PRESS RELEASE
State Securities Department Targets Florida and California Promoters of Business Opportunities
 
For Immediate Release
Monday, March 06, 2000 
 
Contact: Patty Labarthe, Enforcement Attorney
  Oklahoma Department of Securities
  405-280-7700
 
 
Oklahoma City/////  Irving Faught, Administrator of the Oklahoma Department of Securities, has targeted two companies offering business opportunities in Oklahoma. The first action was initiated against Encore Communications, Inc., a Florida-based firm, and Mike Drucker. Encore marketed pay telephone equipment and services through newspaper advertisements and promised to assist in finding locations for the pay telephones. The second action was taken against Absolute Solution Technologies, Inc., a California based business, and its President, Douglas T. Beaver. Absolute Solution Technologies sold medical claims billing software through newspaper advertisements and promised to provide clients for the business.

The cases are part of Project Biz-illion$, a federal-state crackdown announced today on swindlers who conjure up images of high profits through ownership of phone and vending machine routes and work-at-home schemes like medical billing opportunities. Federal authorities estimate that consumers lose tens of millions of dollars each year to these scams.

"These types of business opportunities often fail because the promoters are working to put money in their own pockets, instead of offering a legitimate business opportunity," said Faught. "The promoters claim investors can make $100,000.00 a year or more on investments of under $10,000.00 and they often represent that you only have to work part time to do so. The result is that most, if not all, investors lose their shirts."

Additional Project Biz-illion$ cases have been brought by numerous other states and the FTC. As part of the project, the states and the FTC released a series of consumer education materials with tips on checking out this type of business opportunity. Their top tips are:

? Get all earnings claims in writing. Be sure the information includes the number and percentage of recent or current clients who have earned at least as much as the promoter claims. If the promoter hesitates or refuses to give the information in writing, find another business opportunity.
? Interview references provided by the promoter of the business opportunity. The FTC requires business opportunity promoters to give potential purchasers the names, addresses and phone numbers of at least 10 prior purchasers who live the closest to the potential purchaser. Talk to each prior purchaser in person, preferably where their business operates. This may help reduce your risk of being mislead by "shills."
? Study the business opportunity's franchise disclosure document. Under the FTC Franchise Rule, most business opportunity promoters are required to provide this document to potential purchasers. It includes information about the company, including whether it has faced any lawsuits from prior purchasers or lawsuits alleging fraud.
? Contact the attorney general's office, state or county consumer protection agency and securities department in the area in which the business opportunity promoter is based and where you live. Ask whether there's a history of unresolved complaints. Remember that a complaint record may indicate questionable business practices, but a lack of complaints doesn't necessarily mean the promoter and the business opportunity are without problems. Unscrupulous dealers often change names and locations to hide a history of complaints.
? If the business opportunity involves selling products from well-known companies, call the legal department of the company whose merchandise is being promoted. Find out whether the business opportunity and its promoter are affiliated with the company. Ask whether the company has ever threatened trademark action against the business opportunity promoter.
? Consult an attorney, accountant or other business advisor before you put any money down or sign any papers. Entering into a business opportunity can be costly, so it's best to have an expert check out the contract first. If the business opportunity promoter requires a deposit, ask your attorney to establish an escrow account where the deposit can be maintained by a third party until a deal is made.

This press release and other information about business opportunities, are available on the Oklahoma Department of Securities' web site at www.securities.state.ok.us, or by writing to the Department at First National Center, 120 North Robinson, Suite 860, Oklahoma City, OK 73102; or by calling the Department at 405-280-7700. The FTC consumer education materials, along with other information about Project Biz-illion$ are available free on the FTC's web site at www.ftc.gov, or by writing the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue N.W., Washington, D.C. 20580; or by calling the FTC at 202-326-2222; TTY for the hearing impaired 202-326-2502.
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This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.