Net Alert

You've been warned repeatedly to check out business and franchise opportunities, especially if they promise easy money. But while some scams are easy to spot, many con artists have gotten quite good at luring investors--especially over the Internet. So how can you tell if an offer is too good to be true?

The Federal Trade Commission (FTC) recently released a Consumer Alert notice, "Net-Based Business Opportunities: Beware of Flop-portunities," which includes the following tips for researching business and franchise opportunities offered on the Internet:

• 4Remember, seminar "trainers" and "consultants" are often there to sell you a business opportunity, not to provide a true learning experience.

• 4Investigate all earnings claims by visiting others who have invested in the opportunity.

• 4Get all company claims in writing.

• 4Don't accept the company's list of references in lieu of a list of franchise or business opportunity owners.

• 4If it's a franchise, request a disclosure document--the company is required by law to provide you with one.

To check out FTC publications on this and other topics, visit the FTC's Web site at http://www.ftc.gov and click on "Consumer Protection," or write to the Consumer Response Center, Federal Trade Commission, Washington, DC 20580.

This article was originally published in the August 1998 print edition of Entrepreneur with the headline: Net Alert.