Operators of bogus business opportunity ordered to pay back $25 million

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If you’re looking to run your own business, you might be tempted by ads that claim you can buy into a ready-made business opportunity and make a lot of money. But some companies touting big earnings are promising more than they can deliver, and the FTC is taking action to stop them.

As a result of a recent FTC case, a court ordered The Zaken Group, operators of a bogus business opportunity, to pay back more than $25 million to customers and banned them from selling business opportunities. According to the FTC’s complaint, Zaken claimed that they would help customers find businesses looking to sell their excess inventory and would work with customers to find buyers for the inventory. They also told customers they would make at least $4,000 in the first 30 days – and that the average deal would yield more than $4,200.

Once customers paid a fee of $148 – sometimes more – they were inundated with pitches for more “business tools” costing hundreds or thousands of dollars more. Customers who paid the additional amount didn’t hit pay dirt. Instead, they got a directory of phone numbers for companies that had gone out of business. According to the court, more than 110,000 people bought into this bogus business opportunity and “99.8 percent” of them didn’t make any money.

So how can you evaluate a business opportunity before you buy? Ask the seller to give you a one-page disclosure document. Sellers are required by law to give you the disclosure document so if they refuse, don’t pay them any money. It must include a list of references and other key information about the business. If the seller makes any claims about how much money you might make, they have to give you a separate paper with more details about those earnings claims.

Watch this video to learn what questions to ask to determine if a business opportunity is a scam or the real deal.

And if you think a seller of business opportunity is breaking the law, report it to the FTC.

Blog Topics: 
Jobs & Making Money

Comments

I did business with the Zaken group years ago and paid $149 and got nothing not even my money back when I filed a complaint. Why are they being made to repay people now? What a rip off.

The board of directors and executives must spend time in jail and a lifetime ban on holding these offices again. Thes people are theives and will only do some type of ripoff again. We can only id them with a record of their wrong doing and their reputation.

We need to stop this and simple fines are not enough!

If anyone receives cashiers checks or USPS Money Orders from a Robert McHugh, Damien Johnson, Mike Roy or Robert McDuff, they are a scam.this will cost a person a lot of money if they cash these checks or MOs as they are fraudulent. Be certain that if you sign up on Mystery Shoppers, Inc., that you are on the legitimate website. There is a fake website by the same name and logos.

the 9000 govt grant scam is still going strong and has reached MN. I recv'd a phone call telling me I had been 'selected' to be given $9000 and all I had to do is pay a fee of $200. Caller had very thick middle east or Indian accent. There are NEVER fees connected with receiving grant money. Beware!

Sound like The Coaching Scam / Supplier Source anyone? I'm not suggesting they are affiliated, just that these schemes never seem to end.

who compensate me,i am seriously victim by identity thefts at this time my business is in banckrabcy please help me to reinvest my business.

I want to know why you must file a claim on some of these erronous billing schemes....I think everyone who was billed should get a refund not just those who happend to find out about this and file a claim....

Do you know anything about Click ad work at home schemes? A caller wanted to know if it was legit for her to pay 5.00 per ad and then was supposed to get a return from it everytime someone clicked on it. Sounds fishy to me. Please help? Are there any work-at-home jobs that are legit?

The website payhmm.com is a total fraud not understanding how they are still operating?

I would like to know what recourse we have from bait & switch sellers? What about buying names? How do we know if our complaint has been resolved?

If you think you didn't get the product that was advertised, you can report that to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau

 

 

Don't use the website called "Cash Advance USA" their a scam!!! I applied for a small loan and they called and told me that I was approved for a larger loan. They (who also had heavy Indian accents but one had a regular accent) said they would put money into my account and I would have to withdraw most of it out and go to Wal-Mart and send them the money and then I would be approved for my loan and have it in 2 hours. NOT!!!! What they did was withdraw from my account the same amount by check signed by me and it caused my account to bounce big time and my insurance payment didn't get paid. If you live in NY you can't go 1 second without insurance coverage! So now this is on my consumer report, my bank account closed and I am being held responsible to pay this back. It has made my life a living nightmare!!! PLEASE DO NOT GO TO THIS COMPANY ON THE INTERNET CALLED "CASH ADVANCE USA" AND FILL OUT AN APPLICATION!!! I did make a police report but this company goes from Chicago to California.

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