A "friend" is coming over to tell me about an "investment opportunity" in which you buy an already placed credit card machine (or even better several). It allegedly returns a month for the rest of your life. The machines are about 00. I know it’s a scam, but can anyone give me details on how it works?
….uhhh
It seems every couple weeks one of my friends finds that latest scam and I have to unwrap it for them to show them what it is. I’ve recently had to deal with friends brainwashed like a residents at Jones town by Primerica and YTB. Cool Aid anyone?:)
Usually my scam-dar is pretty good at picking out stuff like this, but I am not so sure that this is a scam.
As a bookkeeper to several small merchants, I actually know a little bit about these machines. They are generally bought or rented from companies, who then charge for access services.
I don’t think it is an outright scam, just that it is simply a bad business decision.
Think about it, 1000/15=66 months to earn back your $1000 investment. Not counting for inflation. If you account for inflation you don’t make a profit for over 73 months (6 years!!).
I guess that is where it starts to sound like a scam. Buy used machines from somebody and hope like hell you make a profit in 6 years.
Why not just put the money in a bank account and start earning a profit immediately?
Get a 6 year Certificate of Deposit for that $1,000 and you will have a hell of a lot more money at the end than the measely $15 bucks, and a decade-old credit machine that is too obsolete to sell for anything other than a doorstop.
If the company/offerer of this actually has a website post it or email it to me, or just post the information to this question. I will use my fancy book-learnin’ to get a better evaluation on this.
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I tried to google for this type of scam and came up empty. There are a lot of ways to scam people for credit cards, and this could be one of them, but if it is, it is not a widely known method.
The other poster rightfully noted that if you are the owner, you will have to pay for repairs and other such things if it breaks, further reducing any potential profit margin. (think 7 or more years to get a dollar of actual profit)
Yes, I have heard of this scam.
The details are fuzzy, but I seem to remember that they get you to buy the machine and pay a monthly processing fee. When you find that no one is using it, they will not return your money.
This kind of CC processing is also likely to be illegal and you may find yourself being audited and/or charged with unlicensed financial activity by the federal government.
Run, don’t walk, away from this. If you have any love & concern for your friend, tell him/her to run away as well.
Try googling for credit card processing scams, maybe that would help.
with a lot of these look for return on investment.
If you spend $1000 to make $15 a month thats 5 years (66 months ) before you have even repaid your initial outlay.
What liability do you have for repairs , service, damage to the machine ?
check out http://scamsbeware.com – consumer resource center. all kinds of scam info there, there’s also a forum where u can keep up to date on current and future scams. And if u have any questions just post it in the forum and somebody out there should help u. http://scamsbeware.com/forum Best of all it’s FREE 2 join, just register at the top it’ll be worth it for u to keep up 2 date on scams/fraud. Hope this helps.