There are several steps you can take to find out if a business is fraudulent.
We have all heard the old adage: "If something seems too good to be true, it probably is." When money is involved, you definitely want to make sure a company is legitimate. If you are suspicious or just being cautious, there are several steps you can take to determine if a business is fraudulent.
Instructions
1. Investigate the owners. Discover who owns the company by visiting the Division of Corporations website in the state where the company is located and research their filing records. Corporation documents should include names of owners and officers. Search their names on the internet to determine if they have ever been in the news.
2. Review their complaint history. Contact the state Attorney General's Office, Better Business Bureau, state consumer protection agency, and Chamber of Commerce to see if any complaints have been lodged against the business. These entities should be able to provide details on the type of complaint and whether it was resolved.
3. Check with local law enforcement. Contact the company's local law enforcement agency or police department to find out if any problems with the company have been reported.
4. Verify the physical address. Many fraudulent companies operate with a post office box. This allows them to disappear easily when their bad business practices are revealed. Verify the physical address of the company and pay a visit to the office.
5. Review court records. You can search court records online or in person at your local Clerk of Courts office. Research both civil and criminal cases, and cross check the owners' names and the business name.
6. Check with regulators. Certain types of business are state or federally regulated. Find out if the business is required to register with any agency, then verify their license. Find out if any complaints have been filed. If they are not registered as required, this may indicate a serious problem.
7. Speak with an attorney. An attorney can review any contracts or information provided to you by the company. The money you spend on legal fees could wind up saving you far more in the long run.
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