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Business opportunity scams

What is a business opportunity scam?

A business opportunity scam can come to you through a spam email, a phone call or a letter. The scammer will always offer you a way to make a lot of money quickly.

Business opportunity scams are similar to pyramid schemes, chain letters, computer prediction software and work from home scams. A business opportunity can be a scam if it relies on you making an upfront payment (for something that does not work or is not what you expected), recruiting other people to the scheme (these are pyramid schemes) or paying for a ‘system’ to make money which may not work as it is supposed to.

Warning signs

  • You receive a spam email offering you a business opportunity.
  • The advertisement requires you to send a fee to get your start up materials.
  • The advertisement only specifies a post office box address rather than a street address.
  • The email or letter may not be addressed specifically to you.
  • You receive information about a job which only requires you to transfer money for someone else.
  • Promises of guaranteed or very large returns.
  • Offers of loads of money just by using certain software to predict share market movements or sporting results (especially horseracing).

Protect yourself against business opportunity scams

  • Remember there are no get-rich-quick schemes: the only people who make money are the scammers.
  • Never agree to any business proposal on the phone: always ask for an offer in writing.
  • Beware of job offers that require you to pay an upfront fee.
  • Money laundering is a criminal offence: do not agree to transfer money for someone else.
  • NEVER send money, or give credit card or online account details to anyone you do not know and trust.
  • You can contact your local office of fair trading, ASIC or the ACCC for assistance.
  • Do not open suspicious or unsolicited emails (spam): delete them.

As well as following these specific tips, find out how to protect yourself from all sorts of other scams.

Do your homework

Before you respond to a business opportunity advertisement, ask yourself why somebody would offer you this opportunity without even knowing you. If someone had a guaranteed way of making a lot of money, why would they tell you about it?

Always investigate money-making schemes very carefully before parting with your money. Take time to seek independent legal or other professional advice.

Don’t rely on the person approaching you or anyone they recommend for advice.

Don’t be enticed by reported past performance or examples, as these advertising tools can easily be manipulated.

Be on the look out for ongoing costs. Many business opportunity scams require you to open accounts or transfer money. You should NEVER give out your personal or banking details to somebody you don’t know and trust. Don’t let the fact that an offer sounds enticing or genuine fool you.

Decide

NEVER reply to an unsolicited or spam email, as this may encourage further contact from the spammers. If you are interested in a business opportunity, make sure you get independent professional advice before making a decision. Remember that if a business opportunity sounds too good to be true, it probably is.

Report them

If you have received information about a business opportunity that sounds similar to the scams described above, or if you have responded to one of these offers and you now suspect or realise it is a scam, you can report a scam through the SCAMwatch website. You should also spread the word to your friends, family and colleagues to protect them.

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What to do if you've been scammed; Scams & the law; Report a scam.

Similar scams:


Employment opportunities that promise huge incomes with little work – usually by asking you to transfer money for someone else or recruit new victims.

Scammers ‘guarantee’ you a job or certain level of income, tricking you into paying an up-front fee for a ‘business plan’ or materials.

High-pressure sales in high-risk investment strategies. Scammers profit through attendance fees and by selling property and investments at inflated prices.

Illegal schemes that always collapse when the supply of victims dries up, leaving nearly everyone involved much worse off.

Unsolicited phone calls pushing high-return and high-risk investments, often in overseas markets. The callers sound professional but are not licensed in Australia.

If you agree to transfer money for someone you don’t know, you let scammers use your bank account to ‘launder’ their dirty money. This puts you and your money in the firing line.

Small businesses can be misled into paying for a directory listing or other advertisement that may not exist or was not authorised.

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