How Can I Find Out If a Company Is Legitimate?

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Fraud is on the rise, according to the Federal Trade Commission. As of 2007, over 30 million Americans were the victim of fraud. This is roughly 13.5 percent of the American population. Some of the most common fraud scams include lottery club memberships, work at home opportunities and prize promotion scams. If you don't know much about a company, it's important to be safe. The Federal Trade Commission, Better Business Bureau and your state attorney general's office can help you find out if a company is legitimate.

  • Collect full contact information. Before investigating if a company is legitimate, you'll need some information. Get the full address of the company's main office, phone number and website address. This will help you research the company a little further.

  • Contact the Federal Trade Commission (FTC). The Federal Trade Commission is charged with protecting consumers. It tracks complaints about companies and identifies theft scams. If you have questions about a company, contact the FTC to determine if it has negative reports on file (see References).

  • Check out the Better Business Bureau (BBB). The Better Business Bureau also tracks a company's complaint history. When the BBB receives a complaint, it tracks the company's responsiveness dealing with the issue. Based on this history, it assigns companies a rating between "A" and "F" ("A" is the best and "F" is the worst). Consumers can find companies through the BBB search function by name, website or address.

  • Contact your state attorney general's office. A state attorney general serves as the "people's lawyer," according to the National Association of Attorneys General (NAAG). This office tracks consumer complaints about companies that aren't using legitimate businesses practices. The state attorney general may also build a case against these companies to protect the public's interest. Find your state attorney general's contact information by contacting the National Association of Attorneys General (see References).

Tips & Warnings

  • If a company is demanding a large amount of money upfront without much explanation of services, this could be a red flag, according to the FTC. Always thoroughly research a company before giving it money.
  • Don't neglect to do research about companies abroad. The FTC also collects information about cross-border complaints. If you have a problem with an international business, you can also make a complaint with the FTC.

References

  • Photo Credit business image by peter Hires Images from Fotolia.com
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