Business Opportunity Scams

Have you ever been up late at night flipping through the channels because you just couldn’t sleep? Next thing you know you’re watching some toothy, tanned, slick talking guy telling you how you can earn $10,000 per month sitting at home spending only an hour or two per week. We all know these programs as infomercials and don’t be afraid to admit that you’ve watched them too. I know I have many times. For me it’s more of a learning exercise on what to avoid and how to be better sales person.

After all these companies are making millions if not billions of dollars every year. I won’t lie, I’ve fallen victim to a few “As Seen On TV” infomercials and purchased some products. For the most part the products have proven to work somewhat as advertised by eventually fell short of the claims of the program. But fortunately I’ve yet to lose tons of money.

But apparently many folks aren’t as fortunate and have fallen victim to many work at home or home business infomercial scams. I think the problem with most folks is that they lose common sense practices that they would use in the real world or the internet. See in the real world we’ve all been trained to be skeptical of anything that sounds to be good to true. If we feel uneasy about something, we either pass on it, ask for advice or do some research. But TV seems to suspend this for many folks.

I can understand how this happens. You assume if someone has enough money to be on TV and is exposed to millions of people they wouldn’t dare scam people because its out in public view for the world to see and criticize. Unfortunately some of the most shady infomercial peddlers are banking on this. I decided to do some research on some infomercial work at home opportunity that appeared very legitimate based on what I can see in their programming.

But of course I did my due diligence and hit Google and did a search for the company’s name, website + the keyword scam. Jackpot! I got tons of information and read various complaints. I also learned the ins and outs of how this particular infomercial scam operated that I would have never known unless I coughed up my hard earned money. Needless I was very thankful for the information.

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Awesome Auger Reviews

When a popular review site profiled Awesome Auger, these are the comments it received:

Lee from FL writes about Awesome Auger:

Don't bother using it to drill a hole in the ground, it will just burn out your drill. Unless it is a bag of loose soil that you can turn with your bare hands, it will not work. I am not even going to go through the hassle of returning it, just writing it off to another as seen on tv rip off.

EDWARD BARRY from NY writes about AWESOME AUGER:

I ADVISE ALL TO DISPUTE THE CHARGES WITH YOUR CREDIT CARD COMPANY. JUST CALL THE TEL. NUMBER ON THE BACK OF YOUR CARD. IF WE ALL DO THE SAME IT WILL STOP THIS DISINGENUIOUS OPERATION. CUSTOMER SATISFACTION IS ABOUT 10 OR 20% IF THERE WAS A 0 STAR RATING, I GUESS 2%

Brooks from NC writes about Awesome Auger:

They got me too. You have to enter your credit card info before getting far into the website, then they bombard you with offers on what I thought was the way to check-out - can't back-tab, can't get out of the site. I never confirmed purchase, never had any summary of what I was 'buying'. I had to quit the internet to get off the site. 4 hours later they sent me an e-mail 'confirming' my 'order' and writing "BEFORE CALLING PLEASE ALLOW 2 BUSINESS DAYS FOR CUSTOMER SERVICE RECORDS TO BE UPDATED." I've notified my credit card's fraud bureau, and the state's department of consumer affairs. I reported to the fraud bureau of my credit card company.

Barbara from FL writes about Awsome Auger:

Does anyone understand the "DISPUTE" process from your credit card company???? You have "ZERO" liability if you dispute the item in question, send it back and have proof of receipt of sending it back(tracking through UPS or USPS). Please don't get yourselves in a frenzy about contacting the merchant. File a dispute with your credit card company instead. They will get your money back for you with no hassles as long as you have made an attempt to contact their merchant and have returned the item(s). Save yourself heartache and do the above and be done with it.

colton from tx writes about auger:

RIP OFF SCAM ARTIST Funny how the commercial shows a long extension,not two 8 1nch drill bits i could have made in 5 minutes,and the only sent that,where the hell is the drill they advertised,they say i did not click for extra p& h,that was not on the infomercial either,never again,will i fall for something this stupid.will be turning this over to the bbb in texas

You may want to think twice before purchasing this apparent rip off.

