St. Louis, Mo., Oct. 31, 2011 – The Better Business Bureau (BBB) is warning potential investors to be on the alert for unsolicited phone calls from salespeople offering to set them up with web-based stores or other Internet business ventures.
Consumers nationwide say they lost hundreds or thousands of dollars to telemarketers who took their credit card information in exchange for promises of future business income. Some of the complainants are from the St. Louis area.
Many complaints involve companies based in or near Phoenix, Ariz. The businesses include Web Media, Web Media Blogging, ITech Financial Group, Web Media Malls and UPG Marketing.
An attorney in the consumer protection office of the Arizona attorney general called the Phoenix region “the Silicon Valley” for Internet investment schemes. She said complainants often claim to have lost $40,000, $50,000 or more.
Michelle Corey, BBB president and CEO, said the companies typically prey on seniors and the unemployed, who may be vulnerable to high-pressure sales pitches.
“These callers can be very convincing,” Corey said. “They know exactly what buttons to push to get your credit card number. Don’t fall for it.”
Corey said the schemes often work because the consumers have limited knowledge about the Internet or computers.
A 70-year-old woman from Wentzville, Mo., who uses her computer only to play Solitaire, says she paid Phoenix-based Web Media Malls more than $16,000 earlier this year after a salesman told her he could set up two online stores for her.
“They said I wouldn’t have to worry about anything,” said the woman. “They had me so confused that by the time I got done, I didn’t know what I was doing.” She said she has received no income from her investment and has been unable to contact the business.
An unemployed man from Sunset Hills, Mo., said he lost $14,000 to Web Media in a credit card processing deal. He said he invested in the business because he was desperate.
“We were going to lose our house,” the Sunset Hills man said.
A woman from New London, Iowa, says her father, a retired truck driver, lost more than $80,000 to Web Media and other companies that sold him Internet business services. The Internet sites included an online store to sell a fuel additive and another promoting crime scene investigation tools. Because of the losses, the daughter said her father could lose his trailer home. He also has talked of suicide, she said.
An unemployed woman from Lexington, S.C., said she paid Web Media/ITech Financial $9,600 to set up a Web-based store that would generate cash for her with a minimal amount of work. “I can’t tell you how much I have beaten myself up,” she said. “I thought I was much smarter than this.”
The Phoenix BBB has received numerous complaints about Internet investment schemes in recent years.
Records with the Arizona secretary of state show that Web Media Blogging also does business under the trade names ITech Financial Group and Web Media Malls.
The records identify Rashied Arekat of Phoenix as company manager and Brian Christianson of Phoenix as a member. Arekat told the BBB last week that he did not know he was manager of Web Media Blogging and has nothing to do with the company. He also said he does not know Christianson. Arekat said his name may have been used because he knows a relative of Eli Rabadi. Arekat said Rabadi is an official of Web Media Blogging.
A spokesman for Web Media Blogging also identified Rabadi as an executive with the company. Rabadi is listed in Arizona corporations records as a member of UPG Marketing. Attempts to reach Rabadi were unsuccessful.
Web Media Blogging has not responded to BBB questions.
The BBB offers the following tips to consumers who are considering investing in Internet-based businesses:
- Research the company and its executives carefully. Check for a BBB Business Review by calling 314-645-3300 or going to www.bbb.org.
- Don’t be fooled by promises of guaranteed returns on your investment. No business can guarantee how much money you will make.
- Read all contracts carefully. Written contracts take precedence over oral promises or commitments. Do not sign anything, either in your own handwriting or by electronic email signature, without reading the document carefully.
- Be extremely careful committing to a business offer from a telemarketer. Never give a credit card number or any other banking or personal information unless you are confident of exactly what you will be paying and what you will be getting for your money.
Michelle Corey, President & CEO, 314-584-6800, firstname.lastname@example.org
; or Chris Thetford, Vice President-Communications, 314-584-6743 or 314-681-4719 (cell), email@example.com
; or Bill Smith, Investigator, 314-584-6727, firstname.lastname@example.org