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 prices, cut with who knows what, or injected in unsafe ways.

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 doing 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.

Many home use lasers are scams to avoid. Only use devices cleared by FDA. At this time, these devices do not deliver permanent results.

The only available method for removing hair permanently at home is a used professional electrolysis unit or a home-use device that allows a metal probe to be inserted in the hair follicle.

Pretty much anything sold on eBay or other online auction sites will not work as claimed.

Credit scams

These seek to repair or partition bad or nonexistent credit, and are sometimes illegal. There are legitimate 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

The Bottom Line about Multilevel Marketing PLans and Pyramid Schemes

Get rich quick scams and myths

Prepared statement on "Pyramid Schemes"