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Steam Buddy Rip Off

I called the 800 number as the product I first saw on TV. They advertised for only $19.99 you would get a steambuddy which is what I've been wanting so I don't have to spend a lot of time ironing my clothes in the morning. They offer 4 free gifts if you hurry & order & all for $19.99 but it's an $80.00 value.

When I called it wasn't a live person, just a computerized voice. Each FREE gift that was offered they said click one to add the linen brush for an additional $17.95 plus addtl 6.00 for S&H. They did this with all free products advertised. Basically if I would have pressed 1 for each item they said was free if I ordered at that time it would have been over $100.00! I pressed zero & only agreed to purchase the steamer at the $19.99 plus the shipping which was only $4.95. I was looking at my bank statement today because I transferred enough money in there to cover the charge. It showed a 35.00 overdraft fee my bank charged me because the steambuddy company charged my account $69.95! I have disputed the charge with my bank but am furious I have to wait 2 weeks to get my money back.

They are dishonest & lie. It's a total scam & I'm sure they figure people won't check their statements & can get away with it. I just read they have sold over a million dollars worth of these things so I'm sure you can imagine how. There is noway in the world anyone would be stupid enough to pay this I hope. They say it's an $80.00 value but each item priced seperatly totals well over $80.00. Beware of this company & if you did purchase it, please look back at your bank or credit card records! I just love that they stole money from a young single mother with 3 children... NOT! I wish I could get double the money back for all the hassles I've had to deal with!

Zoe
Blaine, Washington
U.S.A.

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The Shipping and Handling Scam

The shipping & handling scam is one of the prevalent scams within the infomercial industry. If you consider how much it actually costs to ship a product, these companies make a bundle by marking up the S&H costs. And, in a lot of cases, the shipping times are ridiculously slow considering how much is actually being paid to ship it. Most of the companies that have such horrible S&H fees and services do so in order to lessen the financial loss when a refund is initiated.

Most products that you see on TV infomercials have a “30-day Money Back Guarantee.” It’s crucial to note that the “money-back guarantee” essentially means that you can get a full-refund of the product cost (less shipping) if you return the product within 30 days (usually of receiving it, but sometimes the “trial” begins when shipped). That means that whatever you paid for S&H will not be refunded, and furthermore, you’re liable for the expense of shipping your product back. So in some cases, you’ll be out twice the cost of shipping!

And not only is the average cost of S&H extraordinary in this industry, but also the average shipping time painfully long. Take, for example, Scalp Med, a product “regrows your own hair”. If you order a 2-month supply, the package weighs a pound (2 2-oz bottles of Vitadil, 1 4-oz bottle of Nutrisol, and 1 8-oz bottle of Cortex Enlarger), and costs $18.81 to ship, with an expected delivery time of 3-4 weeks. They also offer priority shipping for another $9.95, which cuts the wait to just 10 days or less.

To put that price tag in perspective, if you went to Amazon and paid $18.81 for S&H on something that weighs about a pound, you would get either overnight delivery, or 2-day delivery. Scalp Med’s S&H policy is ludicrous, and it indicates to me that they probably get a lot of refund requests, and are trying to minimize how much they have to give back by inflating the cost of S&H.

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Scams Persist

Though the portion of infomercials making questionable claims has decreased in recent years, scammers are still out there. About 15% of weight-loss infomercials in 2006 included egregious claims, down from about 50% of such ads in 2003, Marinello said.

The decline in deceptive ads is due in part to the Self-Regulation Program's efforts, including requests to advertisers to cease their programming. But some advertisers -- about one-fourth of the remaining deceptive weight-loss ad purveyors, or an estimated 4% of all infomercial makers -- refused to make changes. Marinello said the figures related to weight-loss ads reflect the infomercial industry overall.

Yet with $200 billion in revenues in 2007, the infomercial industry's ship is far from sinking.

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Gergana Koleva, MarketWatch

NEW YORK (MarketWatch) -- It's the ultimate impulse-shopping experience: You see a product advertised on TV as a "free trial offer," so you dial the phone number flashing at you imperatively on the screen.

The next thing you know, your credit card bill arrives with a hefty charge on it. The problem? That free trial ended long before the product was shipped to you.

Unlike typical commercials that aim to impress consumers with an alluring brand image, infomercials push for an immediate purchase. They may seem like a convenient way to shop from home, but think twice before dialing that number. While legitimate companies use infomercials to sell worthwhile products, scammers also tap this form of advertising to make deceptive pitches.

