The RIGHT Way To Use The BBB When Researching A Home Business

Most people who think about doing their due diligence about a home business typically thinking of looking at the BBB first. However, in the “home business” and “work at home” arena the BBB OFTEN gets things wrong. In fact the BBB is almost famous for giving “A” ratings to home business companies with extensive complaints while giving F ratings to home business companies with ZERO complaints. If you’ve been researching home business opportunities for any time at all you may well have noticed this bizarre phenomenon.

That being said, the BBB is still very valuable…IF you use it in the right way.  But in fact, most people don’t use the Better Business Bureau site the right way – especially when it comes to using it to research companies in their home business quest. The Better Business Bureau (the BBB) is a bit of a strange animal when it comes to evaluating companies in the home business arena.

Here are a few of the things you need to keep in mind if you are going to use the BBB as part of your due diligence in finding a legitimate work at home opportunity.

1. The BBB often gives a company an F rating merely of “concerns with the industry in which a business operates.” In other words the BBB may know nothing at all about a company and still give it an F rating.
2. The BBB sometimes doesn’t update their information after they get the information they request from a company.  Sometimes the BBB will give a company an F for “failure to respond to basic information”. However, after that person DOES provide the requested information the BBB does NOT update their listing. So even a company with overall great feedback and ZERO BBB complaints will show up as an F rated company on the BBB.
3. The BBB often lumps “home job” companies and “home business” companies under the same “work at home” category. But there are important difference between “home jobs” and “home businesses” when it comes to doing due diligence.  For purposes of due diligence there are aspects of  home job research that have to be treated completely different than a home business sand home business research.
4. As the BBB itself notes,  you have to “take into account the company’s size and volume of transactions, and understand that the nature of complaints and a firm’s responses to them are often more important than the number of complaints.”

Let’s take a look at that last caveat which comes from the BBB itself:

“When considering complaint information, please take into account the company’s size and volume of transactions, and understand that the nature of complaints and a firm’s responses to them are often more important than the number of complaints.”

In other words, all things being equal you should be more concerned about a company with 50 complaints that does 1,000 transactions per month than a company with 500 complaints that does 1,000,000 transactions per month.

However, for various reasons it’s not always possible to know the volume of transactions a company actually does. That’s why it’s usually more important to look at the “nature of the complaints”. In other words if you see that 95% of the complaints against a company are similar in nature – say “failure to honor their refund policy” that’s definitely something to pay attention to and to consider as a red-flag.

Better Than The BBB – YOUR Own Home Business Red Flag List

The following is a list of home based business opportunities red flags to help you evaluate any potential home business opportunities you may be considering. It’s important to understand that red flags are merely “indicators” of potential problems.  However, the more red flags identify for a particular home business opportunity you’re considering the more likely you should avoid that particular opportunity.

Ideally you’ll learn how to use the list on your own so that you can gain the expertise required to evaluate the home business ideas and programs you may come across.  However, if you’re not sure if a particular red flag applies to a program or opportunity you’re considering, then please ask about it in the comments section here.

This list is especially tailored to home business opportunities within the $50 – $200 price range.

Home Business Opportunities Red Flags List

Red flag #1) Home businesses or home business training that promise that anyone can IMMEDIATELY make money fast or make money while they sleep

While it’s true that you can eventually “make money fast” or “while you sleep” in a home business, it is NOT true that you can do it right off the bat. You have to put in real work and build up your business assets first. i.e., sure you can make money fast if you have a list of 20,000 email subscribers you can email a promotion to – and hey, they might even buy while you’re sleeping. What the home business hucksters fail to mention is the amount of time and hard work it will take you to develop and build that email list. The same is true with any asset of real long-term value.

Red flag #2) No contact information on the company’s website – or at least in the terms and conditions page of the company website.

Ideally you can find contact information (at least an address contact form) on a “Contact” page. But at the very least you should be able to find contact information within the “Terms And Conditions” or “Terms Of Use’ page of a site.

