Small Business Owner Be Aware of Funding Scams
The Better Business Bureau has issued a warning to small business owners who could fall victim to fraud schemes.The Dayton BBB has picked up on reports of a number of scams attracting attention across the country, and the bureau is hoping a warning to Dayton-area business owners will prevent them from falling for the same Internet frauds. BBB President and Chief Executive Officer John North said although much of the attention during the credit crunch has been focused on large companies, small businesses have been very susceptible to fraud, losing up to $26,000 each through Internet transactions.
"The Internet provides a perfect stage for fraud because bad actors in the
loan industry can easily portray professional images that provide
unsuspecting small business owners with a false sense of trust," North
said in a news release. The BBB identified several loan and grant offers
small business owners should be aware of when looking for funding,
including: * Mediations LLC (also doing business as Innovations Northeast
LLC) has been accused by several businesses across the country of charging
substantial up-front fees for construction loans, but not delivering on
the promised funds. Business owners have paid fees ranging from $1,500 to
as high as $26,000 and were required to pay by wire transfer or cashiers
check only. The BBB has advised small business owners to never pay large
sums of money up-front to receive loans or wire payment for services,
because there is no way to get money back from this type of scam. * The
National Small Business Alliance has been accused by business owners in 49
states of pre-approving small businesses for $8,000 credit lines for
one-time membership fees of $99 to $149. The promised loans, however, turn
out to be comprised of coupons, discounts and offers made by participating
vendors to purchase goods and services using credit terms. Business owners
have said the company continues to deduct money from their bank accounts
without permission and doesn't refund money as promised. The BBB has
advised business owners to be extremely cautious when providing bank
account numbers and insist on reviewing offer details before making buying
decisions and signing contracts.
* Capital Funding Programs, an online service that claims to link
business owners with ways to pull in thousands in government money has
been accused by business owners who said they were burned by online
offers to receive government grant money. Small business owners have
been required to pay several hundred dollars via wire or money orders,
never hearing from the phony companies again. The BBB is warning
business owners to stay away from programs that require money up-front.
If a company qualifies for a grant, the U.S. government doesn't request
payment as part of the application review or grant award process.
Posted on Sunday, April 20, 2008 at 6:45 AM
Edited on: Sunday, April 20, 2008 8:20 AMPosted in Business News (RSS)