Use Caution When Attracted To An Online Business Opportunity, Warns Victory State Bank
STATEN ISLAND, N.Y. – Starting an Internet business can sound like a dream: Work from home, set your own hours, be your own boss. But most Internet startups require significant investments of time and money, and many of them fail.
If you’re considering buying an Internet business opportunity, Victory State Bank wants you to know that the promise of big earnings and ideal work conditions is a pipe dream for most.
Regardless of the handful of stories you’ve read about college-age entrepreneurs turning into Internet gazillionaires, Victory State Bank is urging that you pay attention to a warning from the Federal Trade Commission (FTC): “There’s no such thing as a sure thing.”
You may encounter pitches, says the FTC, like “Start your own Internet business;” “No experience required;” “Experts available to coach you” in a variety of places: On the Web and in e-mail offers, infomercials, classified ads, flyers, texts, telephone pitches, seminars, and direct-mail offers.
The FTC, the nation’s consumer protection agency, says that many of these solicitations are scams that promise more than they can possibly deliver. Often, bogus Internet opportunity sales pitches are short on details and long on high-pressure tactics to persuade you to buy before you’ve investigated the offer.
BE ON GUARD
Before you buy any business opportunity, the FTC urges you to do the following:
- Consider the promotion carefully
- Study any disclosure documents
- Interview previous buyers in person
- Do a few internet searches by entering the company name, or the name of the company’s CEO or president, and words like “complaints” or “scam.”
- Consult an attorney, accountant, or other business advisor before you put any money down or sign any papers.
If it claims buyers can earn a certain income, the promoter also must give the number and percentage of previous purchasers who earned that much. If the promotion makes an earnings claim - but the additional information isn't there - the business opportunity seller may well be violating the law.
Under the Business Opportunity Rule, which is enforced by the FTC, many business opportunity promoters are required to provide a document to potential purchasers that includes information about cancellation and refund policies, whether the seller has faced any lawsuits from purchasers or other legal actions alleging fraud, and contact information for references who have bought the opportunity.
This helps reduce the chance of being misled by phony references.
Contact the state attorney general's office, local consumer protection agency, and Better Business Bureau, both where the business opportunity promoter is based and where you live, to see if complaints are on file. While a complaint record may indicate questionable business practices, a lack of complaints doesn't necessarily mean the company – or the opportunity – is legitimate. Unscrupulous dealers often change names and locations to hide a history of complaints.
Entering into a business opportunity can be costly, so it's best to have an expert check out the contract first.
Report Possible Fraud
If you suspect a business opportunity promotion is fraudulent, report it to the attorney general's office in the state where you live and in the state where the business opportunity promoter is based. You should also report it to the FTC. File a complaint online or call toll free 1-877-FTC-HELP (1-877-382-4357).
About Victory State Bank
VSB Bancorp, Inc. (OTC: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com.
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