By Mark Ruthenberg, Advantage Tech Inc. and TransCanada FoundLocally Inc. Many folks misunderstand LinkedIn and…
We see, surprisingly regularly a number of businesses that appear to be scams, trying to use our site to reach an online audience. Over the years, we’ve learned to appreciate honest disclosure by businesses about the products or services they are selling, and have developed a keen eye for signs of “scams”. We figure, sometimes, simple inattention in writing the listing description may cast some doubt on a listing’s legitimacy, so we send an email requesting clarification. When we get no response within a week, these listings are quickly deleted from our Human Review Queue (and with customer service like that, who wants to do business with them?). The public never sees these listing attempts, which ensures the quality of our site’s businesses directory.
The business listings that typically fail to make it into the FoundLocally directory include pyramid schemes, work from home schemes, and over-aggressive multi-level marketers.
The most common type of listing we turn down is the Pyramid Scheme, where early suckers help lure in later suckers. These do not have to be Bernie Maddoff scale to be considered illegal (even HE had to start somewhere). The Criminal Code defines this as a scheme where distributorships are sold for outrageous amounts, often to the exclusion of actually selling product to end-consumers. When there is a high up-front fee, the only way to recover it is to convince others to pay you their high sign-up fee.
For us the tip-off is, when a listing says “earn big money fast, with new business opportunity” without disclosing what the product is. They say the product is such a “big secret” because they need to talk about the income/business opportunity first. Then the likelihood is high it’s a pyramid type scheme.
The Flip Side: Most multi-level marketing companies are quite legal because their start-up costs reasonably cover the cost of items needed for a samples inventory and other supplies. And they know that to build long-term profitability, they need people to want to buy their high quality product.
The second most common kind of scam is the Work At Home scheme. These can also be marketed as “independent job opportunities” or “Jobs for Moms”. When schemes offer high income with no work, no sales, and no effort, it usually is “too good to be true”. When they offer to get you in “at the ground floor” these are invariably also a pyramid scheme, under the Criminal Code, since they are typically growing by selling distributorships and sub-distributorships, not by selling real product. And, yes selling (or more realistically, conning your friends and relatives) is required if you plan to recover your bad investment.
We’ve also seen some ‘employment” scams where the ads sound like they are offering jobs but really are trying to sell a book[let] of potential employers names. FoundLocally’s entire Business Directory and Jobs Board gives you that, totally free!
The Flip Side: Most work at home businesses succeed because their owners like the convenience and flexibility of working from home, without the hassles of commuting to work, and letting them be close to family, children and pets. The income earned is important but secondary, and often a result of their improved mental health which translates to better customer relationships.
FoundLocally exists to connect local consumers with local vendors. People don’t come to our site for a quickie business opportunity (these schemes seem to get through Kijiji’s filtering and Craigslist’s), but are looking for local suppliers of goods and services. We only accept vendors who clearly disclose what product or service they are selling, and who’s description clearly indicates that is the core of their business, with sub-distribution welcome. But not the other way around!
The third kind of business, that we used to get lots of listing attempts for, is an overly aggressivemulti-level marketing person, who tries to list in every city where he/she would like to have sub-distributors. Over the years, we’ve added filters requiring local phone numbers and addresses for each listing, so this kind of abuse has been stopped at the Free Listing screen.
We will even work with multi-level marketing organizations to create a template, which speeds (even eliminates) the selection of categories for distributors of that organization, and improves everyone’s consistency and findability.
Write your PROFILE page to focus on the products or services you sell. “Business Opportunity” is not an actual product or service. Use the CATEGORIES page to select the categories that are appropriate to your product or service. You can post opportunities to the JOBS tab, which allows employment and independent opportunities to be posted (as long as they are clearly and honestly disclosed)
Consumers Can Post Feedback
Consumers can post their RATINGS & REVIEWS of your business listing. Most business welcome customer reviews. For legitimate businesses, this helps Word of Mouth spread faster, and businesses can use FoundLocally to invite their happy clients to post reviews.
On the other hand, where site visitors find a listing that turns out to be a scam, they can post an adverse review as well. FoundLocally monitors all reviews, and reserves the right to delete listings that do not meet our requirements.