13 Ways to Avoid Getting Scammed by an Online Company
Unfortunately, recently I have been hearing a lot of small business owners complain about online companies that have ripped them off in the past. Some experiences involve companies taking their money when they sign up and not delivering what was promised. Others involve the company simply “disappearing” after the customer signs up without delivering the service paid for.
It is my goal to educate small business owners so that they can avoid these situations from happening in the future. There are a lot of precautions that can be taken and simple research that can be done so that you, as a small business owner, can rest assured that your money is safe.
1. Do a Google search on the Company’s name
If you are dealing with a company with a bad reputation, there is a good chance that someone has posted something somewhere online about their experience. A simple search for the company’s name should expose these. If the company has a very generic name, do a search for the company’s website address instead (Example: search on Google for “www.examplecompany.com”).
2. See if there is a phone number and address on the website
If a company does not post their address or phone number on their website, there is probably a good reason for it. A lot of bad online companies simply have contact forms on their site. If this is the case for the company that you’re investigating – BEWARE – there is probably a reason why it is not there.
3. Do a Google search for the address listed on the company’s website
A lot of bad online companies will try and get away with listing a false address on their website or email signatures. Most people wouldn’t think to check to see if the address is legit, but if you want to avoid being scammed, this is a good idea. When you type in the address on Google, look to see what shows up in the search results. If the results show you business listings that are unrelated to the company that you are searching for, then this should raise a red flag. I’ve done this before for bad online companies and their addresses pulled business results for real estate development properties. Or, sometimes a search will reveal that the address is in a residential zone.
4. If the address is a PO Box, you might want to ask the company for their actual office address
Anyone can register a PO Box, and if that is the only existing address for a particular company, it might be a sign that they’re operating their business out of someone’s basement.
5. Always get it in writing
Any company that asks you for your credit card number over the phone should be avoided. Always get a copy of what you’re agreeing to and make sure you read the entire thing. Without documentation, it’s really hard to prove that a company didn’t deliver what they promised
6. Don’t always believe what the sales reps tell you
If the sales rep on the phone tells you something that is not listed in the contract you’re signing, it’s safe to assume it may not be true. If the sales rep guarantees your business something, they should have no problem restating that guarantee in the contract that you sign.
7. Make sure you understand the Terms & Conditions
If there is something written in the Terms & Conditions that you don’t completely understand, ask them to clarify or reword it. It’s better to be safe then sorry.
8. Always sign something
A copy of a contract with no signature is almost as useless as not having anything in writing. A signature and date proves that you agreed to something. If you don’t have this, then it’s basically your word against theirs. It’s even better if you also get the company to sign the agreement. That way they are also signing stating that they will give you what is promised in the agreement.
9. Check to see how long the company has been in business.
If the company just started 2 months ago, it might not have the financial stability that you need it to have in order to be safe from getting scammed. There is an easy way to find out how long a website has been in existence. Go to http://whois.domaintools.com and enter the website address into the search bar. On the results page, it should give you a date when the domain was created. If the date listed is fairly recent, you might want to rethink your decision of signing up with them.
10. Always ask for references
If the company who approaches you is one you have not heard of before, ask them for references from customers who have been using their service for six months or longer. It’s very important to get customers who have been with them a decent amount of time because new customers wouldn’t have had enough time to judge the quality of their product.
11. If the price sounds too low, there might be a reason for that
A lot of online scams offer products that are fairly inexpensive. Since their motto is to sign up as many customers as possible, with no focus on customer retention, it is in their best interests to use low-pricing as a sales technique. If you find that their prices are significantly lower than other companies that have approached you about the same service, it might mean that they simply don’t deliver what they promise.
12. Make sure the customer service phone number does not take you to a sales person’s voicemail.
A lot of small companies that are trying to make some quick money will have their customer service number send you straight to one person’s voicemail. If the phone number doesn’t take you through an automated system that requires you to enter in an extension, it might be because the company is run by 1 or 2 individuals, which usually isn’t a good sign. Also, if the customer service number takes you to the sales department, this might give you a clue about how much time and money the company invests into customer service (none).
13. If you get an email from a company, make sure it comes from a company email address
If the email address is company@gmail.com or company@yahoo.com, it might be a bad sign because it means the company hasn’t even taken the time to build a website with personalized emails. Company emails should always be in the format employeename@companyname.com. It doesn’t only tell you that the company is more established, it can also assure you that the sales rep does in fact represent the company that he’s claiming to be associated with. For example, if someone calls you claiming that they work for Yellow Pages but their email address is steve234@hotmail.com, you might want to reexamine whether or not you should do business with him.
Thanks for writing, I really liked your most recent post. I think you should post more frequently, you obviously have talent for blogging!