THE BIZOP NEWS

Fake fraud news, only in China? Reporter held for fake cardboard-in-buns story

From the story,

"BEIJING (Reuters) - Beijing police have detained a television reporter for fabricating an investigative story about steamed buns stuffed with cardboard at a time when China's food safety is under intense international scrutiny.

A report directed by Beijing TV and played on state-run national broadcaster China Central Television last Thursday said an unlicensed snack vendor in eastern Beijing was selling steamed dumplings stuffed with cardboard soaked in caustic soda and seasoned with pork flavoring."

Hmm, now which fraud story are we supposed to believe, the first or the second? And why?

Tim Johnson asks:

"So are they going to execute the reporter?

Turns out that China says that story you may have seen last week about a snack vendor in Beijing who was putting chopped cardboard in his steamed buns rather than minced pork was all a fake.

Let me tell you, that story got picked up by a lot of newspapers in the United States, where I am temporarily, because of concerns about food quality coming from China.

The newscast, aired by China Central Television, was seen by tens of millions of Chinese viewers. It showed the vendor soaking the chopped cardboard in caustic soda, then adding pork flavor and fatty meat before stuffing the bogus steamed buns."

Posted by michael webster at 6:46 AM | Permalink | Comments (0) | TrackBacks (0)

ACCC alleges misleading and deceptive conduct by Trading Post and Google Now, what is this lawsuit all about? (I have reprinted the entire article for ease of reference.) The suit is very interesting because the ACCC sued both Google and Trading Post.

The Australian Competition and Consumer Commission has instituted legal proceedings in the Federal Court, Sydney, against Trading Post Australia Pty Ltd, Google Inc, Google Ireland Limited and Google Australia Pty Ltd alleging misleading and deceptive conduct in relation to sponsored links that appeared on the Google website.

The ACCC is alleging that Trading Post contravened sections 52 and 53(d) of the Trade Practices Act 1974 in 2005 when the business names "Kloster Ford" and "Charlestown Toyota" appeared in the title of Google sponsored links to Trading Post's website. Kloster Ford and Charlestown Toyota are Newcastle car dealerships who compete against Trading Post in automotive sales.

The ACCC is also alleging that Google, by causing the Kloster Ford and Charlestown Toyota links to be published on its website, engaged in misleading and deceptive conduct in breach of section 52 of the Act.

Further, the ACCC is alleging that Google, by failing to adequately distinguish sponsored links from "organic" search results, has engaged and continues to engage in misleading and deceptive conduct in breach of section 52 of the Act.

The ACCC is seeking:

* declarations that Trading Post contravened sections 52 and 53(d) of the Act
* declarations that Google contravened section 52 of the Act
* injunctions restraining Trading Post from representing through sponsored links an association, sponsorship or affiliation with another business where one does not exist
* injunctions restraining Google from publishing sponsored links of advertisers representing an association, sponsorship or affiliation where one does not exist
* injunctions restraining Google from publishing search results that do not expressly distinguish advertisements from organic search results
* orders that Trading Post and Google implement trade practices compliance programs
* an order that Google publish a notice on its website outlining the above, and
* costs.

The matter has been listed for a directions hearing in the Federal Court, Sydney, on 21 August 2007 before Justice Allsop.

This is the first action of its type globally. Whilst Google has faced court action overseas, particularly in the United States, France and Belgium, this generally has been in relation to trademark use. Although the US anti-trust authority the Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google's conduct from a trade practices perspective.

What Trading Post has done is attempt to divert traffic from its competitors -someone looking to purchase an automobile, might look at the sponsored link, and think that Trading Post had some affiliation with or sponsorship from what turns about to be its competitors. It would be as if a Chevrolet commerical contained what looked like an endorsement from Ford.

And while, Google Australia has been quick to defend itself against these allegations, with Rob Shilkin, head of corporate communications & public affairs at Google, issuing the following statement:

Google Australia believes that these claims are without merit and we will defend against them vigorously. They represent an attack on all search engines and the Australian businesses, large and small, who use them to connect with customers throughout the world

But on the other hand, I have some sympathy for Google -how can it effectively review all the competitors of a company? It will be interesting to see how this resolves itself.

