Informercials

Have you ever seen infomercials that tout easy ways to make money in real estate or home-based businesses, or tell you how to get low-interest government loans or grants to start a new business or go to college? Perhaps you have been enticed by advertisements in the classified section of your newspaper or magazines that promise "big money" can be made through business opportunities or work-at-home schemes. The companies behind this advertising often claim that if you use their products and services, you can increase your wealth or start a business, often from the comfort of your home. But be skeptical about these "get rich quick" advertising claims, the Federal Trade Commission warns consumers in its new brochure titled "Wealth-Building Scams."

The FTC has been investigating companies that make false, misleading, and unsubstantiated claims about wealth-building and business opportunity programs. The FTC's brochure explains some of the typical sales approaches used, offers tips to consumers on how to avoid being a victim, and tells consumers where to go to complain or to get additional information.

The FTC advises consumers tempted to respond to the infomercials or other wealth-building advertisements to:

• be skeptical about the "get rich quick" claims;
• ask for written substantiation for the claims made in the presentations;
• be cautious about testimonials (they may not reflect the typical experience of most consumers);
• be aware that "experts" who endorse a product may be paid by the advertiser;
• be wary of promises of free money or low-interest government loans (generally, government grants or loans are available only in limited circumstances);
• not be pressured to buy immediately; and
• check out the company with your local consumer protection agency, the Better Business Bureau and your state Attorney General's office.

The brochure also suggests that consumers interested in learning more about money management and business ownership should consult their local library, the Small Business Administration and state and local government offices. If consumers are college bound, they can check with the college financial aid office for information about grants, loans and scholarships, and their eligibility criteria.

If consumers feel that they have been victimized by a wealth-building or business-opportunity promoter, the FTC suggests that they contact their local consumer protection agency, the Better Business Bureau, and their state Attorney General. They also should contact the National Fraud Information Center which operates a consumer hotline at 1-800-876-7060, 9 a.m. - 5:30 p.m. (eastern), Monday - Friday.

Free copies of the "Wealth-Building Scams" brochure, as well as other brochures that warn consumers about fraudulent sales practices, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov