PHOENIX (Legal Newsline) - Arizona Attorney General Tom Horne praised a new state law on Tuesday that will give seniors more protection from multiple new telephone solicitation scams.
Consumers have lost millions of dollars to scam artists who promise to create work-at-home businesses guaranteeing substantial incomes for consumers, Horne claims. When the venture does not make any money, consumers are left with large credit card bills or empty bank accounts, he said.
"Consumers who are thinking about buying any type of business should be given sufficient information to make an informed decision as well as enough time to review the information," Horne said.
"Legitimate businesses are willing to give potential purchasers a full description of their program, including the products involved, the cost to consumers and a proper notice of cancellation. Unfortunately, scam artists take advantage of some consumers, costing Arizonans millions of dollars every year. This new law will be a valuable tool for prosecuting these criminal predators."
Under the new law, any individual or company selling business opportunities or any advertising or other services associated with business opportunities must take part in several regulatory activities.
The actions include filing an annual registration with the Arizona secretary of state identifying the principals of the business and providing their previous industry history. They must also maintain a $100,000 bond with the Arizona treasurer. The proceeds of the bond are payable to consumers if the seller defrauds them.
In addition, the individual or company must give specific, written disclosures to possible purchasers before the sale of a business opportunity, provide each purchaser or consumers with a written contract and give consumers a 10-day cooling-off period after the signing of the contract.