What Is A Scam And How Can We Tell?

I see way too many people throwing out the term SCAM when a system or product does not produce the results they were expecting. Does our expectations not being met determine or give us the right to call a product or service a scam. So what is a scam and how do we identify a scam from just a bad product or service?

The definition of a SCAM is a business, product or scheme that fraudulently represents some result that they know the product or service will never produce for the sole purpose of taking our money. Once we discover the fraud it is usually impossible to get our money back or get out of the system. In some cases people get hooked into paying thousands of dollars with no way to recover the loss.

Scams come in all forms, both online and offline.

This is an Example of a Scam, the purpose in this case is to steal credit card information

I had a customer of mine call me up asking if I knew anything about Google charging for their Google map listings. I informed him that the service was free and that whoever this person was they were trying to pull a fast one. As it turns out they were trying to get him to give them his credit card information but thankfully he did not oblige.

Different Types of Online Scams

  • Fake Charities
    • People present a very touching case of a situation of a person or family in desperate need. They set up an account that is being used to collect donations for this person. It turns out none of this is true and the people are doing this simply yo get your money – this is a SCAM.
  • Fake Investments
    • Lots of methods have been invented that claim to make fast push button money. Stick in $10 and get $100 back. Be careful when it looks too good to be true. – This is probably a SCAM
  • Winner of some Lottery
    • You have been chosen or you won some lottery and after a few questions they just need your banking information to deposit the money into your bank account. – This is a SCAM
  • Greeting Card Scam
    • You receive an Email claiming that a friend has sent you an electronic holiday card.  Once opened a malicious piece of software is installed onto your computer to harvest your important information or install malware. This is a SCAM
  • Phishing
    • You receive emails pretending to be a bank or business you work with. They claim you are overdrawn on your account or you payment did not go through. They ask you to send them the payment or they ask for banking information for verification. Whatever information they are seeking it will be used to take your money – This is a SCAM
  • CatFish
    • Luring people into a relationship with a fake online persona with the intention of deceiving them for some financial gain or even worse. – This is a SCAM
  • Auction Fraud
    • Selling items online at say E-bay when these items are fake for example tickets to an event or concert. – This is a SCAM
  • Fake Software
    • A popup message comes up on your screen claiming that your computer is infected and you need to download their software to disinfect your computer or others to speed up your computer.  Once installed this piece of software can do it’s nasty business of stealing important information. It may install malware a Trojan or a keylogger. – This is a SCAM
  • Threats or extortion
    • Where you receive a phone call claiming that a lawsuit is being filed against you and that you need to call back right away if you want this action to be stopped. When you call they explain for a few thousand dollars you can save yourself tens of thousands in legal bills by making this lawsuit action stop. – This is a SCAM

The list of SCAMS are endless as there is so much of it today.  These criminals are inventive, sneaky, hard to identify and even harder to catch.  Everyone needs to be aware of these scams and how to catch them before they catch you and steal your money damage your computer or endanger your life.


I am going to focus on the fake online courses and opportunities as they are more relevant to people trying to learn online marketing techniques or how to make money online.

So what Makes Something a SCAM?

The key word is FRAUD – to be a SCAM there must be some type of fraudulent promise or misrepresentation that makes it a scam. Just because a system is expensive or they show the results of the few who have done super well with the system does not make it a fraud. If they promise that you can make the same kind of results as the person in their demonstration then that constitutes fraud. Most businesses are careful not to promise that you can do the same as others – they only show you what is possible to achieve.

How the marketer hooks his audience is he sells to the dream – the desired result of his audience. Once he gets you into his system, usually at a reasonable price he will then promote what is called an up-sell which are added resources or systems that will benefit the person in making his system work. This again is not fraud but it does get very expensive very quickly.

Many of these up-sells are hidden from you and are forced upon you with the claim that you will never see these items again at such a reasonable price. This creates scarcity and urgency which are tools that marketers love using since it works so very well. Again this is not a scam – it may feel unethical and like someone is robbing you – but no one is giving any false claim.

Why do some systems have these expensive up-sells?

Ultimately the reason is that it makes them lots of money. But sometimes these systems have incorporated expensive items into their programs and packaged them in a way that they feel they can sell to people more easily.

Lets look at an example:

2 different but equal products.

Both have a low price entry cost of $49

But after this the systems differ in many ways.


You are given the core training.

Once inside the system they explain that they have extra training that can help for $199

It includes – Youtube + Google + Facebook + Instagram (for $199)

They have weekly group coaching sessions for $29/month

If you are having trouble with their system they have 1 on 1 coaching for $3000


You are delivered the core training through a membership site.

