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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.

By Mitch Lipka Sep 27, 2013 6:33PM

Image: Man holding out empty pockets. (© Dougal Waters/Photodisc/Getty Images)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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2Comments
Sep 27, 2013 9:25PM
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Without the single payer option, the present healthcare bill is a joke.  Obama kept giving republicans what they wanted...no single payer, tough abortion wording, drug companies to not be controlled as in the VA, and he did all this because republicans said they couldn't support the healthcare bill unless he compromised.  He did...gave up nearly everything that would have been good, and in the end didn't get one vote from republicans and so a flawed healthcare bill was passed.  Until we copy the rest of the industrialized world with national healthcare, we will have the highest cost per citizen with the poorest outcome and shorter life expectancy.   Our life expectancy pales to insignificance to Norway, Denmark, Sweden, Germany, Luxemborg, Japan, etc etc. etc and yet our medical costs are way way higher.  That is because our system is based on doctors making more money the more times they see you instead of as in those countries where doctors are rewarded with bonuses when you get better.  I have experienced both systems, and ours is terribly flawed with good healthcare reserved for politicians with no deductible insurance and unlimited access and the very wealthy, while the rest stagger around dying younger and lowering our life expectancy to what now?  Is it 30th in the world?  Canadians coming to America for something many times come on the nickel spent by Canadian govt medical system.  What the other industrialized nations don't have is a giant  insurance bureaucratic nightmare that has never treated a patient in their life but yet requires doctors, hospitals, dentists,  to have large staffs to deal with nothing getting payments improved by these insurance companies and passing the costs on to the patients.  Taiwan probably has the best of the systems today.  People see doctors far more often to insure they don't get sick.   Here in America, loads of people don't see a doctor until they are carted off to an ER from a $1200 ambulance trip. 
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