Previously relegated to late-night television, infomercials are now spilling over into regular evening programming and respected daytime fare. One type of infomercial is increasingly common: Shorter direct-retail ads that run an average of 120 seconds.

In years past, "they were considered fringe programming," said Peter Marinello, director of the Electronic Retailing Association's Self-Regulation Program. Launched in 2004, the program is an independent arm of the ERA, a trade group representing companies that sell products via radio, television, and the Internet.

But these days, such ads now appear regularly on daytime and late-night television, as well as on popular evening shows such as Fox's "The O'Reilly Factor," CBS's "60 Minutes" and CNBC's "Mad Money."

"Many viewers get caught off guard when they see these infomercials on a regular TV show as opposed to on specialized shopping channels" like QVC and the Home Shopping Network, Marinello said, and thus may be less likely to question the veracity of the advertisement's claims.

Others agreed. "There's a belief that if an infomercial comes on a network or a popular show like 'The O'Reilly Factor,' it must be legitimate," said Justin Leonard, founder of a consumer forum Web site. "But some of those companies are very savvy and know how to exploit loopholes."

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New Web Ad Privacy Bill Riles All Sides

The first draft of new legislation for online ads pleases neither ad men nor privacy groups.

As concern over Internet advertising and data collection grows, privacy advocates and the Internet advertising industry have been sharpening their legal knives for more than a year. Now two Congressmen have finally given them a piece of legislation they're all too happy to slice apart.

Rick Boucher, D-Va., and Cliff Stearns, R-Fla., released a draft Tuesday of a privacy bill aimed at defining broad new regulations for the data collection practices of online advertising. The bill would require sites to offer easier methods of letting users prevent their behavior from being tracked online, warn users about data collection with a symbol on Web pages and require sites to render anonymous any data they collect after 18 months.

But while those new safeguards are enough to raise hackles in the advertising industry, irate privacy groups say they fall short of their demands, and even represent a deterioration of current privacy protections. "This is very flawed legislation," Jeffrey Chester, president of the Center for Digital Democracy, told reporters on a conference call. "The bill is going to have to be radically revised, or it will face significant opposition from consumer and privacy groups and their supporters."

One of the key battles in online privacy has been over the question of "opt-out" vs. "opt-in": Should users have to agree to have their online behavior data collected, or should sites legally be allowed to track their behavior by default, with an option to stop that collection upon request?

Boucher's and Stearns' bill offers just enough of each approach to please neither advertisers nor privacy advocates. For sensitive data such as telephone numbers, postal and e-mail addresses, social security numbers or financial data, a site would have to explicitly request a user's permission to track and store the information. For tracking of users' paths around the Web for what the bill calls "transactional" or "operational" purposes, sites would be allowed to collect data on users' behaviors without their permission, though they would be required to overtly state on their site with a "seal or symbol" that the page engages in behavioral tracking, and would have to allow the user to prevent that tracking upon request.

The bill also puts strict regulations on tracking users' behavior on mobile devices, an increasing concern as Web-friendly devices like Android phones and iPhones make handsets a new destination for ads. Location-based tracking on cellphones or other portable gadgets would fall under the more sensitive category of data that requires users to opt in before it can be collected.

To Mike Zanneis, vice president of public policy at the Internet Advertising Bureau, the new safeguards sound ill-defined and potentially dangerous to the $23 billion online ad industry. "Opt-in is really the most burdensome privacy restriction that we implement in the U.S.," Zanneis says.

He argues that the data requiring opt-in measures defined by the bill in its current form could include not just names and addresses but also IP addresses and "cookie" files that sites download to a user's browser to note his or her path on the Web. "We know that greater than 70% of all online advertising depends on targeting techniques," he says. "If we have an opt-in standard for cookies, that would impact the vast majority of online advertising, and that's what we want to avoid."

Meanwhile, privacy advocates argue that the bill's exemption for "operational" collection of data--allowing those practices to take place under an "opt-out" rule--gives advertisers far too much leeway. "This bill really adopts an archaic and bankrupt 'notice and consent' regime that we all know doesn't' work," says John Simpson, head of the Google Privacy and Accountability project at Consumer Watchdog.

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