Red Flags of Bogus Business Opportunities

Staten Island business bank places spotlight on FTC warning about fraudulent offers targeting aspiring business owners


Victory State Bank, Staten Island’s only community-based commercial bank, is underscoring the need for advertising professionals to know the warning signs of solicitations with false claims.

The bank is pointing to advice from the Federal Trade Commission (FTC), which says that some ads for business opportunities feature empty promises and false claims that potential entrepreneurs could never realize.

Promoters of fraudulent business opportunities run ads where their targets are likely to see them: in daily and weekly newspapers, in magazines, and on the Internet. The FTC is asking for the help of advertising professionals to help in finding these ads.

Advertising professionals, as well as the public, can spot false business-opportunity claims. Bogus opportunities or promises that have made it into the pages of legitimate papers, magazines and websites have included offers such as:

§  “Work Part-Time from Home.” Most scammers promise an ideal work situation — the ability to set your own hours, be your own boss, or work from home. In fact, this rosy scenario is far from reality for most small business owners. “Be Your Own Boss” “Own a Dealership Today”

§  “Earn $2,000 a month.” If an ad claims buyers can make a certain amount of money, the law says the promoter must give the number and percentage of previous purchasers who earned the income. If an earnings claim is there, but the additional information isn’t, ask for more information: the business opportunity seller may be violating the law. “$50K/yr” “Vending route nets $1,700/wk”

§  “No risk! Guaranteed!” Ads that promise a big payout with little or no risk are usually a telltale sign of a fraud. Legitimate business ventures involve risks — usually in proportion to the promised return. “Huge Income” “100% return on your investment!”

§  “Quick and Easy!” Successful start-up businesses, including franchises, require a lot of work to get off the ground, let alone manage. Only a few are profitable from the start. If ads promise vending locations, they may not be current or high-traffic; the merchandise also may be out-of-date or of poor quality. “Start Earning Today” “Prime locations available now”

If you work for a publication and see such possibly deceptive claims, Victory State Bank suggets that you follow the advice of the FTC by highlighting them for the appropriate person in your company. At the same time, know that many fraudulent business opportunity promoters use more subtle language when making promises, guarantees, and claims that they can’t possibly keep.

By taking a few moments to review the claims made in business opportunity ads, you can protect the reputation of your company — and the consumers in your community.



About Victory State Bank

VSB Bancorp, Inc. (OTCQX: 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 at



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