Consumer Corner: Beware of Callers Offering Websites and "Grants"

By Alan Marx, AARP Tennessee Consumer Watchdog

Everyone would love to have more money, because rent, food, medicine, and almost everything else costs more today. Scammers know that, and they use the lure of money as a powerful lure to attract people they hope will become victims, many of whom are seniors, veterans, or people in debt.

So, the telephone rings. The caller, who claims to be affiliated with Amazon, offers a chance to participate in a money-making opportunity. The caller explains that he or she will create a website, link it to Amazon.com, advertise it, and optimize search engines to bring customers to the site. Of course, this work will require some money from the consumer/investor, just a few hundred to a few thousand dollars, but the listener is told the return on the investment can be thousands of dollars every month from Amazon purchases made over the website. For a relatively small investment, within ninety days the flow of money will come with very little effort on the part of the investor.

But wait, for some people there is more good news. Some of the marketers called again or called other people, at times claiming to be from the government. They said that consumers who qualified could get grants to pay for home repairs, medical costs, and debt repayment. They asked for personal financial information, such as the consumer’s age, driver’s license number, home value, credit card debt, available credit, access to savings and retirement funds, and other sensitive data, supposedly to determine if these consumers qualified for grants. After reviewing the information, the consumers were told they met the requirements to qualify. They were told the amount of the grants might be tens of thousands of dollars or even more. If the listener would agree to form a limited liability company, the callers said even larger grants could be obtained. The consumers would have to pay a few thousand dollars up front, but those fees would be reimbursed when the grants were received.

Does it all sound too good to be true? It was. By a vote of 3 to 0 the Federal Trade Commission (“FTC”) issued a complaint against five companies, their affiliates, and three individuals, including The Blue Saguaro Marketing LLC; MarketingWays.com LLC, also d/b/a Amazon.com Associates Program; Max Results Marketing LLC, also d/b/a Amazon.com Associates Program, Amazon Affiliate Program, Amazon Associates Central; Oro Canyon Marketing II LLC; and Paramount Business Services LLC. These defendants were charged with operating call centers that engaged in violations of the FTC Act and the Telemarketing Sales Rule.

According to the FTC, the victims who became entangled in these schemes received no money. The defendants ignored the complaints they received from the victims and provided no refunds. The truth was that the callers were not affiliated with Amazon, and the websites either did not function or were the same or similar to sites sold to other buyers. People did not make money as the defendants had promised. The callers offering grants did not work for the government.

On October 11, 2016, a federal court in Arizona issued a temporary restraining order to halt the operation. The FTC asked for a permanent end to the allegedly illegal practices and for an order requiring money, totaling millions of dollars, to be returned to consumers. On October 25, 2016 the court extended its order. The court also froze the defendants’ assets and directed that a receiver be put in charge of the companies.

Many of the victims of this fraud were not in a position to take the losses without serious damage to their financial stability and their lives.

 

Conclusion

Legitimate businesses do not begin with a cold call from a total stranger. Scammers understand human psychology. Many people do not make their best decisions when they are under pressure, so scammers make their sales pitch and then press hard for an immediate yes or no answer. They tell their victims that the offer has to be accepted immediately or it will not be available. They do not want the victims to think it over, calmly reflect on it, discuss it with a caring friend or relative, check with the Better Business Bureau, send a letter to Amazon.com to ask if the offer is legitimate, or take any other action that might spoil the con.

Grants usually are offered to people who apply to funding organizations, not to people through cold calls. If you are offered a grant out of the blue, without applying for it, your best response is to end the conversation by hanging up. If you are curious about legitimate grants for which you might qualify, a trip to your public library and a conversation with a friendly librarian could be worthwhile.