A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

May 1, 2003.

BUSINESS FRANCHISES

Attribution: Federal Trade Commission

A franchise is a business whereby the owner licenses its operations—along with its products, branding, and knowledge–in exchange for a franchise fee.

Buying a franchise involves a major financial outlay and owning one often requires an “all in” lifestyle commitment.

For many people, buying a franchise has proven to be a good choice, but like any other financial decision, there is no one-size-fits-all answer to the question “Is a franchise right for me?”

Here are factors to consider as you investigate franchise opportunities, debunking myths and misconceptions about becoming a franchisee:

Myth #1:  Being a franchisee is the same as owning your own business. Owning a franchise isn’t the same as being a business owner. In fact, the franchisor may control many aspects of your business – for example, your site location, your sales territory, the design of your retail establishment, and the products or services you can (and can’t) sell. Of course, the right franchisor may assist you with training and expertise, but that help comes with a price both in terms of finance and control.

Myth #2:  Buying a franchise will give you “be your own boss” status. After years of earning a salary, many prospective entrepreneurs look to franchise ownership as a way to exercise autonomy. Not so fast. Franchise agreements often give franchisors authority not only over big-picture decisions at the outset, but also over some day-to-day operations – how you can advertise, what your sign must look like, where you buy supplies, etc. If part of your motivation for considering a franchise is to live that “be your own boss” lifestyle, investigate thoroughly first.

Myth #3:  Liking a company’s products is the best indicator that you’ll achieve success as a franchisee. Successful franchisees often say it helps to like the product or service, but being a satisfied customer is no guarantee that a franchise is the right fit for you. Some franchises – say, auto repair or tax preparation – require technical expertise or special training. Are the skills you bring to the table a good fit for the franchise? And has your previous work experience given you the financial and management know-how essential for success?

Myth #4:  Owning a franchise is an excellent source of passive income. Who unlocks the shop several hours before opening, turns off the lights at the end of a very long day, and is there in between to handle payroll, customer service, and maybe even routine maintenance? It’s often the franchisee. Even franchisees who choose to hire day-to-day managers will likely find that owning a franchise involves a major commitment of time, effort, and resources.

Myth #5:  Owning a franchise is a financial “sure thing.” The only sure thing in franchising or any other business model is that there’s no such thing as a sure thing. Spending your nest egg for a national name isn’t a guarantee of success. Certainly, your skills and commitment factor into the equation, but so do a lot of variables beyond your control – demand for the product or service, competition, and local and national economic conditions, to name just a few. What’s more, under your franchise agreement, you may have to pay the franchisor even if you’re losing money. Those are just some of the intangibles to consider if you’re thinking about a franchise.

If you’re thinking about whether your future could be in a franchise, follow the FTC Business Blog for a series we’re calling Franchise Fundamentals.

Read A Consumer’s Guide to Buying a Franchise for more information.

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California,

April 26, 2023

JOB or BUSINESS SCAMS

Attribution: US Federal Trade Commission

Scams show up as offers to help you start your own business or earn big bucks working from home.

Typical pitch: You got the job! Work from home and earn top dollar.

Scammers may have already sent you a big check to “buy supplies”.  (“Send us whatever is left, probably around $1,000,” they said.)  This dream job has earmarks of a scam.

There’s no sure-fire way to detect business or job opportunity scams, but these steps can help you decide whether an opportunity is the real deal or a scheme to get your money and personal information:

Do your own research. Don’t accept any job offer until you’ve checked it out. Scammers pretend to be both well-known and smaller companies, posting jobs on employment websites. So, reach out to the company directly using contact information you know is legit.

Never bank on a “cleared” check. No honest employer will ever send you a check and then tell you to buy supplies, gift cards, or something else and send back whatever money is left. That’s a fake check scam. The check will bounce, and the bank will want you to repay the amount of the fake check.

Learn more at ftc.gov/JobScams. And, if you spot a scam, please tell us at ReportFraud.ftc.gov.

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

April 19, 2023.

FUNERAL SERVICE FRAUD

Attribution: Federal Trade Commission

When families need to plan a funeral or cremation service, especially in an unfamiliar place, they often search online for a local provider. It’s never easy making funeral arrangements.

 Now, help is on the way. Thanks to a court order in an FTC legal case, a person who needs services of cremations provider, can find its prices online and know where it’s located.