Posted by michael webster at 9:07 AM | Permalink | Comments (0) | TrackBacks (0)

"Georgia is suing the super duper shady Bill Heard dealership, whom we wrote about twice in July 2006. This time, the dealership stands to get slapped on the hand for sending out advertising that fraudulently appeared to be recall notices for GM cars, but were actually printed by the state's biggest car seller in an attempt to scare people into buying new cars"

Posted by michael webster at 7:50 PM | Permalink | Comments (0) | TrackBacks (0)

Illinois Channel: Sen. Obama Wants FTC to Crack-down on Fraud Aimed at Seniors Senator Obama, as the result of reading the New York Times's article on list brokering wrote the FTC and asked:

"The FTC is charged with protecting consumers from fraud, deception, and unfair business practices. The Commission is responsible for enforcing our nation's consumer protection laws and developing rules and procedures to protect and educate consumers. Given this clear mandate, the widespread and sophisticated abuse of many seniors raises a number of questions:

What if anything is the FTC doing to assess and address the particular consumer protection challenges faced by seniors or other groups of American consumers who may be especially vulnerable to abuse?

In particular, what is the FTC doing to regulate the sale of telemarketing databases to companies that are under investigation or have been prosecuted for fraud?

How have FTC resources been allocated to protect rising numbers of seniors who are conducting remote consumer transactions at increasing rates? Are additional resources necessary and for what priority purposes?

What if any programs exist to assist seniors with questions or complaints about marketing practices of which they may have been victims? What are the utilization rates of these programs over the past ten years? Have these programs been evaluated, and with what results?

Is there adequate coordination between the FTC, the Federal Reserve, and the Department of Justice to ensure effective prevention and prosecution of marketing abuse?

What if any multi-agency initiatives are currently underway or planned for the near future? Please give specific examples of enforcement actions that have been taken recently against data brokers, telemarketers, or enabling financial institutions.

What if any changes to regulatory authority or direction are necessary to enable the FTC to fulfill its consumer protection mandate in light of evolving marketing, communication, and transaction technologies?"

Prevention of this fraud is not rocket science -telemarketers succeed because people answer their telephone expecting the caller to be a family or friend, but not foe. But foes are phoning -put a lock on it and buy a telephone answering machine. Don't answer calls - let friends and family know that this is your policy. The telephone is no more your friend than unsolicited email. (Do you think that Senator Obama answers his own phone -use him as an example and buy your own phone security for $10.)

Posted by michael webster at 6:15 AM | Permalink | Comments (0) | TrackBacks (0)

The Competition Bureau of Canada has brought an action against Minto Roy and a British Columbia Company PCMG for Misleading Advertising.

The Competition Bureau complaint states that Minto Roy and PCMG sold employment services, starting in 2004, to unemployed individuals for amounts between $5,000 and $7,000. The Bureau alleges that Minto Roy and PCMG represented that they an extensive network of employment contacts and that Minto Roy and PCMG only accepted "highly qualified" individuals. The complaint claims that these two representations were false - Minto Roy and PCMG sold their services to anyone who had the cash and they did not possess any contacts with senior executives.

There has been some difficulty in serving Minto Roy, and neither company nor Minto Roy have put in a defence.

Under section 74.01 of the Competition Act, the Competition Bureau is restricted to asking for monetary relief, but not criminal sanctions.

The complaint makes for interesting reading, especially the allegations regarding aggravating factors, in which the Competition Bureau alleges that Minto Roy wnent after economically vulnerable individuals, and that Minto Roy and PCMG continued their conduct even after several complaints were made to them.

The Competition Bureau continues to avail themselves of their administrative remedies - fines and injunctive relief. This case appears to be on the line as to whether criminal sanctions should have been sought, in my opinion after reading the allegations of aggravating factors.

Posted by michael webster at 7:21 AM | Permalink | Comments (0) | TrackBacks (0)

The Winnipeg Free Press has more complaints about Reza Solhi: "HISHAM ALARD did a double take when he tuned into a television news show recently about a pizza franchise scam where Canadians lost their life savings.

Alard was among a group of pizza franchise buyers who hoped to make lots of dough, but ended up being burned by the chain, operated out of Toronto.

CTV primetime investigative news show W-5 aired a full feature on the pizza pie- in-the-sky titled Taking Your Dough. It also reported Toronto police had been investigating the chain and even the same man with whom Alard struck his deal. That man was Torontonian Reza Solhi. Solhi could not be reached for comment.

