Business scams have been around since the inception of business itself. The desire to make money and acquire wealth is a basic human desire, and there will always be people who want to try to do so in unethical ways; by scamming you. With the internet becoming a dominant avenue of commerce, business, and social interaction, scammers have found a new medium to deploy their manipulative tricks. The internet, therefore, can be a risky place for the untrained eye. The web is filled with scammers and their “limited time offers” or “opportunities” to “make money fast” that many internet beginners can become a victim of.
Let’s start off by looking at the kind of businesses online that are most likely to expose you to internet business scams.
The Most Common Breeding Ground for Scammers Online
The “work from home opportunities” or the “home-based businesses” continue to remain the most scammer infested areas on the internet. You’ll come across a plethora of offers that’ll pop up from nowhere to offer you money-making (read money-losing) opportunities on the internet.
The wide range of scams in this area can be clubbed into two broad categories here. Both of these scamming tactics target people looking to work from home or make money off of the internet. These scams will take one of the following routes to draw you in:
- They offer you the opportunity to work from home for a supposedly established business. You basically work as an employee here for a company that might not even exist.
- They offer to “help” you in setting up your own online business so that you can make millions. It could be any of the home-based businesses, such as affiliate marketing, mystery shopping, etc.
Let’s dive deeper to get a better understanding of the scams at play here.
Online scammers usually draw in their prey with “offers” and opportunities that are too good to pass up, at least to the huge chunk of novice internet users. And let’s face it, who wouldn’t want to start an online business that can generate them passive income? Besides, it’s not like such businesses do not exist or are totally fictitious. As the business landscape has transformed and the internet has come to dominate most facets of our lives, there are hundreds of new, exciting and seemingly simple businesses or work models out there that we can try our hand at. However, the following are usually not some of them.
Let’s take a closer look at how these scams work.
This is a common work from home opportunity that scammers like to offer to their targets. Here’s how it works:
You are required to assemble craft projects from the comfort of your home. You will be asked to assemble things such as dolls, toys, or any other craft. The lucrative rates of payment per piece are what draw you in initially. However, a few steps later, you’ll find out that there is an upfront fee that you need to pay (a major red flag) that gets you a starter kit. This kit will include parts and instructions.
So, you might be wondering where the scam is in all this. Well, once you are done assembling the first batch of the products, you’ll find out that they do not meet the specifications set by the company. Now you’re left with the assembled goods that you cannot sell. The company (scammers) made their money selling you the starter kit.
List of Companies Hiring Home Workers
In this case, the online scammers will ask for a small payment to provide you a “secret” list of companies that hire employees that work from home.
However, the list that you get in return for your small payment is a list of companies that are not even looking to hire workers from home. Some scammers may be considerate enough to provide you a list of companies that used to hire home workers long ago. Either way, you are not getting the money back that you paid for the useless list.
A 1-900 Number to Call for More Information
You may be told to call on a number starting with 1-900 for vital information on “how to start your very own online business.” But before you fall prey to this cheap tactic, you should know that 1-900 numbers will cost you money to make a call. Once you make the call, the scammers have already taken your money.
If you have been using the internet for some time, you must have come across this particular type of scam attempt. Chain emails are another popular form of online business scams. They’ll ask you to make a small payment (by mail) to the top names in the list and forward the email along. By doing so, your name will be added into that list of names in the chain emails, and you’ll thus be getting paid by absolutely random people who’ll be receiving the chain of emails.
As ridiculous as it may sound, people do fall prey to this form of pyramid scheme. Furthermore, it is illegal as well, and you run the risk of being charged for fraud.
Affiliate Marketing Scams
To put it simply for the beginners and the untrained, affiliate marketing is nothing but referral marketing of sorts. Businesses selling goods and online services pay out a commission to their “affiliates” when they direct a customer towards the business’ website. Affiliate marketing is a legitimate business model that has worked tremendously for a number of entrepreneurs online. There are billions of dollars made collectively every year in commissions by affiliates all over the world.
Naturally, everyone looking to generate a stream of passive income is attracted to the idea of affiliate marketing. And that’s the mindset that scammers like to prey on. These scams clearly fall in the second of the two broad categories of internet business scams we discussed earlier. Let’s look at some of the common ways that this type of scam is being carried out.
Fake Training Programs
Affiliate marketing is not something that you just jump into. Most people undergo some training before they begin this type of marketing. Scammers know this simple fact. You will come across a plethora of training courses, webinars, e-books or online courses that will offer to teach you the ins and outs of the industry and set you on a “fast track” to start making money.
