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Consumer scams and the transgender community
This is a work in progress.
Our community can be a scam artist's dream. We are often facing difficult financial
decisions with limited funds, and some of us are also faced with being unemployed,
underemployed, and sometimes on disability or public assistance. In addition,
many of us are not out or in the process of transition, and can't afford to
come forward for both financial and personal reasons when we are ripped off.
There are plenty of people out there who have no problem preying on your desperation
and selling false hope in the form of products that don't do what they claim,
or ways to make money that are just scams.
One of the most frustrating things is that there are even some women in our
community who gouge us with high prices or even sell scam products, sometimes
unwittingly.
As many of you know, I am a proud affiliate of QuackWatch,
which covers a wide variety of scams involving health-related issues.
I have also submitted information to the US Food
and Drug Administration, the US Federal
Trade Commission, The Better
Business Bureau, various states
attorneys general. One of my main goals is to help everyone make informed
purchasing decisions, so that you can make the most of limited resources and
not waste time or money.
Remember, if something sounds too good to be true, it probably is.
Hormone scams
There was a time not long ago when most women in our community got their
hormones on the street via the black market. These were often marked up to
exorbitant proices, cut with
Herbal products ("phytoestrogens") with little or no published
data indicating safety or effectiveness should be avoided.
Overseas pharmacy scams have popped up all over the internet and in your
email box. Spammers have inundated this category, making it even harder to
find legitimate places, though there are a few that stay ahead of regulators
and customs officials. Even with the legitimate places, you are better off
getting a prescription here and doiong everything under medical supervision.
Hair removal scams
I cover these extensively on hairfacts and hairtell, and I have a list of
recommended practitioners for you to do further research.
If it's painless, it's not permanent, and vice versa.
At this time, home use lasers are scams to avoid.
The only available method for removing hair permanently at home is a used
professional electrolysis unit or a
Pretty much anything sold on eBay or other online au ction sites will not
work as claimed.
Credit scams
These seek to repair or partition bad or nonexistent credit, and are sometimes
illegal. There are legitikmate consumer credit counseling places that can
help you restructure your debt, but they will not ask for a big fee up front.
Beware of credit card offers that look like they have a good rate, but charge
huge monthly fees or processing charges.
Employment scams
Be careful of work-at-home plans or jobs that require you to send them money
in order to start.
Many people in our community have a hard time interviewing when in the midst
of transition, so they find themselves with jobs that don't involve direct
contact, like telemarketing or web-based marketing. Many of these companies
are not very reputable, so be sure you understand how you will get paid.
Multilevel marketing (MLM)
Pyramid schemes now come in so many forms that they may be difficult to recognize
immediately. However, they all share one overriding characteristic. They promise
consumers or investors large profits based primarily on recruiting others
to join their program, not based on profits from any real investment or real
sale of goods to the public. Some schemes may purport to sell a product, but
they often simply use the product to hide their pyramid structure. There are
two tell-tale signs that a product is simply being used to disguise a pyramid
scheme: inventory loading and a lack of retail sales. Inventory loading occurs
when a company's incentive program forces recruits to buy more products than
they could ever sell, often at inflated prices. If this occurs throughout
the company's distribution system, the people at the top of the pyramid reap
substantial profits, even though little or no product moves to market. The
people at the bottom make excessive payments for inventory that simply accumulates
in their basements. A lack of retail sales is also a red flag that a pyramid
exists. Many pyramid schemes will claim that their product is selling like
hot cakes. However, on closer examination, the sales occur only between people
inside the pyramid structure or to new recruits joining the structure, not
to consumers out in the general public.
A Ponzi scheme is closely related to a pyramid because it revolves around
continuous recruiting, but in a Ponzi scheme the promoter generally has no
product to sell and pays no commission to investors who recruit new "members."
Instead, the promoter collects payments from a stream of people, promising
them all the same high rate of return on a short-term investment. In the typical
Ponzi scheme, there is no real investment opportunity, and the promoter just
uses the money from new recruits to pay obligations owed to longer-standing
members of the program.
Tips to avoid pyramid schemes
Avoid any plan that offers commissions to recruit new distributors.
Beware of plans that ask you to spend money on costly inventory.
Be cautious of claims that you will make money by recruiting new members
instead of on sales you make yourself.
Beware of promises about high profits or claims about "miracle"
products.
Be cautious about references; they could be "shills" by the promoter.
Don’t pay money or sign contracts in a high-pressure situation.
Check out all offers with your local Better Business Bureau and state Attorney
General.
Links with more information
MLM Watch (http://www.mlmwatch.org/)
has one of the best overviews and up-to-date lists.
How
to Identify a Product-Based Pyramid Scheme ("Recruiting MLM")
FTC Facts
for consumers: Multilevel Marketing Plans (PDF: requires reader)
Getting
to the Bottom of Pyramid Schemes
Prepared
statement on "Pyramid Schemes"
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