entrepreneurs_beware.htm

Every NASCAR race has me glued to my TV; viewing the last race made me decide to write this article. I suddenly realized how vulnerable all we home-based entrepreneurs are to a variety of skillful predators. There were ads during the race for Freecreditreports.com and the fellow with his Social Security number on the side of an 18-wheeler was showing how his plan can protect you from all kinds of identity theft. It reminded me of how my bank incessantly calls me with credit protection plans they want me to buy. Overall, I have a very positive outlook on life. Since I’ve had several unfortunate experiences in which others have taken advantage of me, however, I want to alert all of my readers to these potential dangers. Here’s what I know about things that can happen.

Every day we are all subjected to scams trying to get our money, to phishing from those searching for ways to steal our identity, and to just plain dishonest efforts to get us to purchase fraudulent or non-existent products or services. It is true that many of these so-called scams are unfairly criticized by those who would have you fear the results enough to buy some service they offer to “protect” you. Even so, there really are serious threats to every home-based entrepreneur. Success and security come at the price of eternal vigilance. Basic protection should not be expensive, because you can use firewalls and other protection that is included in your Microsoft or MAC operating systems. Some older OS versions may not have this security; in such a case there are many inexpensive programs available by searching Google. Additional virus protection is available from Norton, McAfee, and others for a very small cost. Use this software in addition to protection available from your ISP and you should be out of harm’s way.

I trust no one, not even my family members. I do cut them a little slack by saying if they do, in fact, mess with me it won’t make any difference because they have all helped me get where I am at one time or another. That’s the closest I ever come to trust. I advise everyone, especially a home-based entrepreneur with all their assets plus borrowed money on the line, to assume the same position. You have to trust a few people a little to operate a business; what you must do is investigate the background of every important associate including credit, police record, and previous employment, as well as any licensing agency like real estate, insurance, or financial services for infractions. This kind of background check costs up to $100 for most checking companies. This is one expense you should never neglect.

Why do others constantly try to take advantage of people who appear to have some degree of wealth? Who knows? You would think people would want to live in peace with all their neighbors. But it’s easy to see this is not so; consider all the wars and conflicts in our world today. Perhaps this is basic human instinct, imbedded in our DNA, to protect what is ours against everyone else. Basic human nature that includes greed, jealousy, and the need to blame someone else for all misfortunes could be the cause. Regardless of the reason, all of us who are entrepreneurs must maintain our vigilance however we can.

Another thing to consider is terrorism, which seems to have become more significant in recent years. Psychologists don’t know what makes many present-day terrorists; it seems that many of these people are encouraged by violent and radical religious beliefs. Some of the younger ones have no idea why they are terrorists; others seem to believe they are going to an eternal reward with many women at their disposal forever. Whatever the reason, they have conducted unbelievable horror around the world, including the World Trade Center in 2001. That could have been prevented if our law enforcement agencies had better communication, which seems to have improved. However, the commission that investigated the circumstances of this catastrophe seems to have been more interested in assigning blame rather than determining causes and ways to deter such acts in the future. My cousin was missing for a few days but turned up safe. The reason I mention terrorism is that people around the world, for unknown reasons, have chosen to hack into all kinds of computer systems. They can steal credit information, e-mail lists, passwords, use your computer to spread viruses, and even destroy critical information which can shut down your entire business. You must do whatever is needed to protect against such acts. These people are vicious, they can kill on occasion and they are located all over the world.

To illustrate what can happen to unsuspecting entrepreneurs, let me tell you about a few situations that have recently happened to me. Bad things often occur when one is in a period of unusual stress or vulnerability as I was when a series of personal problems left me without a job. This is a frequent thing for many people because of our volatile job market, and it always imposes high stress on the unemployed. My start-over was in the real estate business, a field I knew little about at the time. Since all these bad things happened to me, I decided there must be something that needed changing in my life. I had never placed much trust in anyone so I thought if I started to accept those around me in a more open manner I would benefit from the good wishes of everyone. Bad choice!

