In the United States, registering a business become very easy due to the online filing and easy access. Day by day more and more individuals form USA and Other countries register & operate new businesses. As you have more businesses day by day, scams also increasing. Many companies come into market, just with the intension of scamming. they disappear from market after taking lot of money from customers and investors. Because of this it becomes extremely difficult for legit businesses to service in the market.
Fortunately there are few very powerful services that throw red flag and prevent you from falling prey for such scam businesses. I am listing below few of the methods how I identify a business is scam or not. These methods may not give you the exact YES or NO answer but will give you a fair understanding to do the right judgement.
Do some research on whether the business is really registered with local, state or federal authorities. Find out the business address and check if the business is incorporated in the particular state. Each state in US provides its own business search website where you can search the entity against the list of registered businesses. For example, for Nevada, you can search in Nevada Secretary of State website You can also search for the entities federal EIN number.
Businesses with state registration and EIN number are likely to be legit as they need a business address to register in the USA.
Check in BBB
BBB provides customers useful information about the business at both local and national level. A legit business will definitely register in BBB as they want to gain better rating. If the business you talking to are not registered in BBB, ask them to register there. It will help other customers. On customer negative reviews and complaints BBB acts quickly. They try to listen to both the parties, sets up conference calls and try resolving the issues. Hence a BBB listed business with a good rating not likely to be scam
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Google search Results for the company
Generally a simple google search on an established business will definitely show many related search results such as business listing, reviews etc. Although it is possible for scammers to write fake reviews to make the appearance trustworthy bad feedback is hard to hide.
UCB Business Solutions helped many businesses in setting up company and bank account in the United States.
Check company address
Check company’s address listed in their website. Check against the registered address from any of the state or federal bodies. A mismatch in addresses can raise a suspicion and you can ask for clarification.
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Also you can opt for chew payment. If the address is legit and the cheque sent to that address can I be deposited, it is not likely to be a scam.
Check if their website has a phone number
Most of scammers
- Do not list phone numbers on their website
- They list a fake number
- List a number which will always end up in voicemail and you may not get a call back on it.
Based on above scenario you can make your own judgement.
Myth: Company with bad reviews not always a scam
Many have the assumption that if there is a bad review on a business, it is more likely a scam. But most of time it may not be. Note that, most of cases only unhappy customer will write review. If they happy with the product or service they may just use it and keep quiet. In these cases, one can identify a legit business by going through few of random comments, and make self judgement. Or see if the business owner written a response for any of the comments etc.
Check Company’s official website
Check the companies official website. Don’t fall for the look and graphics of the website. One can check what contact information listed on the website; such as phone number, fax, email, address, number of locations etc and try for a query and see how soon you get a response.
Check company’s Legal Website Pages
Make sure the company has a legal Page on their website it has proper terms & conditions and right policies are in place
Mode of Payment
In USA if you making a card payment, it is always safe. One can chargeback the customer if he/she not received satisfactory service. A legit business will definitely have a cheque payment though its small firm which may not be able to afford a merchant account.
Check on scam advisor
Check scamadvisor.com website. This website will tell you info about the website such as age, location etc. It also has open comment option where you will find customer reviews on the business.
Search google and check for reviews about the company. There are so many review websites. Most of cases you can make out legit reviews easily.
- A legal business not necessarily legitimate
- A decent website for the company does not mean it is legit
- A good review alone can not say the company is legit. It may be fake review
- A bad review does not always mean the company is fake
- A business accepting card does not mean its legit always
But when you look into all these factors carefully and do a thorough study, you can easily make out whether the company is legit or not.