Work Scams: Difference between revisions
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This scam often: | This scam often: | ||
*Demands you buy a "start-up kit" or something similar in order to begin the program. | *Demands you buy a "start-up kit" or something similar in <span class="noglossary">order</span> to begin the program. | ||
*Promises you guaranteed markets, huge demand, big profits, and big earnings for part-time work. | *Promises you guaranteed markets, huge demand, big profits, and big earnings for part-time work. | ||
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===What the law says=== | ===What the law says=== | ||
It is illegal for an employer to require a prospective employee in BC to pay a fee in order to obtain a job. Legitimate companies usually do not place open ads for work-at-home programs and do not require any type of payment in <span class="noglossary">advance</span>. | It is illegal for an employer to require a prospective employee in BC to pay a fee in <span class="noglossary">order</span> to obtain a job. Legitimate companies usually do not place open ads for work-at-home programs and do not require any type of payment in <span class="noglossary">advance</span>. | ||
===What you can do=== | ===What you can do=== | ||
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*Ask the seller for a list of the names and addresses of current owners and operators. The company’s list of selected references is not a substitute for a list of franchise owners. | *Ask the seller for a list of the names and addresses of current owners and operators. The company’s list of selected references is not a substitute for a list of franchise owners. | ||
*Be very wary if the seller provides recommendations from people but never gives you a way to <span class="noglossary">contact</span> those people yourself. | *Be very wary if the seller provides recommendations from people but never gives you a way to <span class="noglossary">contact</span> those people yourself. | ||
*Ask to see a Uniform Franchise Offering Circular (UFOC) and review it carefully. This document lists current franchisees, those who have left or quit, and gives financial statements of the business. It should give you the true picture of the franchise operations beyond the glossy sales brochures. UFOCs are not legally required in BC, but demand one anyway. UFOCs are required by law in most parts of the US. | *Ask to see a Uniform Franchise Offering Circular (UFOC) and <span class="noglossary">review</span> it carefully. This document lists current franchisees, those who have left or quit, and gives financial statements of the business. It should give you the true picture of the franchise operations beyond the glossy sales brochures. UFOCs are not legally required in BC, but demand one anyway. UFOCs are required by law in most parts of the US. | ||
*Get professional advice from a lawyer and/or accountant or business advisor. Go over all the details of the franchise system. Always question where the franchise company makes its money. | *Get professional advice from a lawyer and/or accountant or business advisor. Go over all the details of the franchise system. Always question where the franchise company makes its money. | ||
*Get the seller's promises in writing. If the salesperson says one thing but the written contract says nothing about it or says something different, the written contract is what counts. Sales claims about successful areas of business — "Be a part of our five billion dollar industry", for example — may have no bearing on your likelihood of success. Once you buy the business, you may be competing with franchise owners or independent business people with more experience. | *Get the seller's promises in writing. If the salesperson says one thing but the written contract says nothing about it or says something different, the written contract is what counts. Sales claims about successful areas of business — "Be a part of our five billion dollar industry", for example — may have no bearing on your likelihood of success. Once you buy the business, you may be competing with franchise owners or independent business people with more experience. | ||
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===How to spot a pyramid scheme=== | ===How to spot a pyramid scheme=== | ||
The focus is on profits you can make by sales to new recruits who buy the products in order to participate in the scheme. There is more emphasis on recruiting than on selling the products or service. | The focus is on profits you can make by sales to new recruits who buy the products in <span class="noglossary">order</span> to participate in the scheme. There is more emphasis on recruiting than on selling the products or service. | ||
Pyramid schemes are confusing. They look a lot like "multi-level marketing", which is legal in Canada. Under "multi-level marketing" people sell consumer products, usually in customers' homes. The products are supplied by a multi-level marketing company. You can obtain information about a multi-level marketing company from the Competition Bureau: 1-800-348-5358. | Pyramid schemes are confusing. They look a lot like "multi-level marketing", which is legal in Canada. Under "multi-level marketing" people sell consumer products, usually in customers' homes. The products are supplied by a multi-level marketing company. You can obtain information about a multi-level marketing company from the Competition Bureau: 1-800-348-5358. | ||