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How to identify income scams online

On Behalf of | Jan 31, 2022 | Class Actions

Online scams are on the rise, and some of the most common are those that claim to help their clients earn more money. The Federal Trade Commission reported that from 2016 to 2020, income scams had cost people around $610 million. On top of this, the quantity of income scam reports hit an all-time record in 2020.

As the tricks continue to evolve, consumers should educate themselves about what to look out for.

Pyramid schemes

While pyramid schemes are not new by any means, they have resurfaced as one of the most common types of online scams today. The perpetrator promises the victim payment for selling his or her products, but the victim’s real task is to recruit more sellers and draw more money to the top of the pyramid. In many cases, pyramid schemes are hard to decipher from honest multi-level marketing programs, but the main thing to look out for is an emphasis on recruits instead of product sales.

Business coaching

As entrepreneurship becomes more popular, many people want help with starting a business from scratch. “Coaches” are now offering consultations and courses to help people get their business off the ground without any experience. Some promoters are careful with their wording while others blatantly state that the client will make large profits by sticking to the model. The client eventually realizes that the advertising was dishonest, sometimes after already dumping thousands of dollars into the program.

The internet has made scams easier to pull off, but there are ways people can defend themselves. Researching, preparing, and asking questions can save consumers a great deal of money and time.