Perhaps the best way to avoid questionable network marketing ventures is to recognize the red flags. Any “opportunity” that requires you to bring other people into the network is considered a pyramid scheme. Also beware of ventures that involve some up-front investment as an entry fee to the venture. A legitimate marketing network wouldn’t ask you to pay it to sell its products.
The Federal Trade Commission offers tips on how to recognize business opportunity scams on its Web site, www.ftc.gov. It is possible to do background checks on the company that is promoting the marketing network, but a shady company never does business under the same name for any length of time. It’s not safe to assume that just because a company has a clean report that they are honest and aboveboard in their business dealings.
Check with your local Better Business Bureau or state attorney general's office. The name of the company may not be on file, but often an illegitimate company will use the same scam over and over again, and both the BBB and the AG’s office will recognize the latest business scams. Look for network marketing ventures that can offer extensive references, will provide training and orientation, and will share proof of a solid track record of their past business performance. Finally, your suport network of an attorney and an accountant are excellent people to help you sort out the legitimate companies.