According to W-5, there were dozens of cases just like Alard's with similar franchises going back years, all run under different names, including 3 for 1 Pizza, the Pizza One, Pizza Uno and Anthony's Kitchens. Toronto police uncovered a trail that went back a decade." (my emphasis)

Apparently, Reza Solhi is going by the name of "Bobby" Solhi these days. He is operating a wholesale business in Scarborough.

Why does Reza Solhi and others like him continue to get away with fraud?

Well consider the so-called due diligence advice given out by the Canadian Franchise Association:

"While even the best businessman can fall victim to a professional con artist, there are ways to minimize your chances of being taken when buying a franchise.

The Canadian Franchise Association (CFA) posts a list of questions to ask franchisers on its website and also requires all of its members to comply with a code of ethics that includes providing potential buyers with disclosure documents.

Such documents are only legally mandatory in Ontario, Alberta and Prince Edward Island, but CFA members in all provinces must provide them. The documents include information on who runs the franchise, whether any stores have closed or gone bankrupt, and whether any litigation is ongoing. They will also provide a list of existing franchisees.

"You should talk to them. That's going to be your best source of validating whether the information you're getting from the franchiser is valid," says Lorraine McLachlan, president and CEO of the CFA. Pizza One was not a member of CFA, she said."

I have no problem with the CFA, but it is nonsense to think that a trade association funded primarily by franchisors is going to give you proper due diligence for nothing.

The CFA is not going to review the franchisor's disclosure document. That is just silly.

And in any event, the disclosure document in this case was so flawed that any professional that you retained should have told you that; many of Solhi's victims didn't obtain professional advice, even when they had hired a lawyer.

Posted by michael webster at 8:47 AM | Permalink | Comments (0) | TrackBacks (0)

As documented by the AARP in their publication, Weapons of Fraud, con criminals are experts at using the telephone as a weapon, much the same way as Willie Sutton used a gun to rob a bank.

Recently, the Voice Mail Broadcasting Company requested that the FTC allow pre-recorded messages be allowed to be delivered to customers that the company had an established "business relationship" with.

But, according to the Wall Street Journal, the FTC response was to put in place stricter rules for 'Robo Calls'.

If it were easier and cheaper to deliver a pre-recorded sales message, than using a live operator, would consumers be worse off if these messages were allowed?

According to the FTC, explaining their rejection of the Voice Mail Broadcasting Company's proposal, one "reason for rejecting the proposal is that the comments showed that neither consumers nor industry support safeguards in the proposed amendment designed to ensure that consumers who receive calls delivering a recorded message could assert a company-specific do not call request as easily as they could when they receive calls from an in-person sales representative."

What is wrong with hanging up?

Apart from the massive consumer revolt against the proposal, the FTC also cited concerns that "the use of low-cost pre-recorded message telemarketing coupled with the use of such technologies as Voice over Internet Protocol (VoIP) likely would spur an upsurge in prerecorded calls. The dramatically lower cost of telemarketing in this way could make it much more economically feasible for sellers to call consumers with whom they have an "established business relationship."

So we don't want to have cheaper trades between willing sellers and buyers, we would much rather increase transaction costs? Again, the purpose being what? So that the Federal Government is screening your calls from telemarketing companies? At what cost?

The alternative is much cheaper. Just as if you don't want your house broken into, you buy an alarm system; if you don't want to listen to telemarketers live, buy a $10.00 answering machine. This alternative is much better than loopholes in the FTC's Don't Call Registery. I don't care if you call me, I am just not listening to you at your beck and call when I have an answering machine.

Even better would be an answering machine with security devices built in,something akin to if I don't have the equivalent of your RSS feed, your message is going straight to te bottom of my list.

It is time for people to realize that the telephone is not your friend. Someone who is calling you, robo call or live, has to pass over a gateway to get your attention. Your attention should not be free.

Technorati Tags: voice mail, ftc, proposal one, consumers, wall street journal, broadcasting company, willie sutton, aarp, sales message, rob a bank, recorded messages, business relationship, safeguards, one reason, rejection, criminals

Posted by michael webster at 10:20 AM | Permalink | Comments (0) | TrackBacks (0)

Many individuals believe that owning a "portfolio" of ATM's is a profitable venture, similar to owning a bank. There is at least one group of individuals who believe that one of the operators, Monex, is dishonest in its relationship with its dealers, see their Monex Is A Scam!.

