Feds bust big work-from-home scam
FTC says it shut down operations that conned Americans and Canadians into believing they were buying into a business that didn't exist.
After allegedly taking more than $6 million from Americans and Canadians who thought they were buying into a chance to run a profitable home business, the Federal Trade Commission won a temporary court order to halt the scam and freeze the defendants' assets.
The business idea was supposed to be referring small businesses to lenders. Those who bought into the idea -- to the tune of between $299 and $499 -- were supposed to receive payments for referrals.
The FTC said the scheme used multiple business names and changed locations several times "to avoid detection by law enforcement."
In all, 20 people and eight companies are named in the federal complaint, which seeks to permanently shut down the operations and refund consumers. The original name of the operation was Money Now Funding and was also called Cash4Businesses.
To draw in those interested in the opportunity, those running the operation claimed the referrals could generate up to $3,000 a month and could be done from home. Sales pressure was put on the victims, telling them if they didn't quickly buy in the chance would be lost, the FTC said.
In addition to the fees that were charged in the scheme, the FTC said the group also sold what was supposedly "high quality" leads for businesses. In reality, the FTC said, the lists were simply random lists of names and emails. For that, some of the victims paid tens of thousands of dollars.
The defendants are charged with misrepresenting claims of what participants could earn, violating telemarketing rules by calling people listed on the National Do Not Call Registry, and violating a federal rule that details how business opportunities can be sold.
Business opportunity scams are common and can involve anything from envelope stuffing to vending machine sales to launching websites. The type of opportunities vary, but the game is always the same -- to get you to buy into the deal with the promise you will make money even when there's no substance to the claims.
To learn more about how to tell a real business opportunity from a phony one, the FTC has prepared a primer to show what you need to know before you spend money.
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