The crooks sued by the FTC used online ads to make it look like they performed cremations when they did not; used online ads to make it look like they performed cremations when they did not; made it look like they were local when they were not; and gave grieving people lowball quotes by phone —when the real price was much higher.

Now, a court order says that the crooks and their owners must post price information on their websites. They must give clear information about their (actual) locations — as well as the names, locations, and contact information for the local funeral homes they connect people with. (Info they didn’t so much share before.)

To get help thinking through the steps, and knowing what funeral homes are required to do, check out Shopping for Funeral Services by Phone or Online — which is how many of us shop for just about everything now. And remember: if one funeral home won’t answer your questions or give you the information you asked for, look somewhere else. And then tell the FTC: ReportFraud.ftc.gov.

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A free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

April 12, 2023

RECOVER YOUR MONEY SCAM

Attribution: scambusters.com

Every scam victim wants to get their money back. it’s tempting to respond to a recovery offer that arrives in a message or social media post. Most so-called recovery agents are actually scammers.

Here is how it works:

After you have been scammed out of money or property someone — maybe even the original scammer in disguise — says they can recoup your losses for a fee. Or the crooks say they need more money to cover expenses or taxes. You send money and never hear from them again.

Scammers know the roots of the troubles lie in the fact that the victim has already demonstrated they can be fooled again. Furthermore, the bigger the losses – sometimes entire life savings – the more likely the victim is to clutch at straws to get their money or property back.

Crooks may try to contact you by email, text or even try to connect through social media posts, offering their services. Genuine recovery specialists don’t hawk their business like this. So, if you’re contacted this way, it’s almost certainly a scam.

Red flags:

*A requirement that you pay upfront. Genuine recovery people usually work for a percentage of what they get back or a fixed fee – payable after they’ve succeeded.

*A “guarantee” that they’ll recover your losses, sometimes saying they’ll get the full 100 percent. No one can honestly make such a promise.

*Likewise, they may offer a money-back guarantee – you’ll get your fee back if they don’t succeed. Remember, you shouldn’t have paid them upfront in the first place.

*They claim to be working with government departments, consumer organizations, or law enforcement. They’re not.

*They try to pressure you into acting quickly, claiming that the sooner they get going the better your chances of a recovery. That may be partly true, but it’s not a reason for acting without thinking this through.

*They may ask you not to report the original crime and to keep their service “confidential,” supposedly to avoid alerting the original scammers. Not true. They just want to increase their odds of pulling off the scam.

*They request your bank details, supposedly so they can pay recovered funds straight into your account. But they really want this information to get their hands on more of your cash.

Safeguard yourself:

When you discover you’ve been scammed, perhaps the first thing you should do is try to find someone who can help you recover your losses.

*Notify your bank or any other organization connected with your finances.

 *Always report the original crime to law enforcement, the Federal Trade Commission (www.ftc.gov), and the Internet Crime Complaint Center and follow their advice.

*But don’t tell the world via social media. That’s where crooks look for leads.

*Never pay upfront. And you should never send payments by untraceable methods, such as wiring cash or using Bitcoin.  *Instead, if you believe you’re working with a genuine recovery specialist, arrange for money or property to be transferred to a third-party escrow agent, who will deduct the agent’s and their own fees and then return the balance to you. But only use an escrow company you have selected yourself, not one the scammer suggests because that could be another scam!

*Don’t rush. Take the time to research any recovery specialist you’re thinking of working with.

*Read the small print in any contract or other documentation they provide.

*Ask for references from past customers and check them out yourself. And check if they’re registered with the Association of Certified Fraud Examiners.

Your best chances of getting your money or property back are probably from organizations like US Federal Trade Commission (FTC.gov) and the Consumer Financial Protection Board (CFPB.gov) who sometimes recover widespread scam losses and return them to victims.

As an alternative, your best route is to consult an attorney or even a private investigator. But, again, do your research and make sure you know their fees ahead of time. If it’s too expensive, you may just have to accept your losse as a learning experience (beyond reporting them as above).

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A free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

April 3, 2023

BIOMETRICS SCAMS

Attribution: scambusters.org

Biometrics is the technology of using facial, fingerprint, and voice recognition to confirm your identity. It may promise to improve security and maybe even replace passwords.

Security pros say we will all soon be using fingerprints, facial, eye-iris, voice recognition, and other forms of biometrics, even DNA, in place of passwords.

Scammers and hackers have developed software and theft techniques so they can use biometrics and pretend they are you. Millions of public biometric records are reported for sale on the Dark Web for as little as $5.