There are three points to be made about both the ATM forum discussion and the website.

First, in Ontario, the sale of distributorships of ATM's would likely fall under the Arthur Wishart (Franchise Disclosure) Act, and so the purchaser or investor should get a disclosure document, which would have to document the true cost of doing business with Monex. Yet not one of the individuals discussing Monex or complaining about Monex appear to be aware of their legal rights.

Second, the website decrying Monex's practices seems, unfortunately, quite similar to many private consumer protection websites, which sprout up like wildflowers after a summers rain and die just ask quickly. The site's owners appear to be content with making essentially one long post and leaving it at that. It certainly is far from clear that Monex is a scam, from these complaints.

Third, and finally, none of the individuals who appear unhappy with Monex are aware of what the Competition Bureau could do, since it enforces misleading advertising in not only in Ontario, but right across Canada.

I am very pro consumer, but there is little or no point in putting up a website, which is apparently over a year old, unless you direct the group of unhappy investors to a viable legal solution or better information about business opportunities.

Technorati Tags: monex, atm forum, franchise disclosure, disclosure act, disclosure document

Posted by michael webster at 9:33 AM | Permalink | Comments (2) | TrackBacks (0)

The sharp minded skeptics at Quatloos have discovered through the SEC filings that Ethos lied about their sales figures.

It appears that Ethos has been losing money from the beginning, and that according to documents filed with the SEC,

"Victor Industries to the Securities and Exchange Comission regarding their proposed merger with Ethos Environmental Inc (http://www.secinfo.com/d18hJx.v3c.htm#1stPage). Here are the real sales figures for Ethos FR:

2003: $ 198,812

2004: $ 332,780

2005: $ 1,780,825

2006 (1st half): $2,711,762

EEI's auditors also comment that "the Company has experienced recurring losses from operations and has a substantial accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern."

Maybe they should simply declare themselves to be a web 2.0 company engaging in social networking and get a postive rating from Fred Wilson.

Technorati Tags: sec filings, ethos, social networking, quatloos, fred wilson, 1stpage, http, eei, exchange comission, skeptics, merger, victor

Technorati Tags: sec filings, ethos, technorati, social networking, quatloos, 1stpage, http, eei, exchange comission, fred wilson, skeptics, merger, victor

Posted by michael webster at 9:53 AM | Permalink | Comments (0) | TrackBacks (0)

According to Kiosk MarketPlace, Business is brisk for DVD rental kiosks. James Biker, the editor, writes:

"The video rental business changed the way consumers watch movies. Today another revolution is underway, changing the way consumers acquire and view their chosen films.

DVD rental kiosks performed well in 2005, with several companies jockeying for position in the newly formed space. DVDPlay reported a growth of 200 percent from the previous year, as well as an infusion of $20 million in venture capital from El Dorado Ventures. The company rented its 5 millionth movie in June 2006."

What is the significance of this for business opportunities fraud? DVD rental units will been seen by consumers at McDonald's and other fast food locations fairly soon if the Redbox rollout is successful. Just like private payphones, atms, internet kiosks, dvd rentals will be the next big distributor scam in several years. It has all the elements of a perfect scam: a billion dollar industry with "easy" to count vending turns, easy to steal reputational capital - "as seen in McDonald's", and a compelling story, even if there is not compelling business. Can't wait.

Technorati Tags: internet kiosks, dvd rental, consumers, dvdplay, private payphones, el dorado ventures, rental business, films dvd, dvd rentals, marketplace business, watch movies, dollar industry, food locations, redbox, atms, brisk, rollout, infusion, previous year, venture capital

Posted by michael webster at 8:15 AM | Permalink | Comments (2) | TrackBacks (0)

The main observation of this blawg has been: a) deception, or the tort of misrepresentation, works on smart people who can be completely aware of many of the warning signs of fraud, and that b) public education aimed at giving more information to consumers to make their decisions is likely to fail or worse induce uncertainty at the wrong time which then pushes the decision maker to make the bad decision faster, just in order to preserve internal consistency. None of these claims are novel in the world of social psychology, but they appear to be unknown among lawyers, regulators and judges. This leads to a large concern about what lawyers should know and learn from other disciplines that is relevant to tort law.

