You can also check on whether a charity is registered by calling the Michigan Attorney General, Charitable Trust Division at (517) 373-1152.

Office Supply Scams

The typical office supply scam involves goods or services that businesses routinely order and use on a daily basis; things like copier paper, toner and maintenance supplies. The idea behind the scam is to get you or your employee to buy items you didn't order, or to get you to pay more than you agreed to. To make initial contact, fraudulent telemarketers call and claim they're your regular supplier, or that they have "special deals" on office supplies that are "good for a limited time only." These kinds of scams take advantage of holes in your organization's purchasing procedures, or exploit unsuspecting employees who may not be aware of office practices. Even if the bogus firm does provide the material, the office supplies are usually over-priced and of poor quality. Your organization could be the victim of an office supply scam if you don't have adequate purchasing controls and you haven't trained your employees to recognize these kinds of scams.

Nigerian Letter Schemes

A classic "get rich quick" ploy, this scheme has been perpetrated worldwide and usually targets small businesses, churches, and other non-profit organizations. It starts with a letter, fax or e-mail from Nigeria marked "urgent" or "confidential." The sender claims to be an official of a company or government ministry who is trying to transfer millions of dollars out of the country. The letter writer proposes depositing the money in a trustworthy bank account in exchange for 30 per cent or more of the transferred funds. To get in on the action, the business or organization must provide its bank account number and other company information. When that information is provided, the business is then asked to start sending large sums of money to cover the transfer of funds, the payment of taxes or the bribing of Nigerian officials. Of course, the millions of dollars do not exist, and victim eventually ends up with nothing but loss. Moreover, once the organization has stopped sending money, the perpetrators have been known to use the personal information and checks they receive to impersonate the victim, and access bank accounts and credit cards. In recent months, this scheme has also been originating from other countries.

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Four New members were elected to three year terms beginning in 2001.


BBB Officers for 2001 are:

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Worst Offer of 2000

Most pathetic scam this year involved People Helping People of Fort Wayne, Indiana chain letter. Premise was "give and you shall receive" and letter asked for $5 to be sent to six people who where financially needy and on the "list". You would then get on the list and receive up to $279,000 from others who are needy. Old fashioned, illegal pyramid scheme with a Biblical reference.

Most Deceptive Ad for 2000

A repeat winner (loser) here for the first time as the WOODS & WATERS COMPANY of White Cloud keeps sending "post cards" announcing you have won a computer, or bike, or something of value if you call their 800 number. The catch is you must visit and endure a sales pitch for a recreational camp site. In spite of numerous BBB letters to stop this and in spite of being reported to enforcement agencies, the pitch goes on, and on, and on.

Lifetime Achievement Award

The local 2000 Lifetime Achievement Award for shameful activities is a tie between the 10,000 or so "quasi-charities" that continue to actively solicit donations for seemingly reputable causes. While giving as little as 5% or 10% of the donations collected to the actual "cause", these quasi-charities are still within the letter of the rarely enforced laws. Literally millions of dollars are mis-directed from the more effective, efficient, and ethical charities to these quasi-charities. All reputable charities suffer when the quasi-charities get your donations. More than ever the BBB advises, "When in doubt, check it out."