Phony Business Opportunities Intensifies
The Federal Trade Commission, the Department of Justice and law enforcement officials from 29 states announced Project Biz-illion$, a multi-pronged attack on traditional business opportunity scams that bilk hundreds of thousands of consumers out of tens of millions of dollars a year.
The FTC, the Office of Consumer Litigation of the Department of Justice, state attorneys general and state securities officials have filed over 68 cases against fraudulent business opportunity promoters, many of whom are using the classified section of the daily newspaper and the Internet to peddle pay phone and vending machine routes and work-at-home schemes like medical billing opportunities. These schemes typically promise high earnings. According to the regulators, however, they rarely pan out, and instead, can cost consumers thousands of dollars.
Because many business opportunity offers are pitched to consumers via the classifieds, the FTC and its enforcement partners also announced a partnership with more than 105 newspapers (see attached list) that have voluntarily agreed to run a classified of their own -- one that tells consumers what to look for in a notice for a legitimate business opportunity. The notices refer readers to more complete information from both the FTC and the appropriate state agencies (available at www.ftc.gov/bizop). More than 85 of the newspapers participating in "Project Classified," as this partnership is known, also have agreed to use their best efforts to screen out potentially deceptive ads, including those that make earnings claims without incorporating a disclosure in the ad about the number and percentage of prior purchasers who have made as much as the promotion claims.
"It's very gratifying that so many newspaper publishers across the country have accepted our invitation to join this partnership to educate consumers about business opportunity fraud," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "They are helping us reach consumers exactly when the would-be entrepreneur is focused on the opportunity."