One obvious area is the study of valid inferences. Over at the Torts Prof Blog, Peter Norberg writes:

"As it happens, lawyers have no monopoly on the study of valid forms of inference. The issue has been investigated by philosophers and logicians for millennia, and they have made especially valuable progress over the last hundred years or so. Law students should be given technical training in how to spot a valid or invalid syllogism, how to identify (and avoid committing) the standard logical fallacies, and how to disambiguate imprecise propositions. They should know their way around modus ponens and elementary principles of quantification, and they should be equipped to battle the law's repeated attempts to seduce their minds with spurious invocations of the Law of the Excluded Middle.

If there's time left over, we might give law students some bonus units on statistics, epistemology, and the sociology of knowledge. Statistics, because a nodding acquaintance with statistical modes of inference is increasingly an indispensable component of modern professional literacy. Epistemology, because lawyers should be professionally preoccupied with the question of what constitutes justified true belief. Sociology of knowledge, because lawyers should also be interested in how social forces shape the structure of knowledge and information, and should learn not to confuse the study and analysis of that topic with a simplistic relativism."

While I am sympathetic with the results that Peter wishes to obtain, I can reliably report that despite decades of teaching by Philosophy Departments students the many forms of fallacies, the only result has been a small boom in the textbook department. Few who survive a course on informal fallacies learn to think any better, they are able identify virtually every argument as both fallacious and attractive an inference form.

Part of the problem is that, until around 15 years ago, there was no systemic focus on particular types of bad inferences: fallacies which remain attractive, even when exposed as bad reasoning. Examples, from recent articles that I have posted, include: a) well, I know that the chances of A are low, but if it happens the reward will be very high, so I will take a chance on A, a secular version of Pascal's Wager, b) expert B has testified that a rare event happened, so it seems reasonable to trust the report, an inference David Hume throughly discredited in the 17th century. There are other bad, but hard to dislodge, inference patterns and if lawyers were going to taught something about inference, then they should learn how to identify and avoid variants of these ibad and attractive nferences and not make a study of inference in general.

Technorati Tags: tort law, lawyers, internal consistency, as it happens, social psychology, smart people, warning signs, decision maker, torts, inferences, misrepresentation, public education, inference, philosophers, millennia, monopoly, regulators, uncertainty, judges, observation

Technorati Tags: tort law, lawyers, internal consistency, as it happens, social psychology, smart people, warning signs, decision maker, torts, inferences, misrepresentation, public education, inference, philosophers, millennia, monopoly, regulators, uncertainty, judges, observation

Posted by michael webster at 5:59 AM | Permalink | Comments (0) | TrackBacks (0)

The Canadian Competition Bureau is responsible for litigating some of the most important economic crimes that occur in Canada.

For example, "bid rigging, agreements or arrangements that lessen competition unduly, misleading advertising and deceptive marketing practices." In order to obtain inside information on these economic crimse, the Bureau offers immunity, under certain circumstance to insider coming forward with information. Here is the relevant criteria from their website.

Obtaining Immunity

12. The Bureau encourages parties to come forward as soon as they believe they are implicated in an offence. It is not necessary for the party to have assembled a complete record of the information required at the first contact with the Bureau. Requests for immunity are subject to close scrutiny by the Attorney General and the Commissioner.

13. Subject to the following requirements, and consistent with fair and impartial administration of the law, the Commissioner will recommend to the Attorney General that immunity be granted to a party in the following situations:

a) the Bureau is unaware of an offence, and the party is the first to disclose it; or

b) the Bureau is aware of an offence, and the party is the first to come forward before there is sufficient evidence to warrant a referral of the matter to the Attorney General.

Requirements

14. The party must take effective steps to terminate its participation in the illegal activity.

15. The party must not have been the instigator or the leader of the illegal activity, nor the sole beneficiary of the activity in Canada.

