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Hiring Someone to Set up an Amazon Business Front? Beware of this Scam

Hiring Someone to Set up an Amazon Business Front? Beware of this Scam

Article Summary


Business owners can fall victim to scams from service providers who promise to set up Amazon Storefronts or other online sales channels but take upfront payments without delivering results. These scams often include hidden contract clauses that prevent refunds or make it impossible to terminate the agreement. Warning signs include requests for full payment upfront, restrictive or confusing contracts, unverifiable providers, and high-pressure tactics. To protect your business, vet providers carefully, have a lawyer review contracts, confirm deliverables, and tie payments to milestones. If you are scammed, document all communications, notify the provider, consult an attorney, and report the scam to authorities such as the FTC, the Pennsylvania Attorney General’s Office, your local police, or relevant regulatory bodies.


Scammers are increasingly targeting business owners with services that promise results but are designed to take their money without delivering. This type of scam is becoming more common, and our client’s recent experience illustrates exactly how these schemes can unfold.


Our client thought he had found a trustworthy partner to launch his Amazon Storefront. The company offered to build and run the store in exchange for an upfront payment and a split of the net sales once the store was up and running. He signed the contract and felt comfortable with the arrangement because it included a clear refund clause: if the store wasn’t live within 120 days, he could terminate the agreement and get his money back.


But there was a catch. The contract also said that if Amazon flagged or removed the store for any reason, the 120-day period would never begin — which meant he’d never reach the point where a refund was possible. The scammer knew exactly how to use that clause, likely triggering some kind of poison pill that would cause Amazon to flag the store early. As a result, the 120 days never started, and our client’s upfront payment was gone.


Our client isn’t alone, and his experience highlights the risks business owners face when engaging with service providers. Understanding the warning signs, how to vet companies, and your legal options is essential to protecting your business and your investment.


Warning Signs of a Scam


Understanding the key warning signs before you commit money or sign a contract can help you avoid losing time and funds:


Upfront payment demands

If a provider requests full payment before delivering any work, it can indicate a scam. Legitimate businesses usually offer phased payments or tie compensation to milestones so you can verify work before paying.


Complex or restrictive contract clauses

Watch for hidden language that limits your right to a refund, sets unrealistic obligations, or gives the provider ways to avoid accountability. These clauses can be deliberately confusing, making it nearly impossible to recover money if the service is not delivered.


High-pressure tactics

Scammers often create a false sense of urgency to push you into making a quick decision. Phrases like “limited time offer” or “sign today or lose this deal” are common tactics to prevent careful review.


Unverifiable credentials or claims

Be skeptical if a provider’s past work, references, or licenses cannot be independently confirmed. Scammers often fabricate experience or client lists to appear credible.


Avoidance of transparency

Legitimate providers willingly share details about their process, deliverables, and timelines. If a company is evasive, refuses to provide documentation, or gives vague answers, that’s a major red flag.


Best Practices for Working With an Unknown Service Provider


Before engaging a service provider, careful vetting protects your business and investment. Taking the right steps up front ensures you can make informed decisions and reduce risk:


Have a lawyer review the contract

A lawyer can identify clauses that could prevent refunds, limit your rights, or impose hidden obligations. They can also explain your legal options if the provider fails to deliver.


Confirm company legitimacy

Check the business’s registration, licenses, and history through official records. Ask for and verify references, and search for any complaints or negative reviews online to spot potential red flags.


Verify deliverables and milestones

Structure payments around clearly defined milestones or completed work rather than paying in full upfront. This ensures you are only paying for what is actually delivered and reduces financial risk.


Ask specific questions

Request detailed explanations of their process, expected outcomes, and timelines. A credible provider will provide evidence of past results and explain how they handle potential issues.


Steps to Take if You Believe You’re Being Scammed


Even with precautions, some business owners may still encounter a scam. Acting quickly and methodically can improve your chances of recovering funds or holding the provider accountable. Follow these steps:


1. Document everything

Keep copies of contracts, emails, receipts, and any other communication with the company you are working with. Detailed records are essential for proving your case and for any potential legal action.


2. Notify the provider in writing

Send an email explaining your concerns, referencing the contract terms, and requesting a resolution or refund. Keep a copy of all written correspondence for your records.


3. Consult an attorney experienced in business and contract law

If you suspect the provider is attempting to scam you, speak with a lawyer. They can review your contract, evaluate potential claims for breach of contract or fraud, and guide you on the safest and most effective next steps.


4. Report the scam to the proper authorities.

Your attorney can guide you in filing complaints with the appropriate agencies. Depending on the situation, this may include:


Having professional guidance ensures the complaint is complete, accurate, and properly documented.


5. Take preventive steps for the future.

Even after resolving the issue, review your procedures for vetting new service providers and structuring agreements to minimize risk moving forward.

 

Scams targeting business owners can take many forms, but careful preparation and swift action make a significant difference. By recognizing warning signs, following best practices when engaging new providers, and knowing the legal steps to take if a scam occurs, business owners can protect their investments and reduce the risk of financial loss. If you believe you have been scammed or need help reviewing a service agreement, contact the experienced business attorneys at Fiffik Law Group to discuss your options and protect your business.

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