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10 Signs of a Home-Based Business Scam

Nobody wants to get caught up in the latest get rich quick scam.  Yet so many people buy home based business ideas and ARE getting scammed. 

We all read those fascinating advertisements that promise to make us millions…and we just want to believe!  However, there are a few tell-tell signs that what we are being pitched is nothing more than a scam.  .

I define a scam as a product or service that does not deliver what is promised, is grossly overpriced, uses “bait and switch” tactics, or is misleading to the general public as to how much money can be made.

Please note that just because a sales letter or home-based business product uses some of these signs does not necessarily mean its a scam.  Many of these tactics are used frequently across the marketing world for many legitimate businesses.  However, when you start getting several of these signs in one sales letter, you better think twice about purchasing it. 

Sign 1:  You Don’t Really Know What Your Are Buying

Sometimes you will read a 4-page description of a home-based business idea…and it never tells you what the idea actually is!  The sales letter promises earnings and gives testimonials, but it never quite says what you will actually be doing from the comfort of your own home.  This is insane!  Never buy anything if you don’t know what it is.  If you just kinda know its an online based work from home system…don’t buy it!  Its probably a scam.

Its so easy to say what a product actually is like: “How to make money decorating cakes” or “How to make money walking dogs”.  I can clearly tell from these descriptions what I will be buying.  But if it says: “Learn the Secrets of This Handsome Gagillionaire and Make Bucket Loads of Money All While Eating Potato Chips on Your Massage Chair”; well then you don’t have a clue what I am trying to sell you…because its a scam! (Although the handsome part IS true).

Sign 2:  WARNING!

The overuse of words like “Warning!” “Stop!” and “Secret” all tend to lead to the same thing…SCAM!  Okay, these words by themselves don’t mean you should run for cover, but if they are overused, you should certainly be on guard.  It seems like scam artists have all read the same book on how to write “sales letters”…so they all use the same phrases.  Again, lots of these phrases are used by reputable companies as well.  However, with a little experience you will start to spot the products that are overusing these words and phrases.

Other words and phrases to be weary of are:

• “Shocking Truth”
• “What you Must Know”
• “Simple”
• “Anyone Can Do This”
• “Secret!” (I know I already said this…I just hate it so much!)
• “Free”
• “Easy”
• “No Experience Needed”
• “No Work”
• “Only an Hour a Day”

Sign 3:  You WILL Make $1 Million!

If a work at home product tells you how much money you will make; its a scam.  There is NO WAY anyone can make a blanket statement and say that everyone will make $10,000 every month if they start any work at home system.  Now granted, when I do my own analysis of business ideas I like to document how much is possible to make from the idea.  However, I would never make any promises or IMPLICATIONS of how much you should expect to make.

That is the big problem with these scams.  If they don’t come right out and say that you will be a millionaire for purchasing their product, its certainly implied.  If most of the sales letter is spent explaining how much money you will make, then its also a sign of a scam. 

Sign 4:  No Effort Required!

Watch out for advertisements that really play into this laziness factor.  Learn this one lesson:  you will NEVER get something for nothing.  These business idea scams will promise you the world while at the same time claiming that you don’t have to put forth any effort!  It couldn’t be any easier they claim.  Just whip out your credit card for $497 and WHAM!..You are suddenly a millionaire!  Don’t let yourself fall into the trap.  They will use all sorts of convincing stories and testimonials, but when it comes down to it…its just a scam for your money!

If anyone claims you can make money without any effort or even hints at this lie; its a scam.  Stay away.

Sign 5:  Hurry!  There’s a Limited Quantity!!

Its one of the oldest salesman’s trick in the book:  “If you don’t buy this second, we might not have any available the next second!”  Any time a salesperson or sales letter tries to push you into a purchase by saying there is a limited quantity, or they can only honor they’re “special offer” for another 30 minutes…big red flags should go up in your brain.  The red flag should read:  “Am I getting scammed?”  The most likely answer to that question is “Yes.”

