Consumers often invest in a business opportunity because it sounds like a great way to make a big profit. In reality, you’re likely to discover that your earnings are much less than what the company promised.
Follow these tips to avoid buying into a bad business opportunity:
- Check out the company offering the business opportunity by calling the North Carolina Attorney General’s Consumer Protection Division at (877)-5-NO-SCAM. The Consumer Protection staff can tell you about complaints filed against a particular seller and give you information about business opportunities in general.
- Be aware of your right to cancel. If you attend a presentation in a hotel or other off-premises location, North Carolina law allows you three days to cancel the contract. If the contract does not specifically state this, you should not get involved.
- Read the information and the contract carefully. Business opportunity sellers must give potential buyers detailed information about the business including information about any training the buyer will receive, a copy of the company’s current financial statement, and the number of buyers who have actually earned the amount the company claims can be earned.
- Know what you’re signing before you sign it. It’s best to talk to an attorney before you invest in any business opportunity.
- If the business opportunity includes equipment, make sure you know whether you’ll buy or lease it. Business opportunity buyers often sign “finance leases” that can’t be cancelled, making you responsible for monthly payments for equipment long after the person who sold you the business opportunity is gone.
- Be suspicious of high earnings claims that sound too good to be true. Check with several people who are current investors in the business opportunity to find out how much they’re making. Keep in mind that some of these “references” may be paid to provide false information.
- Beware of anyone who pressures you to make a quick decision or claims that the opportunity may go to someone else if you hesitate. Sellers of fraudulent business opportunities know that a cooling off period means that they will lose a sale.
- Do not invest more until you have made a profit. Many companies offer buyers discounted prices to increase their business soon after they first buy into the business.
- Be realistic. If the high profits promised were true, wouldn’t everyone be buying into this opportunity?
We Can Help
If you have a complaint about a business opportunity, contact us for help or call toll free within North Carolina at 1-877-5-NO-SCAM.
Watch our video Risky Business to learn about investments that can wipe out your savings, or financial instruments that make money for a slick salesman while making your funds hard to get your hands on.