Red flag #3) The company is using a non-clickable trust seal or security seal on their website.

When security seals and trust seals are used on a website they are supposed to be clickable so that you can verify their legitimacy through the seal provider’s 3rd-party database. Home business scam sites often will fake many of the more popular security and trust seals – including, but not limited to the BBB, TRUSTE, McAfee Secure, Verisign, Trust Guard, and COMODO

Red flag #4) The Company Operates Out Of Certain Countries

The company operates out of Cypress, Guatemala, or Nevis, St. Kitts – especially if the terms state that the governing law is in one of those countries.

The intent behind this that if a person has a dispute with the company they have to go to Cyprus to settle it. There are ways around it in certain circumstances, but it should be considered  a red-flag.

Red flag #5) The company operates out of Utah, Arizona, or Nevada

Like it or not, a large number of popular U.S. Based  home business scams originate out of Utah, Arizona and Nevada.

Red flag #6) The company uses fake testimonials or or stock photos with testimonials

Online you can use reverse image lookup search engines like Tineye to determine if a picture that goes with a testimonial is a stock photo or is used on other sites. You can use CopyScape to try to find the same testimonial across different websites.

Red flag #7) How the home business is advertised online

How a home business is advertised online can tell you a lot about how likely it is to be legitimate or not. Currently two extremely popular ways of marketing questionable home businesses and downright scams are through fake news sites and fake blogs. Even if one of these types of sites uses an “Advertorial” disclaimer, you should consider this type of advertising a red flag.
Most of these fake news sites and fake blogs can easily be identified by looking for one or more of the following:
•    An “Advertorial” disclaimer
•    A comments section stating something like “comments are closed due to spam”
•    Taking a paragraph of information from the site and running it through CopyScape

Red flag #8) How the home business is advertised offline

If a home business or home business training is advertised in newspaper classified advertising, or in popular “Income Opportunity” or “Business Opportunity” magazines, you should consider this type of advertising a red flag.

Red flag #9) Use of talking actors on an online sales page

A large number of questionable home business opportunities or outright scams have started using talking actors on their sales page. You can the following sites that provide “virtual spokesperson’s” to see if the person talking is who they claim they are (it’s not an exhaustive list, but these are very popular ones):

• LiveFaceOnWeb
• LiveOnPage
• MyVirtualSpokesPerson

Again, remember that this is only an “indicator” of possible problems. There are legitimate reasons to use spokespeople such as these companies provide.  Also, there are many other “virtual spokesperson” sites you can check to see if the person talking on the screen to you is actually who they claim to be.

Red flag #10) Fake review sites

Here are a few red-flags and warning signs to look out for when reading home business reviews.

The main Red-flag/Warning: The home  based income opportunity that is recommended is owned by the person reviewing the opportunity – but the reviewer doesn’t TELL you that. I have no problem with a reviewer recommending his or her own home business income opportunity – as long as they tell you that they are the owner/creator of that home business income opportunity.

Some typical elements for Red-flag/Warning #1 are shown in the diagram below:

Fake Home Business Reviews

The easy red-flags for almost anyone to spot fake home business reviews are the following:

1. Fake Home Business Review Award Site (I’ve NEVER seen a real one of these)
2. Fake Seals Of Approval (Often will say something like “Certified Scam-Free” or will be made to sound like a legitimate seal of approval (i.e., “Consumer Reporting Agency” instead of “Consumer Reports”
3. A request for donations (this is done to make you believe the site is a non-profit site)
4. All of the products recommended in the home business review are owned by the reviewer (this red-flag is not as easy to spot for most people as the other 3 – if you aren’t sure about an opportunity, you can ask about it in the comments section below.