A time limit or limited quantity are implemented by sales people to make you purchase on impulse.  They want you to buy with emotion.  They don’t want you to speak it over with your spouse or make any other rational decision.  After all, if you were thinking rationally why would by a piece of crap tied with a bow for $197? 

Sign 6: Dear Friend…

If you are reading the latest get rich quick scam sales letter, it probably starts, “Dear Friend…” and then goes into some personal story about a guy making GaNoodles of money and how he is going to share all of his top secrets with a select few (anyone willing to part with $297).

Now just because you are reading a sales pitch that starts with “Dear Friend” doesn’t mean that you are reading a scam letter…although your chances just went up.  Along with the dear friend, it also probably says:

“From the desk of Mr. Official Sounding Title”

Date:  Today’s Date

The Dear Friend and “from the desk of” tactic come from that same book that all scam artists read from.  I’m not sure where they get the book, but they must all be reading it, because they all use the same lines and techniques.

Sign 7:  Here’s a Picture of My Earnings!

If they have to show you a picture of their earnings, then their product probably isn’t very good.  Again this is a generalization, I admit, but I don’t see a lot of Harvard or Governmental (non-scam) written business plans that are just full of copies of checks with the names whited out.  Real business plans are full of substance; scams are full of fluff.  Pictures and copies of earnings are extremely easy to fake and should NEVER be relied upon when making a purchase decision.

In addition, if the sales pitch includes a bunch of pictures of boats, cars, and private jets; then you know its a bunch of malarkey.  You should be getting the idea here; this is just another tactic to imply that you will be rich and famous next week if you just part with a few hundred bucks. 

Sign 8:  Yellow Highlighting is Everywhere

I don’t know why scam artists love the yellow highlighting, but they do!  These are typical of offers made online.  I’m not sure why or when all the scam artists got together and decided that yellow highlighting would be their “secret code” to let each other know that its a scam; but this yellow highlighting should certainly let you know to be cautious.

Sign 9:  It Seems To Good to be True

If you have to ask yourself, “Could this be true?”  Then, well, its probably not true.  Its probably just another scam business idea.  Stay away.  This is the core of the sales pitch, they will make you almost believe every word they say…and its just seems to good to be true.  Its because it is too good to be true.  Keep your money and run!

Sign 10:  It was going to Cost $1 Billion, but we Lowered it to $197!

Why is it that scams never sell for full price?  They just ALWAYS seem to be on sale!  Its such a good deal!  If you buy now, we’ll sell you this really thick book that has garbage smeared all over the pages for only half-price.  Instead of $400 it only $300, $200!

Watch out for the use of strike throughs (as above) on prices and the huge reduction in prices.  Admittedly this is a business tactic that legitimate businesses use as well; including the famous Ron-co.  However, do you know what you are buying?  Is this forcing you to buy on impulse?  Just be very careful, because even though it sounds like a good deal, it may not be a deal at all.

In addition, (in particular with online scams) they will add on “free” bonuses if you act now!  They will teach you how to make another billion dollars, they will show you the cure to cancer, they will show you where the Lost Dutchman buried treasure is, and they’ll throw in the location of the largest diamond mine in the world for free as well.   

Watch out for the lowered price and “free” add-on tactics; they are typical signs of a scam (when combined with some of the other scams).

Other items to watch out for (for online sales letters in particular): 

• Big Bold Letters at top (usually red)

• No where else to click expect the buy button

• The title is in quotes (why is the title always in quotes?)

• When you click off the website a chat box pops up the says, “Wait!  Don’t leave, we’ll give you a big discount if you still buy it!”

• There’s a 100% Satisfaction Guaranteed Logo that is obviously pulled from Google images (sorry its just overused).

So, there you have it,  10 Signs of a Home-Based business scam.  Over all if it promises you huge sums of money, requires little or no effort, and just sounds too good to be true, then run for the hills because you have a scam artist on your tail!

PS - The use of a PS in a sales letter is also typical of a scam artist.

PPS - When they use a double PS, they really want to scam you.

PPPS - Send me all your money, and your grandma’s too.

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