They have webinars that show off their different packages that you can achieve much higher results with these packages.

Package 1 – has weekly group coaching and mentoring + Email supremacy for $999

Package 2 – has weekly group coaching and mentoring + Individual email support + you get YouTube Explosion + Email Supremacy + Instagram Capture for $2999

Package 3 – Everything in package 1 & 2 plus you get Google King + Easy Content Builder + Facebook Unleashed + 1 on 1 coaching. – All for $9999

System #2 promotes their packages hard and makes them look like a must have item. Without package 3 you literally feel that you are missing out on a vital opportunity that could change your life.


Is System #2 a Scam?


In reality System #2 it is not – it is expensive and it is being run by some very intuitive marketers – but it is not a scam.

System 1 is more simple and less marketing is being done to it’s members.

The results in both systems may be the same but how members are treated and viewed by the owners is probably at the core of the difference.

System 1 – The owner views his members as people even friends he is trying to help succeed online. He is trying to offer services that will really help them move forward.

System 2 – The owner sees his members as clients and potential for more sales that he is willing to help for a price. He has a high valuation for his systems and he expects his members to pay for his help.

Neither system 1 nor system 2 are Scams – but how they are run and how the members are treated are completely different. Yet both systems will have members that are very happy with the service and others that will call it all a scam.

When should we call a system a Scam?

Again we should be careful in calling a system a scam.

It may be expensive – It may have a ton of hidden costs – It may give lousy or no support.

It may be just a bad system.

– Call it Expensive – Call it too much marketing to members – Call it lousy for support.
But it is not be a scam – Just simply a bad product that was appealing on the outside – not so good on the inside.

CASE STUDY – Wealthy Affiliate

Since I promote Wealthy Affiliate and I highly recommend it I thought it would be appropriate to look at it more closely.  The reason is some do call this system a scam – again because they do not get the desired outcome.

What does Wealthy Affiliate Offer?

  • Wealthy Affiliate will help you choose a direction of your business from over 1,000,000 different niches.
  •  Building your very own website is SIMPLE within Wealthy Affiliate. The process takes less than 30 seconds to build a beautiful looking, mobile, and revenue ready website. State of the art, ultra powerful and secure hosting will allow you to grow your business with Wealthy Affiliate.
  • At Wealthy Affiliate you will learn all about the most current traffic techniques and how you can get an ABUNDANCE of relevant customers to your website. Wealthy Affiliate members OWN Google rankings, and own a huge share of ALL traffic online. That is a fact.
  • Without spending a dime, you can promote all the top brands in the world through affiliate programs.

Now what does Wealthy Affiliate actually give you:

  • Wealthy affiliate lets you try a limited package for free for as long as you want
  • ________________________________
  • For Premium Members (paying members)
  • Wealthy Affiliate includes powerful Hosting
  • Wealthy Affiliate includes keyword research tools
  • Wealthy Affiliate includes website security
  • Wealthy Affiliate includes daily backups of websites
  • Wealthy Affiliate includes competition analysis tools
  • Wealthy Affiliate includes weekly live training
  • Wealthy Affiliate includes 24/7 support
  • Wealthy Affiliate has an active membership
  • Wealthy Affiliate has a core training for building an online business.

I will say there are some exaggerations in their offer but the core of the offer is true.

NOW – let us say I take their offer and I do NOT succeed with their system.


If I do not put in the work – If I quit or get distracted – If I fail at succeeding with Wealthy Affiliate.  The question remains as to why did I fail?

Is Wealthy Affiliate a Scam?

No it is not – it has failed me but it is mostly my own fault.

The system at Wealthy Affiliate would not be the cause but some distraction or my feeling of being unsure and unable to take the next step would be the real reason for my failing.

Conclusion – What Is A Scam?

The conclusion here is that before joining a program people need to do research on the program they are thinking of joining. You need to be aware of not only the up front costs but all the hidden costs that are within the system. Those systems may indeed get people results but the costs may be a hindrance to their success.

I think you need to look at the core of those who are putting this program together.

  • Are they really trying to help their membership or are they trying to exploit them. You need to judge for yourself.
  • Who are the creators?
  • Are all the costs up front?
  • Are they going to support you?
  • Are they within your budget?
  • Are there lots of positive reviews for the product?

Just remember – just because someone cries SCAM does not make it true.

Do your research before joining any program or buying any online product.

Categories: Training


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