How is Biometric Data Stolen?

The biggest haul of stolen fingerprint, voice, and facial records comes from hacking the systems that store them. It happened  going back to 2015 when the US Office of Personnel Management was hacked, giving access to fingerprint data of 5.6 million people.

Social Media

More worrying from a public perspective is the amount of biometric information we give away freely on social media – from high resolution photos and videos on Facebook to pictures of eye makeup that users posted on TikTok. Experts have shown that these images can be used to trick victims. By posting photo and video content, we expose our faces, retina, iris, ear shape patterns, and in some cases, palms and fingerprints.

Things you can do to reduce the risk of being victimized by the hackers and tricksters include:

*Use two-factor or multi-factor authentication (2FA and MFA) on every site that allows you to.

*Think twice before you provide your biometrics to anyone. Why do they need it? How do they secure it? Note: This is quite different from providing fingerprint or facial images on a mobile device. Thart data is stored securely on the device, not on a hackable server somewhere else.

*Protect the sources of biometric data you carry around with you, like passports, driver’s licenses, and Green Cards.

*Monitor all your accounts, credit scores, and records for evidence of unusual activity. Since biometric hacking, just like password stealing, is mainly used for identity theft, at least you’ll know sooner and act faster if you regularly check these.

*Use a Dark Web monitoring service to see if your ID information, including email addresses, passwords, and biometrics, have been exposed. Some Internet security software includes this as part of or as an add-on to their services.

*If you want to check now, for free, on the Dark Web, you can do so at https://scan.aura.com/. Note that the provider, security firm Aura, offers a paid monitoring service but you don’t need to sign up for this.

Unlike passwords, you can’t change your biometric data if it gets stolen. If that happens, it could affect you for the rest of your life.

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

March 30, 2023

TORNADO DAMAGE SCAMS

Attribution: US Federal Trade Commission  

Every time there is a natural disaster — like the tornado that tore through Mississippi and neighboring states — scammers are quick to follow.

If you are in a disaster relief area designated by FEMA, there’s legitimate help on the way. For example, if you are in a qualified area, the Internal Revenue Service (IRS) will extend many of its filing and payment deadlines until July 31, 2023. To see if your area qualifies, visit the disaster relief page on IRS.gov.

Disaster recovery scams come in many forms, but mostly these scammers pretend to offer legitimate help.

Here are some ways to guard against these scams:

*Ask for government official identification. Scammers might pretend to be safety inspectors, government officials trying to help you, or utility workers who say immediate work is required.

*Ask for individual identification to verify who you are dealing with — before sharing personal information like your Social Security or account numbers.

*Don’t pay to apply for FEMA assistance. If they say you need to pay to qualify for FEMA funds, it’s a scam.

*The best place to get information from FEMA is from http://www.FEMA.gov or by downloading the FEMA Mobile App to get alerts and information.

*Look out for clean-up and repair scams. Unlicensed contractors and scammers may appear in recovery zones with promises of quick repairs or clean-up services. Walk away if they demand cash payments up front, or refuse to give you copies of their license, insurance, and a contract in writing.

*Steer clear of rental listing scams. Scammers know people need a place to live while they rebuild. They’ll advertise rentals that don’t exist to get your money and run. Never wire or give money for a deposit or rent before you’ve met a legitimate person and signed a lease. 

Visit ftc.gov/WeatherEmergencies for more, and report weather-related scams to the FTC at ReportFraud.ftc.gov.

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

March 21, 2023

PUPPY SCAM

Attribution: American Kennel Club

Almost everyone uses the internet for shopping, including finding a new puppy!

What is a Puppy Scam?

Puppy scammers post fake litter pictures online, or pretend to be someone they are not, to take advantage of puppy sales. This means that you could find the perfect puppy, send the ‘breeder’ your money, and never receive a puppy or any follow-up communication in return.

What are the Red Flags?

*No phone calls. The seller prefers to handle communication by email and not the phone. A reputable breeder will always communicate with you via phone or video chat (if not in person) before selling you a puppy.

*Copycat or stock photos. Photos of the dog or ad text can be found on multiple websites. Search for the text in the listing to see if the seller copied and pasted it from another site.

*Sketchy payment. The seller asks for wiring of money or payment by gift cards. Be aware that if you choose a non-secure method of payment, it is highly unlikely that you will get your money back.

*Avoid paying a stranger using apps such as Venmo, as it is harder to get your money back if you don’t get what you paid for.