16. Throughout the course of the Bureau's investigation and subsequent prosecutions, the party must provide complete and timely co-operation:

a) the party must reveal any and all offences in which it may have been involved;

b) the party must provide full, frank and truthful disclosure of all the evidence and information4 known or available to it or under its control, wherever located, relating to the offences under investigation. There must be no misrepresentation of any material facts; and

c) the party must co-operate fully, on a continuing basis, expeditiously and, when the party is a business enterprise, at its own expense throughout the investigation and with any ensuing prosecutions. Companies must take all lawful measures to promote the continuing co-operation of their directors, officers and employees for the duration of the investigation and any ensuing prosecutions.

17. Where possible, the party will make restitution for the illegal activity.

18. If the first party fails to meet the requirements, a subsequent party that does meet the requirements may be recommended for immunity.

Posted by michael webster at 6:50 PM | Permalink | Comments (0) | TrackBacks (0)

Les Henderson wrote a book, Crimes of Persuasion, and maintains a website which chronicles some of the variety of distributorship fraud works see, Fraudulent Display Rack Business Opportunity Fraud and Vending Machine Scam Offers.

I purchased the book, which is worth reading simply for the variety of scams. But the website demonstrates the difficulties and trade-offs that private consumer scam sites have. Generally, while these private sites are better than their public counterparts, partly because of their sincere dedication, the use of adsense on the site innocently confers its reputation on the ads running on the site. Scammers take advantage of this.

Many individuals who I represent first saw the business opportunity ad in a national newspaper and assumed that there would be some minimal checking done by the newspaper. This is false and I am not aware of any newspaper in the US or Canada that has even been sued for misleading advertising, even though some of the ads placed in the newspaper were absurd on their face.

Recently, one of the consumer forums, www.scam.com, ran into this problem -albeit in an unusual manner. A disgruntled individual complained about the site to Google and got their adsense adverts pulled. Upon being reinstated, the ads, at least for awhile, seemed not to represent scam opportunities. But until Google gives more control over their adsense program to consumer sites, the popular and therefore wealthy sites are simply increasing their liabilities with their popularity.

Posted by michael webster at 6:46 AM | Permalink | Comments (0) | TrackBacks (0)

Over at Truston, Identity Theft Blog, there is a discussion about the fake cheque cashing business opportunity scam, which emphasizes the role that the social networks for job seekers are not doing in preventing this scam:

"The job boards are utterly useless in stopping this fraud. They are in the business of accepting ads, not taking them down. They do very little to stop it although they may talk a good story. I was contacted by CareerBuilder a while back and they promised they were diligent in fighting fraud. I took them at their word, reported some abuse and waited. I didn't see any let up in scam job postings on their site. Their standard line is that people should report fraud and then they will shut it down. By now they should realize that job seekers don't realize it is fraud until it is too late, and by then the fraudsters have re-posted using a different name and tactic. With two interns, they could cut bogus job postings significantly. Scan all their ads for certain keywords, monitoring new job posting companies and flag accounts that use foreign addresses of any kind. And put a link on every ad that lets visitors flag a posting as suspect. That won't catch them all but it's a start". (my emphasis)

In the fraud reporting social network, there are two websites tracking some of these fake cheque cashing business opportunity frauds: www.webnetpresence.com and www.peopleschronicle.org. I had previously argued that the new Federal Trade Commission business opportunity rule would not make a difference as the commercial job social networkers would not incur any liability.

But that is probably not the correct conclusion. The FTC regulates misleading advertising pursuant to section 5 and section 12, for the purchase of food, drugs, devices or cosmetics, of the FTC Act. If the FTC has recognized that it is misleading and deceptive for the network marketing industry to advertise their business opportunities as jobs, then it should be a violation of section 5 of the FTC Act for www.careerbuilder.com, www.monster.com and the other job social networks to mislead their consumers by advertising jobs which are clearly frauds. Yet another reason why there should be a private cause of action for section 5 violations of the FTC Act, because I don't see the FTC having the resources to go after the job boards.

Technorati Tags: job postings, job seekers, job boards, report fraud, careerbuilder, business opportunity scam, cheque cashing, ads, identity theft, social networks, diligent, interns, tactic, bogus

Posted by michael webster at 8:12 AM | Permalink | Comments (0) | TrackBacks (0)

Who the Heck is Annie McGuire? Ms. McGuire runs a site designed to educate people about fraud. What is interesting about her site, among many things, is her own story. How a well educated, reasonably well-off, intelligent person appears to have lost over $1 million of her money and others falling for scams which "I could have avoided every last bit of what happened had I only stopped believing and stopped implicitly trusting long enough to pose the right questions to the right sources - starting with my own common sense. I should have listened to my own personal Jiminy Cricket when I heard his tiny voice saying that something was fishy. That's easy to say now, of course." (my emphasis)

It is not entirely clear from her narrative how she managed to ignore her own concerns.

