How would-be entrepreneurs lost a fortune to alleged phony business coaching services: Internet Scambusters #785
Business coaches are in big demand these days as more and more people look to start up their own firms or step up their business game.
But how can you tell if the personal coach or online coaching service you're thinking of paying for really knows his or her stuff?
In this week's issue we'll explain how would-be entrepreneurs lost more than $50 million to allegedly dubious coaches and their companies -- and we'll show you how you can avoid being snared by scammers.
Now, here we go...
Is Your "Business Coach" a Fake?
Many of us in business value the benefit of advice and guidance from others with more experience than us in particular areas.
It's such a popular idea that a whole new industry has sprung up in recent years to exploit this need. We call them business coaches.
But business coaching is a whole different world from simply asking a business acquaintance to share their wisdom. Often with business coaching, we don't initially know the person who's going to mentor us.
So, how do we know they are what they say they are? Maybe they're fakes who are just one chapter ahead of you in the business practice textbook.
After all, you don't need any formal qualifications or professional association membership to call yourself a business coach. And, anyway, how many people bother to check the credentials, especially the testimonials?
The fakes are particularly active in the field of business start-ups -- you know, the retiree, the stay-at-home parent or the would-be entrepreneurs who are just itching to put their ideas into practice but not sure where to start.
Earlier in 2017, the U.S. Federal Trade Commission (FTC) settled a case with a group of individuals and linked companies who allegedly hoodwinked home-based business founders out of millions of dollars.
They allegedly crushed the hopes of many business dreamers, charging them thousands of dollars each for training services and materials that they never provided. Victims were left with no functioning business, no significant earnings, and a stack of debts.
The alleged perpetrators were ordered to repay more than $50 million but victims are unlikely to see much or any of this since all the cash seems to have disappeared.
Many business coaching services are provided online these days, making it more difficult than ever to tell whether the people you're dealing with really know what they're talking about.
And even if you find a suitably experienced coach, how can you be sure they're not ripping you off when you pay for their services?
As social media strategist Lesya Liu said in a recent report for Entrepreneur business magazine:
"The Internet enables us to share a variety of valuable knowledge, and information is the new currency. It's no surprise, then, that so many people want to share their insights and experiences.
"Unfortunately, this situation also presents an amazing opportunity for all kinds of get-rich-quick schemes and self-proclaimed gurus. Both leave people feeling tricked instead of empowered."
So, what steps can you take to avoid being conned by a fake business coach?
Seven Key Steps
1. Well, first, the usual advice of thoroughly checking out any business coach -- real or virtual -- applies. It will stand you in good stead against the risk of being scammed.
Checking them out means not taking their own words and claims as proof of their skills. It means verifying their credentials and searching online for what others say about them.
Your check should also include a review of your coach's own claimed business performance. If they say they turned a hundred dollars into a million, find out if it's true. If they say they founded a successful business, see if that's exactly what they did.
If they didn't do it for themselves, they won't be able to do it for you!
2. Second, keep your skeptic's antenna on full alert for outrageous claims that suggest you can easily earn a fortune almost overnight, with little or no effort. Simply not true.
Here are five more tips for sidestepping the crooks:
3. Make sure you find them. Don't let them find you via telemarketing, emails, social media, or any other unsolicited way. When you decide you need a business coach, go out and find one. Search online, speak to your local Chamber of Commerce, or ask friends, colleagues, and family if they know of a suitable person.
4. Don't pay for information that might be available for free elsewhere. There are actually lots of legitimate business advice sites that don't charge for basic information. If a site has lots of free and genuinely useful information, you can be pretty sure there's some substance behind the services they charge for. You can also find out more about what might be on offer for free by visiting the U.S. Small Business Administration.
5. Don't throw good money after bad. If you suspect you might already have been scammed -- for example, when materials and services you ordered don't show up -- firmly resist any request for more money.
6. Likewise, don't yield to time-pressure selling -- where the "coach" offers you a good deal but only if you accept, and pay for, their services before a looming deadline. No reputable coach would operate this way.
7. Finally, trust your gut feeling. If you're dealing with a supposed mentor either directly or online, do they seem to be able to empathize with you. Do they understand your background and spot where the gaps are in your knowledge? Do they have a blog? Read it and get to know them
"If something seems off, it probably is. It could be an inconsistent story, a host of pressure tactics, or simply a combination of attitude and behavior. A brilliant athlete or entrepreneur with a nasty personality can't possibly be a good coach."
Alert of the Week
Do you use a Discover credit card? If so, don't be taken in by a letter that seems to come from the card company requesting proof of citizenship and employment.
It also refers to a check the company is conducting on potential money-laundering activity.
Recipients are asked to use a lookalike website or toll-free number to provide these details.
Discover confirms it has made no such requests, so the obvious conclusion is that this is an identity theft ruse.
That's all for today -- we'll see you next week.
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