Famous Characters

Individuals who are in business for themselves or interested in starting their own business should beware of any get rich quick schemes which promise riches and short work weeks as a result of buying into a business opportunity. In California certain companies selling business opportunities where the initial investment or more than $500 but requires an initial cash payment of less than fifty thousand dollars ($50 000)  are required to be registered with the Attorney General's office as a Seller Assisted Marketing Plan (“SAMP”).

~ SAMP sellers are required to file with the Attorney General's Office prior to advertising or selling business opportunities in California. The Attorney General's Office then reviews the information for compliance with law before the company can begin selling in California. The SAMP law requires that the seller give the same information to prospective purchasers at least 48 hours before the purchaser signs any contract or pays the seller any money.

~ As part of the filing the prospective seller must provide the Attorney General's Office with information about the company including; the people running the company the financial condition of the company and the length of time that the company has been in business and a copy of the contract they plan to have the purchasers sign. The SAMP Act prohibits statements about potential earnings unless data is given about average earnings and prohibits charging payment of more than 20% in advance of delivering goods and services.

~ SAMP offerings to provide certain disclosures early in the process of the sale including exactly what the seller will do for you any training required and promised by the seller payment information etc.  If the seller made any statements to you about earnings potential he/she is required to provide you data substantiating such claims when they are made or soon after if they were made by mail or telephone.  If such representations were made the disclosure statement must include a statement that no guarantee of earnings or ranges of earnings can be made.

~ Other information such as whether the seller or others connected with the company have ever been convicted of a felony or misdemeanor or filed bankruptcy must be provided at least 48 hours before you execute the contract or pay anything but this information may be combined in the disclosure sheet.

~ The company offers a business opportunity selling excess inventory products. Our experience with some seller-assisted marketing plans (SAMP) is that claims about the plans’ income potential the opportunity to work from your home--part time if you wish--and the ability to realize success with little or no experience are unfounded.  Complaints about these types of plans allege that the promised assistance was not provided at least to the extent represented and that the product or service quality or marketability was misrepresented.

~ Consumers who are considering entering into a business opportunity should consider the following prior to making any commitments or providing any up-front money:

~ ·         Be skeptical about earnings claims that sound too good to be true;

~ ·         Exercise caution when it comes to newspaper and magazine ads that contain little more than glowing promises and an 800 number;

~ ·         Obtain and review the government-mandated disclosure documents before any money is exchanged;

~ ·         Make sure that the business opportunity is registered for sale with the California Attorney General's Office if it is a SAMP as described above;

~ ·         Examine the disclosure document to determine what the average investor has earned in the plan;

~ ·         Talk to current investors;

~ ·         Research the business and the market; and

~ ·         Do not automatically assume those promises of prime sites speedy repairs and ongoing assistance will be there when you need them.

~ For the most up to date licensing information or to obtain additional information relating to SAMP offers contact the State of California Attorney General’s Office by calling (800) 952-5225 (CA only) or (916) 322-3360.