With the coronavirus impacting many people’s jobs around the world, the need for additional income — especially while staying at home — is greater than ever. If there were an easy way to make quick money, all the while sitting in front of your computer for only a few short hours a day, who wouldn’t want to know the secret? That’s the tantalizing offer of many get-rich-quick schemes, and they have been proliferating throughout the world.
In Japan, these types of opportunities often take the form of what LegitScript calls "information material." These offers are often marketed as vague “secret recipes” for financial success. In most cases, the “recipe” is a low-value piece of content shared as a PDF file or other form of digital download, available upon payment. Often there are additional incentives such as complimentary stationary, additional DVDs, or even unlimited support via text for the first few months. Sometimes information material merchants offer seminars on a topic, or administer an online group that customers can join for a support system. These additional added-value offerings are often appealing to people who want to make money but have no experience or knowledge of a particular topic.
Information material merchants are masters of marketing. Their material often has a high retail value that is discounted to make consumers feel they are getting a good deal, but is still generally expensive. To convince customers to make an initial investment, merchants often claim that success is virtually guaranteed in a very short period of time. They may even guarantee a refund if the promised results don’t materialize. Furthermore, merchants engaged in marketing information material typically promise that their plan is risk-free and easy enough for even the most inexperienced person to implement.
With flashy marketing and generous promises, what is often overlooked is the actual content being offered. Because the product for sale is information itself, it is difficult for customers to examine its worth until the payment is complete and the file is downloaded. As a result, consumers often find themselves discouraged or disappointed when the “recipe” consists of nothing more than a one-pager describing the basics of how to set up a no-stock resale (drop-shipping) business. This business model, in its simplest form, entails taking someone else’s product listing on a marketplace and listing it as your own on another marketplace — often a third-party platform — with a margin. When the product is sold, the drop-shipper orders it from the original seller and has it shipped directly to the end user. It has been touted as a popular side business, but this practice is not known for immediate or substantial financial gain and, in fact, is prohibited on many third-party platforms.
When customers who purchase information material complain that the program is substandard and has not made them any money, they are sometimes told to keep trying and that a refund is not possible if they are not strictly following what is in the instructions. This often results in card chargebacks, as well as consumer complaints, and the number of such cases has increased recently. In some cases, merchants have been scrutinized by regulatory authorities for their misleading marketing.
LegitScript’s team keeps an eye out for such predatory merchants who target people in desperate need. These deceptive marketers not only exploit vulnerable populations, but also raise the risk of credit card chargebacks for payment service providers providers.
Want to learn about other deceptive practices? Download our Deceptive Marketing Guide.