As a business or a client looking for business, it’s important to be aware of the potentials of marketing scams & fraud. Unfortunately, the world is full of scammers waiting to pounce on their next victim, so we will show you red flags and warning signs to look out for.
What is Marketing Fraud?
When a company, business, or individual commits an illegal practice or promotion of a good or service, they are committing marketing fraud. Companies who carry out the act of marketing fraud do so in a way that makes misleading claims or makes false promises. These companies will try to lure you with products and services with exaggerating qualities in the advertising, selling “genuine” items but giving imitations, or hide important information about a product or service, such as important side effects or risks.
When companies commit marketing fraud, their main goal is to get client information and lots of of money. When obtaining this information, scammers will reach out to as many people as possible or advertise to receive money for goods that they promise to deliver, or send goods that customers were not promised. Marketing fraud has the potential to spread like wildfire, unless it is reported immediately.
The Federal Trade Commission (FTC) is responsible for handling and regulating any type of marketing fraud in the United States. The FTC rules any type of marketing fraud and scams as an “unfair trade practice”, which is something your business or your clients do not want to see anywhere associated with your name.
Red Flags or Warning Signs of Marketing Fraud
The best way to figure out if a business is marketing something that seems fishy, always remember that “if it sounds too good to be true, then it is”. However, some companies and marketing agencies do a great job of making their advertisements and product photos for their business look legitimate. Here are some warning signs & red flags to look out for when looking to buy a product or service that may be phony:
If you buy a product or service and the estimated shipping time is either too fast (in a few hours or next day), or way too long (3+ months), it may be a scam. If you do purchase a product and it never comes, reach out to the company immediately. If the company doesn’t respond, or gives excuses about the product not arriving on time, it’s a scam. Also, never trust a company that doesn’t provide free tracking services for your items or services you purchased. If the company charges a premium for tracking your items, stay away! Companies find that never shipping the product or service the easiest way to target victims, because they are able to get an instant payment without ever having to provide an actual good or service to the consumer.
If you buy a product or service and it’s not what was pictured or what you ordered, it’s a scam. Scammers have been able to make excellent product photos or take other companies product photos to pass off as their own, and then the consumer falls for false advertising when placing an order. When the order arrives, it is not the product or service that the consumer buys. If have suspicions about the company or the item and you have the ability to visit the seller in person, or if they have a brick & mortar store, go see the item in person instead so you know you are buying an authentic, quality product.
If a business is pressuring you to buy now or else, it’s definitely a scam. Businesses will use this tactic to get you think fast, rather than have you think if you actually need the product or not. Some businesses will offer a “one time deal” or “limited time offer” such as 75% or 90% off merchandise or services. However, if a business is ever threatening you or bullies you into buying a product, contact the police right away and file a report with the Better Business Bureau (BBB) and FTC.
If a company is selling something that Oprah approved of, or is backed by the IRS, or any other reputable name or entity, chances are it’s a scam. Companies use credentials like these to make their business seem more legitimate, and gain more revenue and business. Unless the celebrity or public figure is promoting the product on their own social media or PR, never fall for these product or service scams.
What is Mass Marketing Fraud?
While marketing fraud and mass marketing fraud have similar objectives and outcomes, mass marketing fraud however is easier to distribute across multiple platforms. Mass marketing fraud incorporates illegal activity and false advertising that spreads far and wide to the masses, just like in its name. Mass marketing fraud encompasses using every media outlet to reach its victims and audiences, such as television, radio, direct mail, in person events and demonstrations, and even the internet. However, mass marketing fraud is more successful over the internet, since scammers are able to quickly establish a “seemingly believable” website, as well as an email address, social media accounts, and even online advertisements. Most mass marketing fraud scammers are successful because of online advertisements that drive their victims to their website, and victims are quick to impulse buy because of “limited time offers” or especially deep discounts. Most of these advertisements are published on social media, such as Facebook, and publish advertisements that drive lots of engagement and popularity, which unfortunately can make it seem like a legitimate business, product, or service.
How Mass Marketing Fraud is Sweeping the Internet
With the ability to create free websites in minutes, and be able to establish social media accounts, localized online phone numbers (Such as Google Voice), and making a business email address, scammers are able to start pushing out false advertisements and products faster than we can imagine. Unfortunately, it can be hard to determine right away if a business is legitimate or not, until a handful of consumers purchase goods and services from the business and realize it’s a scam. If you ever doubt the legitimacy of a business, don’t give them your business. You can also look up reports on the BBB to see the business’s rating. Also do plenty of research, like looking at reviews left by past clients on Yelp, Google, Facebook, and see if a brick and mortar store is present. If there is no physical location for the business, don’t assume right away that the business is not authentic. Instead, do plenty of research on the business on their social media accounts and their website.
Your business shouldn’t be a victim of marketing fraud. Let us help you.