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Don’t get scammed into paying a phony business counselor

Created date

July 28th, 2017
Photo of a keyboard with a red key labeled "SCAM".

Ever had that great idea you’re certain will make you millions if only you can get it off the ground? Maybe you need some help or mentoring on how to go about executing your business plan. If you’re considering hiring a business coach to help bring your entrepreneurial idea to life, proceed with caution.

The Federal Trade Commission (FTC) reached a settlement with a group of companies known as Guidance that systematically targeted and ripped off consumers in need of business advice.

Guidance offered what it described as “expert” business coaching services. In a video testimonial used to lure in customers, one of its “success stories” said, “I’ve grossed over $12,000 last month alone. Everything gets better all the time. I’ve got a whole stack of orders over here to prove it. Right behind me, this laptop, I bought this to start my online business. Before that I never owned a computer; I never touched a computer.”

The pitch was effective. The company took in millions of dollars from thousands of consumers interested in increasing their sales. Once someone hired the company, they were targeted by a host of other “business services” companies offering other types of business expertise. When all was said and done, no one increased their revenues and some people were left deeply mired in debt. 

Guidance has been shut down and ordered to make reparations to those the company stole from, but there are certainly others out there who are selling similar schemes. 

Where to get advice

If you are in need of business advice, start with the Small Business Administration (sba.gov/starting-managing-business). This government agency has a number of programs that advise and counsel entrepreneurs. 

In addition, the FTC has a webpage dedicated to helping small businesses.

If the expertise you are seeking is not offered for free, do your homework and check out any service offering business advice for a fee. Check their references, speak with their former clients, and try doing a Web search by typing the name of the company along with the word “scam” or “complaint.” 

Finally, if you have paid for a service, don’t pay any more until you are satisfied that the company is fulfilling its end of the bargain. That’s what happened in the Guidance case, and that’s what left so many of its victims in debt.

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