As an entrepreneur, you are likely to receive countless offers, deals and proposals coming your way. But how do you differentiate genuine opportunities from a potential scam? This article aims to clarify the murky waters.
Verify the company.
Put simply, ensure that any company you deal with actually exists! This is easily done by checking with the company registration body in the jurisdiction of the company. In the UK you would need to check with Companies House.
In the US you would need to look at the departments in each US State for company registration details. If the company implies in its promotional material that it is incorporated and does not appear in any official register that could be a major red flag.
Verify the physical address.
It’s very important that you find out where the company is located. If the offer were to go sour, where would you serve your demands?
If you followed the steps above you would know that the company actually exists, but do the address details match? You need to compare the official record and check if the address matches the contact details that appear in the promotional material.
Double-check there are not any additional office locations that may not appear in the official record. A simple search online for the name of the company should reveal any. If the details do not match, the promotional material may be a scam.
Who are the owners or founders?
This step is especially important if you are dealing with an individual rather than an incorporated company. Does the promotional material offer up the full name of the founder?
Can you verify the name of the founder in the company registration records as described above? What do you see when you search for the name of the founder online?
Do they have articles and write-ups in known publications? Do they have a website? Or is there barely anything at all? If the founder is anonymous, this founder could be very new or it could easily be a scam, tread carefully.
Is there a contact telephone number?
Any legitimate business should have a contact telephone number. Does the contact number match those in official records? What happens if you call the number, is the number active? Watch out for premium rate number scams.
Are you being contacted from a free email domain?
If you get any promotional offer from a Hotmail, Gmail, Yahoo, etc address you need to have your guard up. Any legitimate company would have their own company domain with associated email, for example, “info@companyxyz.com”. A free email domain suggests that the person reaching out for business is, at best new to the game or at worst, a possible scam.
How long has the website been active?
A simple check on sites like https://www.whois.com/ will reveal how long the website has been active for. Enter the domain name of the website, ie (xyzcompany.com) Pay particular attention to the “Registered On” date. If this date is quite recent, either this company is very new or it could be a scam.
Does the website have terms and conditions?
If the website does not have any terms and conditions or there is no website at all this could be a big warning sign. Most companies are very eager to state their terms of business for obvious reasons. If there are none, you could be dealing with a scam.
For crypto, check on the relevant blockchain.
For cryptocurrency offerings ensure that the coin, token or asset actually exists by searching on the relevant blockchain.
For Ethereum assets:
For Cardano based assets:
For Binance based tokens or assets.
https://www.bscscan.com/tokens
Is the company registered with a recognised body?
If the company is offering financial services this activity is usually regulated in most jurisdictions. You would need to check the FCA in the UK and the SEC, in the USA. As before, the company should be incorporated and you should check if it appears in any official company registration database. https://www.gov.uk/government/publications/overseas-registries/overseas-registries
Double-check you are dealing with the genuine company or individual.
So, you’ve done the checks on the company or on the founder and it all looks good. But how sure are you that the person reaching out is who they say they are? Scammers will sometimes pose as individuals or companies with a recognised fake profile to get through the steps above.
You should reach out via an official website or use contact details from the official register to verify this is the genuine company or individual.
Do not rely on social media alone to verify your contact.
Social media accounts can be faked and herd mentality can mean lots of people will be scammed by a seemingly trustworthy social media presence. Do your own research, to verify the contact.
Is the contact promising high gains in a short space of time?
If the contact is offering high gains in a very short space of time or offering up unrealistic outcomes, you could be dealing with a scam. Puffery such as, “this beer is probably the best in the world”, is probably OK. Claims such as, “We guarantee this investment will go up 20X” is probably not OK. If it’s too good to be true…
If you follow the above you should stay scam-free, without missing out on genuine opportunities. Stay safe!
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***Disclaimer: This article is not financial advice and is given for informational and entertainment purposes only. Readers should conduct their own research and not invest more than they can afford to lose. Crypto is extremely volatile, and as such can drop in value considerably without notice. Pop Up World has a global presence and is not specifically targeting any jurisdiction with its content. Any crypto references are not intended for UK businesses or consumers. You should always seek legal advice to understand if the use or investment in crypto is allowed in your jurisdiction.
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***Disclaimer: This article is not financial advice and is given for informational and entertainment purposes only. Readers should conduct their own research and not invest more than they can afford to lose. Crypto is extremely volatile, and as such can drop in value considerably without notice. Pop Up World has a global presence and is not specifically targeting any jurisdiction with its content. Any crypto references are not intended for UK businesses or consumers. You should always seek legal advice to understand if the use or investment in crypto is allowed in your jurisdiction.
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