As if inventors and business startups don't have enough problems, a new type of inventor scam is targeting inventors. One of my clients recently was contacted by a representative of Shop America Network. They said they had seen her product at a trade show, and they made a practice of contacting promising new products. They said they would prepare an infomercial for her product, and air it on TV. They said they rent time from all the major cable shopping channels, and it would be on the air for a lot of time.
Well my client, we'll call her Mary, did some checking. She called the Better Business Bureau in the town the company was located, and she called the television stations that the company said would air the commercial. The BBB didn't have any complaints, and each TV station said that the company did a lot of air time with them, and were constantly on the air. She was told by SAN that the about 1 in 4 of their customers saw sales of 80,000 units, and told her to be prepared to move that kind of volume.
The company had her fly to Florida to shoot the commercial. They asked that she redesign her product to better fit the target audience. This was on a product which has been on the market for 5 years, with annual sales of 50,000 units, approximately.
Mary plunked down $16,000, shot the commercial, and waited for the sales to flow in. A total of 3 units were sold from the ad, and she started to wonder why sales were so low. She found from internet sites that the TV stations she had called for referrrals on the SAN were all owned by SAN. They were tiny broadcast stations, not cable, and their broadcast range was less than a city block. So the ads could be on 24/7, but only a few homes would ever be able to recieve the signal. The home shopping channels told Mary that they didn't rent air time, so that claim by SAN was a lie.
The Florida Attorney General is currently either suing or investigating the company, but Mary's $16,000 is long gone. The company will probably reform in a new state, or with a new name. They are apparently doing business now as INCATALOG Inc. These people are predators, and should be prosecuted to the full extent of the law. There are discussions of Shop America Network at the Bob Vilas discussion board, and at ripoffreport.com.
Mary's business survived, but the experience set her back two years in the growth of her business, and could have killed the business. Inventors beware!! Perhaps the best tool to protect yourself from these kinds of scams is the ask the questions they are required by law to answer truthfully, and in writing, and check the internet for complaints about them. Ripoffreport also lists the owner and sales peoples name's, so check out the name of the salesperson you talk to.
The advent of technology seems to have made such scams an ever-increasing problem, and for a number of reasons. First, it has allowed such operations to start up in the first place, and to employ sophisticated methods for avoiding detection and duping consumers. But at the same time, newer and newer technologies seem very inviting to the small business owner. It makes a kind of sense that a company such as this one claims to be could, in fact, be able to reach a target audience in the way they claim. We want to believe it because everyday we see the power of technology to reach customers. I think the best solutions are those you suggest – to utilize the power of technology – internet databases that list these predators, for instance -- in order to fight these sort of people with their own weapons.
Posted by: Computers | June 26, 2007 at 11:41 PM
You seem to have got the niche from the root, Awesome work
Regards
Stuart
Posted by: watch lost | October 30, 2009 at 05:59 AM