 *Paying by credit card or PayPal are typically the safest options.

*Price is too good to be true. Research the prices for the breed you are considering ahead of time.

*Breeder “badges.” American Kennel Club does not distribute badges to breeders.

*Ensure that before receiving your puppy, you receive documentation of your dog’s papers. The words “American Kennel Club” as well as the AKC logo should be clearly visible. If the breeder or puppy seller hesitates to give you papers, this is usually a warning sign.

How Can I Safely Find a Breeder or Puppy Seller Online?

The AKC Marketplace is one of the best places to start your search for a puppy, if you are vigilant about warning signs. AKC Marketplace conducts

thousands of kennel inspections a year and is the only online resource to exclusively list 100% puppies from AKC-registerable litters. If you find anything suspicious while searching for a dog on AKC Marketplace, report the details to akcmarketplace@akc.org.

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

March 18, 2023

FALSE HEALTH CLAIMS

Attribution: US Federal Trade Commission

If you or someone you love is struggling with addiction or dealing with a serious disease like cancer, Parkinson’s, or Alzheimer’s, you have probably looked for the best treatment available. But how do you know if promises about treatments and recovery are true?

Some alleged health care providers say they will cure all kinds of diseases and addictions — without reliable scientific proof.

Misleading ads promise a painless recovery from a variety of addictions — from drugs and alcohol to food and gambling. For cancer patients, they promise that most patients would get back to work and regular social activities, even becoming cancer-free after visiting a clinic.

Before you say yes to any kind of specialized medical treatment:

*Talk to your doctor or healthcare professional.

*Search for the name of the treatment or product online, plus the words “review,” “complaint,” or “scam.” See what others are saying.

*Know that no government agency approves ads about medical treatments before they go public.

Read more about common health scams. And if you think a company is making false health claims, report it to the FTC at ReportFraud.ftc.gov.

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

March 7, 2023

HOME WARRANTY SCAMS

Attribution: US Federal Trade Commission

What exactly is a home warranty?  It is essentially a service contract.

There are different types and options depending on the company and amount you pay. Some home warranties typically cover replacements and repairs for things like appliances or air conditioning systems. They last for a limited amount of time — unlike builder warranties of new homes.

When looking at the details, you may find that a home warranty duplicates coverage you already have. Or covers only part of a product. Or makes it nearly impossible to get repairs done when you need them.

Some things to think about before committing to a home warranty. Read the “fine print”:

*Is it likely to save you money? Consider both the upfront cost and costs that may be hidden, like deductibles or fees you need to pay each time products are serviced.

*What are the limitations? Are there limits on the amounts you can be reimbursed? Is accidental damage covered? Are certain appliances or systems not included? Are there restrictions or fees for cancellation?

*Does the claims process seem difficult or slow? Waiting a long time to get paid back can reduce the value of having coverage.

*Does the company have a good reputation? A home warranty is only as good as the company responsible for coverage. Search for the name of the company and words like “review” or “complaint” to see if people have had issues in the past.

Use caution when receiving unwanted calls about service contracts. Those might be telemarketers looking to trick you out your money or personal information. 

If you have had a bad experience with your home warranty, tell the FTC: ReportFraud.ftc.gov.

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A Free Public Service

February 28, 2023

 EYE DOCTOR SCAM

The FTC recently sent 24 cease and desist letters to eye doctors after getting reports they may have violated the Contact Lens Rule by ignoring important rights of patients. That includes the requirement that eye doctors must give you a copy of your contact lens prescription at the end of a lens fitting — whether you ask for it or not — at no extra charge. This means you don’t have to buy your lenses from your eye doctor and lets you use your prescription to comparison shop among contact lens sellers for the best deal.

Here’s how the process is supposed to work. If your eye doctor is willing to sell you lenses, that means your fitting is complete and you should get a copy of your prescription. Just know that a fitting may take more than one appointment and often involves a fee that’s separate from the eye exam charge.

What’s more, your eye doctor:

*may ask you to sign a confirmation in advance that you got your prescription. Don’t do it.

*can’t make you pay for your prescription, although they may require you to pay for the contact lens examination and fitting fee or show proof of insurance, which is considered payment

*can’t say you have to buy contact lenses from them or tell you to sign a waiver or release in order to get your prescription

If you think an eye doctor is violating the Contact Lens Rule, report it to the FTC at ReportFraud.ftc.gov.

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