But most of these alleged training programs do not provide the value they claim to provide. In fact, it’s very unlikely that you’ll learn anything from these “resources” at all! Mostly, it will be all the free advice that’s already available on the internet regurgitated in the form of an e-book or video lessons, etc. Therefore, it is imperative that you conduct thorough research before making such a decision and get your training and advice from an established name.
For more on this subject, check out this extremely helpful free guide.
Offers to Get Rich “Quick”
Affiliate marketing is a legitimate business; there’s no doubt about that. Almost 85% of businesses use affiliate marketing programs as an effective marketing tool. However, the only reason that this legitimate form of online business is at times looked at with suspicion is that the internet is flooded with scams that offer you to “get rich quick.”
Some will promise you that you can make double-digit profits overnight using affiliate marketing, while others will tell you it can be done in a week working only 2 hours a day. Affiliate marketing, just like any other business, requires an investment of time and effort. So do not fall for such outlandish claims.
There Is No Product or Service to Sell
Affiliate marketing works by promoting or referring a product or service of a legitimate company to its customers through your online channel.
It is true that a company may offer high rates of commission, especially when it comes to digital products, but if a company is offering you a high rate of commission without a concrete product or service, it should be a major red flag for you.
The scam works by asking for payment to join the affiliate marketing program. You make the investment, and the money is passed around these pyramid schemes. Not only is this illegal, but you obviously lose your money as well.
Scams based around the online business of affiliate marketing are quite common. If you want to know more about the scams in this industry, here’s a particularly useful link.
A Few Basic Rules to Go By If You Want to Avoid These Internet Business Scams
Now that you know about the prevalent internet business scams, the next logical step involves taking some measures to avoid them. Let’s look at some of the basic steps you should take when you’re online to avoid falling prey to the scammers out there.
This one is a general guideline and applies to both the broad categories of internet business scams discussed above.
The next time a so-called online employer asks for an upfront payment before they can hire you, ask yourself this basic question: what kind of an employer asks for money from their employees? Such situations only point to one logical conclusion – a scammer! You should look at working from home just like any other job where you work from an office. Do legitimate companies ever ask for payment from a potential employee to hire them?
There is no such thing as a payment for starter material or “good faith” money in the real world when you are dealing with a legitimate business.
Other outrageous claims such as “make thousands of dollars a month doing unskilled work” should automatically trigger your defense mechanism against these quacks as they are simply unrealistic.
When it comes to affiliate marketing, there are high commissions offered for promoting a company’s products, especially if they’re digital products such as software or e-books. However, a commission percentage that too high or too good to be true should be an obvious red flag for you.
Conduct Thorough Research into the Business before You Pay Anything
The best way to do this is by running a Google search. If it’s been in the scamming business for a while, there will be information about it online. You will most likely come across reviews that will tell you whether it is a legitimate business or not. Try a search query such as “business name scam” or “business name fraud” etc.
If the reviews are not particularly implicating, ensure that they have a real address and a landline number. Call on the number or check the address physically.
Some of the warning signs that should serve as red flags for you are:
- The company using a free web hosting service such as Geocities or Tripod. Legitimate businesses have professional looking websites, and a poorly constructed website should serve as a red flag.
- Their email services will be based on free web email services such as Gmail or Yahoo.
Know the Market That the Proposed Online Business Serves
Scammers play on our basic desire to make money or to get rich. So they will sell you business models that will be unrealistic and too good to be true. A novice may fall for such an offer, but you shouldn’t.
All it requires is some online research into the industry and the market that the proposed business model operates in.
Let’s take the example of affiliate marketing related scams that offer you the chance to make thousands of dollars in a short span of time. However, quick research online will reveal to you that it’s not as simple as that and that it requires persistent effort and patience before you can start making money in this line of work. An elucidating article such as this will come in handy when trying to research the market and industry.
The internet can sure be a risky place for novices, but it isn’t all bad. Modern technology and the subsequent evolution of the business landscape have made it possible to earn money online and generate passive streams of income while working from home. Many successful online entrepreneurs have fallen prey to these scams at one point or another, but it didn’t stop them.
By following the basic guidelines provided above, you can avoid the major scams that internet businesses expose you to. If you feel you need to know more about online scams in general, here is a useful link.
As always, we hope you found this article, “Internet Business Scams – What to Look for and How to Avoid Them” both informative and entertaining. If you did, may we ask that you share it with your friends and family through social media. It really helps us a lot and is greatly appreciated!