My managing real estate broker hired a likeable agent and we immediately became friends. We lived close to each other and began a social relationship. He appeared to have sales skills I did not have, and I had some knowledge of the local market that he did not. It looked like a perfect situation, so we established a partnership where we would share the commissions generated by our mutual efforts. During this early quiet time, I did notice that he was on the phone without a break both in our office, at his home, and via cell phone. What I did not realize was the managing broker never checked his references and I did not think a check was necessary because I assumed the broker had done this.

My “partner” found that our broker was having some temporary financial problems and he decided to steal the business. He did this by trying to get me to quit and by spreading lies about the broker causing her financial embarrassment. The broker did a late check, after all the problems, and found that most of his time on the telephone was spent running his sports betting business; he was a bookie! He had ties to the Mafia and had served some prison time. When he was hired, he had just had all his businesses and homes confiscated in another town by the FBI in connection with more organized gambling operations. His reputation was well known locally if one of us had only asked.

LESSON LEARNED: Request references and check them well.

Most people will associate identity theft with use of the Internet. This was true before the use of secure pages marked by the “https” URL or the lock at the bottom right of your page. I’ve used the net for transactions extensively since its beginning and have never experienced a problem this way. The only credit card problem I have had so far was giving my card number over an 800 number to buy an $8.00 snoring remedy which did not work. The person on the other end immediately subscribed me to five programs they were pushing and added about $750 to my account in less than a week. The Internet actually saved me this time: I check my credit cards once a day and quickly caught this situation. Capital One fixed it in two days! But I never call one of those numbers that are advertised; if they don’t have a URL I don’t mess with them. The best protection for this kind of theft is to check your credit cards and bank accounts daily. The credit card companies and banks all have ways to set this up on the Internet so there is really no excuse for not protecting yourself in this very basic and simple way.

Something else no one should do is give their Social Security number over the Internet. If you are in business you can’t operate without furnishing those who pay you with some kind of tax number if you live in the US. Instead of your Social Security number give them your Employer Identification Number (EIN). If you don’t have an EIN, you can easily get it here.

One final example of betrayed trust has to do with a reputable Internet company I bought into; this episode cost me a couple of thousand dollars. There is really no way anyone can avoid this kind of thing, because we have no knowledge or control over what others do with their own businesses. What you can do is to quit if you ever begin to receive a lot of changes in the plan to which you initially subscribed. This is usually an indication of errors in the initial plan, and you need to run before spending any more money. Cut your losses and get out. It’s just like the stock market; if your stock is going south, quit. Lots of people hold on, thinking it will recover, but this seldom happens. You can always get back in when things begin to improve.

What happened with the Internet company I mentioned was they associated themselves with a lot of greedy people with no background checks. These people misused passwords, stole money that all participants had put in (including me), and made off with the entire database of names and information. They even corrupted the Forum to bad mouth the company itself! The business evaporated and simply shut down. Never trust without checking.

The last thing on my mind is the role of friends. You can’t always trust them, either. Nobody wants to pay for anything; that’s a fact brought home to me a few years ago by an article in a prominent national business magazine. At the time, I depended on commissions from sales for my income, and I found this article disgusting. It detailed many ways to get free information from attorneys, accountants, insurance agents, real estate sales people and others whose livelihood depends on fees or commissions. Friends are like this, as well. If you are in a fee-type business, they will try to get all the free information they can, which is a cost to you in time and money. One of my closest friends beat me down on a commission from $30,000 to $8,000 just because they knew how much I needed the money. Don’t think for a minute I’m alone in this kind of situation. We all are treated the same by our public, no matter who they are.

To protect yourself, do the checking we discussed, be careful how you use your credit card, and use an EIN instead of a Social Security number. Ask for references and check them regardless of cost.

Entrepreneurs, BEWARE!

Yank is a home-based entrepreneur and freelance business writer living in Hurricane Alley, North Carolina, USA. His Website is http://www.alternate-choice.com and you may contact Yank at mailtonewideas@alternate-choice.com.