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A new rule, which will soon go into effect, will help you to avoid bogus “Business Opportunity” offers you see so much online these days as well as in paper forms. This new updated rule will help protect consumers from the scammers.

I am sure you’ve seen ads for business opportunities such as stuffing envelopes or assembling crafts at home and how you can earn big profits in doing so, but only after you pay them to get started.

But before you sign up with that company or distributor and hand over your credit card or send them money, first find out about the new Business Opportunity Rule that is being enforced by the Federal Trade Commission, which is the U.S. consumer protection agency.

The new rule puts safeguards in place to make sure you have the information you will need to protect yourself and to evaluate whether it is risky business in the first place.

The new rule helps to protect people in a few ways:

1.) It requires sellers who are covered by this rule to give you a one-page disclosure document which outlines important facts about their opportunity.

2.) If sellers make any claims about how much money you will make with them after buying their business opportunity, they have to give you a separate paper listing more specifics.

3.) The Rule makes it very clear that certain practices are against the law.

Under this new rule, all sellers have to give you a one-page disclosure document that offers five key pieces of information which includes:

1.) Identifying the seller.

2.) Tells you about certain lawsuits or other legal actions involving the seller.

3.) Tells you if the seller has a cancellation or refund policy. If so, what are the terms of that policy?

4.) Says whether the seller is making an earnings claim. If so, the seller has to give you another document called an earnings claim statement.

5.) Gives you a list of references.

The rule also says that a seller has to give you the disclosure document at least 7 days before you sign a contract or pay them anything. That’s right…7 days. You can then use that time to check out the information in this disclosure document, including contacting references.

However, keep aware that some promoters have been known to name people who they want listed and have a connection with to give them a glowing – but bogus – recommendations to make their opportunity look good and on the up and up. So choose people whom you want to contact and ask those people for more referrals.

If you find in your research that what the seller is telling you is different from what you hear from one of its buyers, stop there and question if it is a good idea to take the next step with them because any inconsistency could be a warning sign that they may be a scam.

What if the seller makes a claim about how much money a person can earn? Under the new rules, they have to give you a separate document that says in big type words across the top: “EARNINGS CLAIM STATEMENT REQUIRED BY LAW.”

This document has to also include the following:

1.) The name of the person making the claim and the date.

2.) The specifics of the claim.

3.) The start and end date when those earnings were achieved.

4.) The number and percentage of people who got those results or better.

5.) Any information about those people that may differ from you – for example, the part of the country where they live.

6.) A statement that you can get written proof of the seller’s earning claims if you ask for it.

Since the new rule gives you the right to see written proof for the seller’s earnings claims, you will be able to exercise that right and study those materials carefully. Compare that information to what the seller has told you about how much money people have earned. If the dollar amounts don’t line up, then there could be a problem again and so your best bet might be to just walk away.

The revised Business Opportunity Rule also spells out that certain practices are against the law.

For example:

1.) It’s illegal for any business opportunity seller to say anything that contradicts what’s in their disclosure document and earnings statement.

2.) Under this rule, sellers can’t claim they’re offering you a job when they’re really selling a business opportunity.

3.) The rule also makes it illegal for sellers to misrepresent the nature of the investment. For example, to claim they’ll help you line up locations, outlets, accounts, or customers or that you’ll have an exclusive territory if that is not true.

I feel this revised rule puts new protections in place for prospective buyers. But for your added protection, take the time to find out what the rule requires of the sellers as well to make sure they are honest and following the law.

Such as:

Did they give you the disclosure document with the five key pieces of information?
If they made earnings claims, did they give you a separate statement with the
specifics?

If you spot a seller who isn’t complying with the law, it’s a sure red flag to look elsewhere for a better opportunity for they may just be a scammer.

What else can you do to add an extra layer of protection? Well, before you buy a business opportunity always:

Study the disclosure document, the earnings claim statement, and the proposed contract for:

1.) Insisting on seeing proof in writing for earnings claims, including statements like “Earn up to $10,000 a month!” Phrases like “up to” aren’t a way out for the seller. It’s an earning claim and it’s your right to demand proof.

2.) Interview current owners of the seller’s business opportunity and ask tough questions like; does the information in the disclosure document match their experience with the company.

3.) Listen to sales presentations with a critical ear. Keep in mind at all times that they are trying to sell you something.

4.) If a seller doesn’t give you the information you know they have to provide, walk away.

5.) Consider getting professional advice. Ask a lawyer, accountant, or business advisor to read the paperwork before you sign.

6.) Check out the seller with your local consumer protection agency, state Attorney General’s Office, and the Better Business Bureau.

7.) Do a few Internet searches by entering the company’s name and “complaint” or “scam.” You could get an eyeful. But be wary: No complaints doesn’t necessarily mean the company is legitimate. And scammers have been known to post phony testimonials online.

Report Possible Fraud. If you suspect that a business opportunity seller is fraudulent, report it to:

1.) The state attorney general’s office both where you live and where the business opportunity promoter is based.

2.) Your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.

3.) The Better Business Bureau in your area and the area where the seller is based.

4.) The FTC. File a complaint online at ftc.gov or call toll-free 1-877-FTC-HELP (1-877-382-4357).

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.

To get more information on this topic, visit http://ftc.gov/opa/2011/11/busopp.shtm

Use the information in the disclosure document to fact-check what the seller tells you about the opportunity and what you find out from your own research. Then make your decision to take the next step.

For the best training on business marketing and to increase your earnings, be sure to check out www.GrowMoneyNow.com