Scanning for Scammers Before You Buy In

Entrepreneurs take note: In its work for the government, Staffcentrix has developed techniques to ferret out fraudulent business opportunities

by Karen E. Klein

No would-be entrepreneur should ever fall prey to a scam artist again, says Christine Durst, co-founder and chief executive officer of Staffcentrix, a training and development company that designs and delivers home-based career training programs to the U.S. State Dept. and the U.S. Armed Forces. Using free Internet tools and some common sense, she and her staff have developed detailed techniques for ferreting out fraudulent business opportunities. She shared some of her secrets recently with Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

Your company does training and development. How did you develop expertise in investigating fraudulent business opportunities?

We help people find legitimate work-at-home employment or home-based entrepreneurial opportunities. We've trained or mentored more than 4,500 entrepreneurs in 65-plus countries around the world as part of our work for the government. When you're sending job leads to the State Dept., you do not want to inadvertently send scams. So we developed a kind of sixth sense about what opportunities are legitimate and which are not, both in terms of home-based employment and work-at-home business leads.

What are some typical hallmarks of scams?

Fraudulent pitches are usually frantic and give you some sense of urgency. They'll say there are only 10 more business opportunities available. They'll tell you that you need to send an e-mail or make a phone call right away or else. They include promises of huge compensation for very little work. There's very little detail about how much you'll have to work, how much you're going to make, and what exactly you're going to do. They'll all tell you that no experience is necessary.

Are there more scams now than there used to be, or about the same?

With work-at-home opportunities, we reported a 30-to-1 scam ratio three years ago. Now, it's gone up to 48-to-1. Another thing we're seeing more and more is these scammers billing themselves as "Christian companies." Of course, they're playing to a bias right there, making the assumption that people will be put at ease because they think they can trust Christians and therefore the company must be on the up and up.

Can you walk through the steps you take when you're investigating an Internet business opportunity?

Sure. One point to make is that we use free online tools that can be used by any entrepreneur to investigate companies they might be considering doing business with, purchasing from, investing in, or partnering with. We also use tools that can help business owners determine whether their Web site content is being pirated and used elsewhere.

We first look at the Web site. Oftentimes they are fairly professional looking—some are obviously fraudulent, fly-by-night sites, but not all of them. They may have graphics, drop-down menus, a company mission statement, even pictures of an executive team. The first thing we do is try their telephone number. The first red flag we get is if the number is out of service.

Obviously a company currently in business is going to have a working telephone.

Exactly, so if they don't, that's immediately suspicious. Next, we investigate how long the site has been online. For this, we visit Whois Source, and enter the business' Web site URL in the search box.

When that search comes back, there's a "registry data" section that shows you when the domain was registered. Another red flag for us is if we see that the site was registered and built quite recently. Scammers often build in a hurry, work quickly to find victims, then disappear as quickly as they came. Another common practice among scammers is that they do not indicate who the domain owner is, listing instead "PrivateRegContact." Many legitimate businesses also "register by proxy" to avoid spammers, but it is worth noting.

So in just a few moments, you've already been able to determine a lot.

Exactly.