I wish that I could recommend the websites as a favourite. But while the website is interesting, its layout is fairly confusing and could probably do with a makeover, there is no blog, rss, or even forum. This is odd in a site which wants to assist fraud victims since what fraud victims need to hear from each other that it wasn't their fault for being robbed.

Technorati Tags: jiminy cricket, intelligent person, tiny voice, fishy, trusting, scams, makeover, common sense, narrative, confusing, listened, heck, educate, annie, pose, fraud, rss, blog, lost

Posted by michael webster at 4:17 PM | Permalink | Comments (2) | TrackBacks (0)

In the early 1970's the FTC's Franchise Rule was developed as the result of numerous fly by night franchisors, in which nothing was delivered. Since then the focus has been on providing franchisees with enough information to make a rational choice between competing franchise systems. Generally, there is not the out and out fraud that was rampant in the late 60's and 70's.

However, now some pizza franchisees are claiming that Anthony's Pizza, is a throw back to the bad old times of fraud. There is a website devoted to publishing both court documents, newspaper stories, and background information. In addition, there is also a short blog complaining about Reza Solhi, who is alleged to be the organizing mind behind all of this.

We understand that complaints have been made to both the IFA and CFA and we will watch with interest to see their response, if any. Mr. Solhi is apparently now selling franchises in the United States and in Dubai. Here is the list of state regulators of franchise sales to contact if you have any concerns about Mr. Solhi.'s franchises.

Technorati Tags: franchise rule, franchise systems, franchisees, rational choice, fraud, pizza, background information, fly by night, newspaper stories, court documents, reza, ifa, cfa, rampant, ftc, franchises, organizing, anthony, blog, apparently

Posted by michael webster at 8:02 AM | Permalink | Comments (0) | TrackBacks (0)

A new Canadian challenger to the FTC- fantastic pay.

Firefox users click cick here.

Posted by michael webster at 3:13 PM | Permalink | Comments (0) | TrackBacks (0)

The Competition Bureau of Canada regulates both multi-level marketing and pyramid schemes. In a succient statement of law as it relates to pyramid schemes, the Competition Bureau's website states:

What Is a Scheme of Pyramid Selling?

A scheme of pyramid selling is a multi-level marketing plan that incorporates any one of a number of specified marketing practices that make it a criminal offence under the Competition Act.

It is illegal if:

* participants pay money for the right to receive compensation for recruiting new participants;

* a participant is required to buy a specific quantity of products, other than at cost price for the purpose of advertising, before the participant is allowed to join the plan or advance within the plan;

* participants are knowingly sold commercially unreasonable quantities of the product or products (this practice is called inventory loading); or

* participants are not allowed to return products on reasonable commercial terms.

There is one website which accuses the Competition Bureau of incompetence in not prosecuting a pyramid scheme called Treasure Traders or Business In Motion. He is quite insistent publishing long and interesting posts here, here, and finally here is a cache site of forum no longer available. I wonder if we will hear anything more about this and whether these allegations about the Competition Bureau are founded. Stay tuned.

Technorati Tags: multi level marketing, pyramid schemes, pyramid selling, marketing plan, marketing practices, competition bureau, criminal offence, competition act, inventory loading, plan participants

Posted by michael webster at 9:34 AM | Permalink | Comments (0) | TrackBacks (0)

Here is a quick look at the news stories involving OneSource ATM, as of June 21, 2006.

Technorati Tags: news stories, onesource atm

Posted by michael webster at 1:40 PM | Permalink | Comments (0) | TrackBacks (0)

There are a number of people who have complained that they have been ripped off by the business opportunity, National Imaging Distributors. The website no longer exists, but the google cache can be read here.

One distributor, an Anne from Florida, states:

Finally in February 2006 I wrote a letter to Jack Teitelbaum CEO and told him that I wanted a full refund or I would expose his scam to every reporter and State agency in the State of Florida.

