State cracks down on work-at-home scams

SACRAMENTO
December 13, 2006 12:00pm

Some promise riches by selling hypo-allergenic cats. Others say the gold at the end of the rainbow is found in renting margarita machines.

These and other apparent work-at-home scams are being targeted by the California Department of Corporations along with tn other states and the federal government.

Dubbed “Project FAL$E HOPE$,” the enforcement actions target bogus business opportunities and work-at-home scams. The crackdown includes more than 100 law enforcement actions by state and federal agencies in 11 states.

The DOC is taking action against illegal franchise businesses that offered or sold business operations for hypo-allergenic cats, home delivery of pet products, rental of margarita machines, mall coffee kiosks, blended juice cafes, health fitness and nutrition centers, among others.

“The registration requirement of California’s Franchise Investment Law helps prevent misappropriation, mismanagement, and misrepresentation in connection with the offer and sale of franchises,” says California Corporations Commissioner Preston DuFauchard.

There is no free lunch, say the enforcers.

“Bogus business opportunities trample on Americans’ dreams of financial independence,” says Federal Trade Commission Chairman Deborah Platt Majoras. “If a business opportunity promises no risk, little effort, and big profits, it almost certainly is a scam. These scams offer only a money pit, where no matter how much time and money is invested, consumers never achieve the riches and financial freedom promised.”

A new guide for publishers offers them help to screen out deceptive ads for business opportunities. The alert, “Ads for Business Opportunities: How to Detect Deception,” suggests advertising sales staff to give an extra look at ads that make claims such as:

• No risk! Guaranteed

• Quick and Easy!

• Earn $2,000 a month

The alert warns that legitimate business ventures involve risks, start-up businesses require a lot of work to get off the ground, and that the law requires earnings claims in ads be accompanied by the number and percentage of previous purchasers who achieved the income.

Copyright Central Valley Business Times © 2006

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