Scammers pushing empty promises of wealth from business opportunities never cease to be creative. They come up with ideas that sound so detailed and timely that the deal has to be legit…at least, that's what they want you to think.

Take Smart Tools, LLC, whose marketing convinced people they could earn nearly $40,000 per year in a home-based business as “Government Insurance Refund Processors.” The business allegedly involved finding people eligible for refunds from mortgage loan insurance payments and charging them a fee for telling them how to get those refunds. Smart Tools charged consumers who signed up $29.99 per month for refund processing software and access to lists of people eligible for refunds.

But here’s the thing: The U.S. Department of Housing and Urban Development offers the same lists for free online.

According to the FTC, Smart Tools also did not make consumers aware of details about the business as required by law. Today, the FTC announced a settlement with Smart Tools that bars the company from continuing these deceptive marketing practices. The case is one of the first actions the FTC brought under its updated Business Opportunity Rule, which requires business opportunity sellers to provide specific information on a simple, one-page form to help consumers more effectively evaluate an opportunity.

If you are considering a business opportunity, be sure the seller provides you with the form – which should include these details:

  • the seller's identifying information
  • whether there is a claim about your likely earnings; if so, the seller must provide information supporting the claim
  • if the seller, its affiliates or key personnel have been involved in certain legal actions; if yes, a list of those actions
  • if there is a cancellation or refund policy; if so, the seller must provide a document with the terms
  • a list of people who bought the business opportunity within the previous three years

The FTC has information to help you avoid dishonest or bogus business opportunities. If an opportunity sounds suspicious or you’ve been taken in by a scam, file a complaint with the FTC.