When the Scammers Come Out to Play Some of the best con artists are well-spoken, attractive and educated. So learn how to ramp up your anti-scammer arsenal.

After traveling the globe, I can tell you that we live in the best country in the world. Yet in this fine nation of ours, we've produced some talented scammers. In these challenging economic times, people with grandiose ideas are emerging to seek out vulnerable prey. In honor of the upcoming new year, I say: Buyer beware.

When the economy suffers, even the best-laid plans can be waylaid. I often recommend that business owners diversify and offer a variety of products and services that will appeal to the public. The more sales, the more income--and that equates to job security. This mind-set, however, can leave an individual susceptible to scams.

Yesterday, a client of mine called. In line with my philosophy, she wants to protect her business and her future. She decided to add vending machines to her repertoire. Great idea, but I wondered whether the market was saturated. She assured me that she'd done her research. But the company she found provided the vending machines at a high cost, and she had to stock the machines and find placements for them. The company rep enthusiastically reported, "All you have to do is sit back and collect the money." To make a long story short, I stepped in and found that the company's references didn't check out, nor did the company.

Yet another client called shortly thereafter looking for advice regarding the sale of her business. Serendipitously, just as she was adding up her profits and losses for the year, she received a call from a broker company stating that it had a client interested in buying her business. After meeting with the principal of this company, she learned there wasn't actually a buyer in the wings. There wouldn't be until after she paid the firm $11,000 for an "official" appraisal. That comment has red flag written all over it.

There are no guarantees with any new business, expansion or opportunity. But in troubling times, you can count on some real turbulence in the business world. So what should you be looking for? Credibility, longevity and information that makes sense and will provide a realistic way for you to make money.

Take my client, Sarah, for example. She had a strong interior design business until October, when we appeared to be heading into a recession. She let her clients know she'd be scaling down the operation to cut costs. Within a week an acquaintance offered to partner with her. He'd give her 10 percent of what the business is worth and take 70 percent of the profits. He'd be a silent partner and she'd continue to work the business, pay the bills and invest in the business to encourage more growth through marketing. As a struggling business owner, she considered the deal.

I explained that she can't equate recession with desperation. Would she have considered that offer an opportunity at any other time? Absolutely not.

Now is the time to exercise caution and consideration. Many millionaires made their fortunes during times of depression and recession. These entrepreneurial money makers used their instincts to jump on an opportunity. The trick was to recognize a good opportunity.

This economic downturn is no different, although money will be difficult to come by and the job market undeniably depressing. No matter what you predict for your future, consider the following:

1. Do you need an expert to advise you? If so, check out potential experts, ask for references and meet in person with no intention of jumping into an offer--no matter how attractive it may seem.
2. Never sign up for anything that begins with an unsolicited call. The best scammers have vast databases they release to talented telemarketers, hoping to sell you an "opportunity of a lifetime."
3. Do your homework. Check out the viability of any business opportunity.
4. If you are offered a deal, check out every individual affiliated with the company. In the case of my client and the business broker, the internet yielded no information about the salesman, but one of the principles had numerous complaints lodged against him with three governmental entities.

Advice about avoiding scammers may seem unnecessary, but a good scammer can be convincing. If you recently received an e-mail from a Nigerian prince requesting money, I'm certain you quickly identified that correspondence as spam. It's the individual in an Armani suit who causes me the most concern. Some of the best con artists are well-spoken, attractive and educated.

Here's one of the worst scams I've seen. An acquaintance, Ann, decided to open a day-care center. For years she'd had an entrepreneurial spirit. Once her kids were out of the house, she decided to jump on a great deal for lease space.

A friend had an acquaintance who offered her 5,000 square feet near the town's business center. He told her he would show her the property the next day when he had access to the key, but explained that several people were attempting to get the space and he needed a deposit to hold this "perfect property." Ann was hesitant, not having done any business deals prior to this one. But the man seemed knowledgeable, credible and polite. She thought it unusual when he asked for the $1,000 deposit in the form of a money order (he said his business was "restructuring"), but she didn't want to miss out on this rare find.

I don't have to spell this one out. This man didn't manage the property, other renters weren't vying for it and she never saw her money again. Ann had instincts, but the man had been so polite and accommodating that she was embarrassed to ask for a more reasonable explanation related to any part of the arrangement. For Ann, it was a thousand-dollar lesson learned.

How to investigate an opportunity

1. Find out whether the company is set up as a corporation, LLC or sole proprietorship. If the company is an LLC or corporation, check with the secretary of state in the state where the company is based to determine if the company is in good standing or if there are current complaints against the company. Ask if the company operates under any aliases.

2. In order for a corporation to sell a business opportunity, 27 states require that the company be registered to sell opportunities. Check with each state's secretary of state to see whether the company is registered and can legally sell the opportunity. If not, it could be liable for hefty fines.

3. Check for lawsuits. You might want to hire a professional company to do a search for aliases, lawsuits and personal information on the principal players. You'll also want to know if a corporation or its principals have declared bankruptcy, because this could affect your ability to pursue issues that might arise between you and the company. Chapter 13 and Chapter 7 are two forms of bankruptcy that can easily be tracked.

4. Check the Better Business Bureau. You can find information concerning companies located in almost every major city.

5. Ask for references. Once you've gotten the reference on the phone, develop a rapport and eventually pose this question: "Are you getting paid or receiving a commission for this referral?" You can learn a lot from the reference's reaction, silence or further conversation.

6. Google the company. You'll be amazed at what you find.