Biers says that companies engaging in these scams target individuals who are in the start-up phase of business. The common thread is that the individual must buy something before he or she can begin to work.
Biers outlines some of the scenarios of common start-up scams and how they operate.
Traveling sales seminars selling home-based business opportunities travel throughout the U.S. selling opportunities to consumers. The opportunities are frequently at a special price for a limited time only. Few, if any, of the individuals who purchase these businesses make any substantial money. And when a consumer returns a defective item for a cash refund, individuals who have purchased the opportunity cannot locate the company. Distributorship and franchise fraud occur when companies are more interested in selling the distributorship or franchise than they are in selling the product or service.