Not 1 hour after I faxed the letter I got a phone call from Jack and a meeting was arranged at their office in Tamarac.

During the meeting we were informed by Teitelbaum that a refund was not possible because he was having some financial problems and did not have the money to refund. He assured us that he would be able to deliver the machines but he had a great location in a university for us to go into but they had to send the paperwork to their legal department so it would take a few weeks. At this point we decided to take the chance and hope to get into business, so we waited.

Mike the locations manager called me every week with an update but then during the beginning of May the calls stopped and I would leave messages but never got a call back.

Last week I faxed another letter to Teitelbaum and did not receive a reply. I drove to their office only to find a big sign on the door that says the company is closed and to send any inquiries to Box 25204, Tamarac, Fl. 33319.

The bottom line is this. What Teitelbaum did is FRAUD! He stole my money and he stole money from lots of other people. We were shown fraudulent location agreements to steer us into doing business with them. Once they got our money. The locations no longer existed.

Teitelbaum needs to be in jail. If you have been ripped off by these guys you need to file with the appropriate state agencies listed asap.

Anne then goes on to ask individuals to contact among other regulators: Consumer Protection Services, which enforces the Florida Biz Op rule?

What is odd, from a due diligence point of view about Anne's letter?

Technorati Tags: state of florida, google cache, state agency, tamarac, business opportunity, paperwork, ripped, National Imaging Distributors, ceo

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Posted by michael webster at 11:03 PM | Permalink | Comments (0) | TrackBacks (0)

OneSource Financial presents in a interesting picture as we can compare their FTC Disclosure document to what various state corporate documents show about the company. Remember that the FTC or State Disclosure document is not checked for its accuracy by any government official. It is up to you to conduct the background check using the document and other sources of information.

What are the warning signs with this document?

1. Item 16 is supposed to tell you the number of biz ops sold, repurchased, and/or cancelled. This is to give you an idea about the chances of success of the biz op. This Item 16, while technically correct as of January 2005, says nothing about how many biz ops have been sold. The disclosure is completely deficient.
2. Item 2 is supposed to provide details on the owners of the biz op seller. None of the details about corporate management match up with corporate filings from the California and Nevada.
3. Item 14 is completely contrary to the representations made to the investors in Colorado.
4. Finally, the financial documents are deficient because there is no income statement, which you tell you if the seller was making more money from selling biz ops than from selling ATMs.

Technorati Tags: biz ops, biz op, state disclosure, disclosure document, ftc, warning signs, background check, onesource, corporate documents, documents show, government official, contrary, nevada

Posted by michael webster at 7:16 PM | Permalink | Comments (0) | TrackBacks (0)

"They wanted a regulator to review the quality of disclosure given to franchisees, an inexpensive system to resolve disputes, rules to govern contractual relationships and penalties for breaking franchise law.

"We support this bill, but on the clear understanding that this is only the first step and not the last step towards franchise legislation," Municipal Affairs Minister John Gerretsen said in the Legislature May 17, 2000.

Toronto franchise lawyer Ben Hanuka, chairman of the joint subcommittee on franchising for the Ontario Bar Association, says he thinks it's about time the Liberals brought forward new legislation.

Some franchisors are not giving adequate disclosure, and franchisees who have already invested a life's savings at the age of 40 or 50 are having to spend $50,000 to $100,000 to enforce their rights under franchise law to rescind their contracts and recover payments. In some cases, the franchisor will not have the money to refund payments, or to compensate the franchisee for his legal costs to win a judgment.

"When a franchisee files a notice of rescission, the franchisor says: `Sue me'," Hanuka said. "If the franchisor is bad enough not to give you a disclosure document to begin with, most likely he will not refund the money,'' as we have seen with 3 for 1 Pizza & Wings (Canada) Inc. and Pizza One Group Inc.

The Toronto Star reported this week that former franchisees are waiting to collect about $1.1 million in court awards, plus legal costs and interest, from Reza (Anthony) Solhi of Richmond Hill, his former 3 for 1 Pizza franchise chain and related companies.

Meanwhile, Solhi and his family are facing a new string of lawsuits and default judgments and a police investigation at Pizza One, the first of three new franchise operations they have marketed from offices in Thornhill since 2004."

Would a regulator have helped Solhi and his family?

Continue reading "Franchise Regulator in Ontario" »

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