If you want more details about how to determine if websites are owned or controlled by the same person or company you can check out the following sections:

• Home Business Reviews Exposed
• Competitive Intelligence Tools & Techniques

Red flag #11) Fake seals of approval, fake trust seals, and fake security seals

If you see a seal of approval, trust seal, or security seal you’ve never heard of before on a sales page for a home business opportunity, there’s a good chance that the seal is fake. Sometimes the fake seals will actually create a fake seal “database” to make you think the seal is legitimate because it is “clickable” and goes to a database at another site. If you can’t find a company that you already know is legitimate using the seal, be extremely skeptical of the validity of the seal.

Red flag #12) Non-clickable “As Seen On” logos

Home business opportunity sales page seem to love using logos claiming that they were seen in well-known places like CNN, MSNBC, ABC, USAToday, Entrepreneur, etc.

Legitimate sites typically make these seals clickable to the actual story where their company was referenced.

Red flag #13) Video testimonials that sound scripted

If you think that a video testimonial on a website sounds like it’s being performed by a paid actor. Guess what? It probably is!

Paying actors to do video testimonials for home business products is shockingly rampant. And sadly, there appear to be plenty of people eager to make a buck providing them.

Here is a real example I found of someone paying for a video testimonial just by taking 30 seconds to search a popular freelance site:

“What I Need: I need a total of 4 video testimonials both male and female. These testimonials will be approximately 30 seconds to a minute each. I need 4 testimonials all together. The testimonials have to look real of course. I will provide you with scripts for all four of the testimonials, you don’t have to memorize the entire script. The goal is to get the basic concept down, use any names in the script and stay on track about the products talked about. “

Red flag #14) The Type Of Opportunity Being Offered

Often, there are legitimate versions of the types of business opportunity fraud that scammers perpetrate, which is part of what helps scammers effectively perpetrate these scams. Business opportunity scams that con artists use time and time again are:

• 900 Numbers – besides a large majority of the “900 number business opportunities” being outright scams another problem with 900 phone numbers business opportunities these days is that consumers can legally decline to pay for a 900 number Call. Under FCC regulations, the phone company  cannot disconnect a customer’s regular local or long-distance service if they don’t pay a 900 number charge. However, they could be blocked from making future calls to 900 phone numbers if they don’t pay legitimate 900 number charges.
• Cash Gifting – claims to be legal, but isn’t
• Chain Letters – claim to be legal, but aren’t.
• Coupon Businesses – “cents off” and “coupon clipping” clipping scams.
• Display Rack.
• Government Grants – often make it appear that you “qualify for” or are “guaranteed” a grant, which is impossible for them to know. Or they will claim to tell you where to find “small business grants” which essentially don’t exist.
• Greeting Card business opportunities
• Home Business Kits – typically with a small initial “trial fee”.
• Hud Refund Tracers/Processers
• Invention Promotion Companies – They insist on advance payment – yet also insist that they make their money from royalties. Reputable firms usually work on a contingency basis, and there is no real reason why the company in question shouldn’t be able to work this way.
• Medical Billing – often involves high pressure sales tactics to get you to buy expensive medical billing software by sales people who claim they will help you succeed. Once they have your money, the help that was promised is nowhere to be found.
• Modeling Agencies – often are just a way to get money out of you by claiming that you need to pay for photo shoots, screen tests, or classes.
• Turnkey Websites – typically come with a “coach” who is actually a sales person to try get you to buy very expensive and worthless advertising
• Unclaimed money recovery scams – charge you for information that is freely and easily available at MissingMoney.com or UnClaimed.org
• Vending Machine scams

An Important Caveat About Home Business Opportunities, Home Business Training And “Red Flags”.

One caveat is that many times the sales page for a legitimate home business opportunity or home business training will look like and be hyped-up like one for a scam product. The solution? Use your head and common sense. It’s also a smart idea to network and find people you trust that you can “hang out” with virtually or physically to share your experiences of what’s working for you and what isn’t and to hone your B.S. detection skills.

Still, the more red-flags you identify with a home business opportunity, the less likely it is to be legitimate.