Internet Business Guide

How do you define the word “scam”?

Dictionary.com defines scam as a fraudulent business scheme; to deprive of by deceit; “He swindled me out of my inheritance”; “She defrauded the customers who trusted her”; “the cashier gypped me when he gave me too little change”.

A more accurate term when it comes to buying an Internet Business Opportunity is material misrepresentation. This is different than an Internet business owner puffing about their business to capture your interest and your dollars. More specifically this article series defines scam as intentional misrepresentation.

It seems it’s been a while since any web site wrote about Internet Business Opportunity Scams, because if you search Google for the keyword phrase Internet Business Opportunity Scams the top position in the SERP (search engine results page) is an article written in 2002.

We’re in 2007 and the Internet world of scams is a whole lot different than in 2002. You still do have the micro sites(single page web sites) pitching the latest way to make Internet millions simply by buying their $39.95 e-book; which proliferated in the early 2000s when the search engine algorithms were unable to detect them and eliminate them from the top of search engine results. However, the scams of 2007 are much more sophisticated and harder to uncover by the first time Internet Business Opportunity buyer.

This is not intended to discourage you from starting or buying your home-based Internet business, but rather to provide you a heads up about the too-good-to-be-true, Internet business scams being pitched in 2007.

My background is 20 years online/Internet. I’ve completed more than fifty Internet business buy/sell transactions; and fortunately only once was I caught off-guard by a scam, or better said, an intentional misrepresentation.

It was a case where the seller misrepresented to the buyer the source of sales. The seller represented that all sales were conducted solely by means of the Internet. After Closing the buyer’s revenue from the web site went from ~$50,000 per month to below $1,000 per month. The sales, when reviewed during due diligence, were real as the credit card charge and the merchandise shipping could be verified by the documents. What was not revealed by the seller was that the majority of sales were being taken by phone. I now require any Seller I represent to sign a warranty that 80% or more of the sales of the business are conducted over the Internet; without the aid of phone, postal mail, or other means of communicating with the customer.

To be clear, in the past five years as an Internet Business Broker I’ve been presented many Internet business by owners who want me to represent them in the sale of their business. After an initial review I declined to represent them in the sale. Some were simply a first time Internet business entrepreneur who poured tens of thousands into developing a web site to make money online. When I asked what are the revenues; the answer they provided was my site has GREAT POTENTIAL for making money online. In other words they started an Internet business, spent huge sums of money, made no sales, and want to recoup their investment by selling it to someone else for what they have invested, plus a premium. You will find this as one of the most common reasons for scams, or better stated intentional misrepresentation. You will usually find this type easy to identify, when you ask for the books and records. However, it is harder to identify when the seller has created a set of bogus books.

SCAM, the acronym, means Spare Capacity Assignment Model. Use the information in this article series to avoid the scams by filling your spare capacity with knowledge. Perhaps something in my 20 years in this industry can help you make money online and avoid the scammers.

Finding genuine money-making home based Internet business opportunities is easy as there are thousands of successful Internet businesses. Your first acid test to avoiding scams is if it sounds too good to be true, investigate more. The reason I wrote investigate more, rather than it probably isn’t true, is because I’ve reviewed many Internet business opportunities for sale that really are almost too good to be true, but were true. You can identify these on first pass by time in business. If the business started prior to 2000, and has been increasing revenue almost every year, then it probably is one if the sounds too good to be true, but is true Internet businesses.

For example the seller of Super Blogger actually only works about four hours a month and makes almost $240,000 in profits each year. Primarily because he has been around so long that he is at the top of search engine results for hundreds of keywords. He makes money by placing Google Ads on his hundreds of search engine indexed pages.

Your key to identify the true too good to be true is to verify the age of the business. Many scams do not survive more than a few months because they are found out and reported to private and government agencies. You can uncover these scams by searching information from the Federal Trade Commission, the Better Business Bureau, the National Association of Attorneys General (NAAG), the Small Business Administration (SBA), the Internet Crime Complaint Center, Internet Fraud Watch, and The Ripoff Report which has identified over 250,000 online scams. One other mention is eConsumer.gov which is a reporting and information center for cross-border scams; a joint project of consumer protection agencies from 21 nations.

In the next article of this series I’ll go deeper into using these sources to avoid being taken by a scam when paying your money to buy an Internet Business Opportunity. I’ll also review those infomercials on TV that tout making millions from buying their business plan, or opening your store on eBay to make money online. I’ll also reveal one scam that pitches you don’t even need a web site to make money with our business plan. If you are stumped on that one, it is done by sending out millions of emails with a link to the vendor’s web site. To buy and download the vendor’s How to Make Money Online ebook. I’d actually think one of these scam vendors would have a one page ebook for $39.95; and on the page the single sentence of the book would be, “Next time buy a legitimate ebook and not be scammed paying $39.95 for this worthless book.” Of course, some sorry buyer will probably go to eBay, post an auction for this book at $59.95, to recoup their money, plus make a profit!

Should you want to learn more about Internet Business Opportunity Scams post a comment or question below. Or email me. With over 20 years in the online/Internet world perhaps I can help guide you to your ideal Internet Business Opportunity.

Articles of This Series:
Part One: Internet Business Opportunity or Scam?
Part Two: Internet Business Opportunity Scams | TV Infomercial Pitches
Part Three: Internet Business Opportunity Scams | Email Pitches
Part Four: Home Based Internet Business | Plays, Puffs, Profits