How to avoid internet frauds when launching a digital business

In the age of online scams, here's how to start an online business without getting ripped off.

The business world online is getting more and more complicated. Digital brands like virtual assistant services, social media agencies, and coaching companies are being started by more founders. But the increase in online brands has also led to an increase in online scams.

This month, a judge gave "The Real Housewives of Salt Lake City" star Jennifer Shah six and a half years in prison for a telemarketing scam that scammed thousands of people.

NPR says that Shah was selling customers' contact information, which she got when people put money into fake businesses and paid for services like web design and tax preparation.

"There is a difference between 'business coaches' and 'business opportunities,'" Cynthia Franklin, an adjunct professor of entrepreneurship and the director of the Berkley Center for Entrepreneurship at NYU Stern, wrote in an email.

Business coaches, who are part of a growing group on social media, give advice and act as mentors. Franklin said that "business opportunities," which often focus on making money right away, have a greater chance of being abused.

Insider gathered tips on how to avoid scams when starting a business online because of the rise of digital businesses and the number of people who want to make extra money to prepare for a possible recession.

Watch out for false promises and pressure, which are signs of a scam.

When starting a business, it can be tempting to sign up for services and programmes that promise more sales, more customers, or quick growth. In fact, the hashtag "#businesscoach" has been used more than 5.3 million times on Instagram and has been seen more than 302 million times on TikTok.

The Federal Trade Commission said that a service could be a scam if it promises things like "guaranteed income," "big returns," or a "proven system."

Franklin said, "Business opportunities are focused on making money in a short amount of time." "The biggest sign that you should stay away from someone is if they try to get you to give them money right away without giving you time to think."

She added that real coaches might offer incentives to "act quickly," but they would never force anyone to do so.

Franklin also said that a product or service that doesn't have a trial period or a way to get out of it if you change your mind could be a scam.

Potential varsity coaches
Franklin said that coaching programmes can work for entrepreneurs who want specific help with ideas they want to try, problems they want to solve, or missions they are passionate about. If that is the goal, not just making money quickly, a coach who has been checked out can help. But there are no rules about online coaching, so coaches don't have to take any classes or get any credentials before they can work with clients. According to an insider, this makes finding a qualified coach difficult.

When looking for a coach, it becomes even more important to check all claims and customer reviews.

Franklin said, "Like with any transaction, you should always read the privacy statements, terms of service, or other information about how your information will be collected, stored, and used."

Next, references and reviews should talk about specific results and include a person's first name, last name, title, and the name of the company they started. This way, you can look them up and see if they are from a real customer.

Google can also help you find out if there have been any legal complaints about the product or service provider.

If you aren't sure about the digital-coaching industry, you can still grow your business in other ways. Franklin suggested that founders join support groups like Business Network International, alumni networks, or trade associations for their specific industry to make connections with trustworthy people.