How to Run a Scam Check

In today's internet age, there seem to be amazing ways to earn money online, save money by purchasing online, and grab opportunities instantaneously. There's a million ways to succeed, and seemingly a billion ways to fail. Identity-theft and fraud are a major problem, this article is intended to provide you a few tools to make sure that you are dealing with a legitimate company.

I worked for a business-to-business financial services company for many years and I learned a few tricks of the trade when dealing with companies.

Do you want to check out a company, but you're worried about its legitimacy? A few warning signs that a company is a scam:

1. Money up-front / Information up-front

If the company intends to hire you in some capacity, the business should be paying you, not the other way around. Any time you have to pay up front, take caution.

Secondly, there are MANY legitimate companies that require personal information. Some legitimate websites that offer money-making opportunities will require you to submit your phone number or your address. It is up to you to decide if you want to trade that information for value.

Here's a hot tip: if a mortgage asks you to provide your social security number for a refinance-estimate, you can decline and instead send them a copy of your credit report - as long as it is recent.

2. The business does not have a listing with your Secretary of State.

Any reputable business must register with the Secretary of State as a corporation, typically called a "Limited Liability Corporation" (LLC) or partnership. If the business does not have a listing, ask that company to see its listing.

3. The business does not have a F.E.I.N. number.

An F.E.I.N. number is a public record of a business. It's like a business's social security number; it's unique and tied to the owners of that business. Keep in mind that businesses do not typically disclose their F.E.I.N. numbers, but they are a way to prove if a company is real.

4. The business is not a member of the Better Business Bureau

Keep in mind that any business can REGISTER with the BBB, but to be a MEMBER, businesses must be in existence for several years and pay dues. Viewing a basic report on the Better Business Bureau is FREE.

Another thing to look out for on the BBB is the number of complaints. People complain about businesses all the time. One or two complaints over three years IS A GOOD SIGN, this means that the company has enough business that they actually get disgruntled customers.

Have you ever looked up the BBB listings of a major corporation? Phone companies will typically have hundreds if not thousands of complaints - this does not necessarily mean that you won't receive excellent service from the company, it simply is a measure of the volume of customers passing through.

5. The business is not listed with Dun and Bradstreet

Dun and Bradstreet is similar to the Better Business Bureau, however it relates more to business revenue, income, and debt solvency than customer relations. Viewing a basic listing on Dunandbradstreet.com is FREE.

6. The business does not have a physical address.

Sometimes, businesses have multiple owners, or are owned by other companies. Any reputable business will have a current mailing address, even internet job listings. See if they're hiring. Where could you fax a resume?

7. There are no 3^rd-party reviews of the company

Most companies will have at least one article online describing their service. Newspapers, local magazines, and consumer websites will provide examples of the services provided. Small companies and towns will probably not receive much attention, so understand that there is a limit to how much media action occurs in the industry.

Hopefully these simple tests will help you find out if a business is a scam or not. Keep in mind that a real business may provide a real service, but there are plenty of real companies that provide poor service, despite their legitimacy. Don't mistake incompetence for maliciousness. If the company has been around for a while, there's a good chance that they're providing good service. There is simply too much expense to keep a company running.

As they say, buyer beware!