A warning for consumers looking to supplement their income in the midst of a trough economy. Experts say vending machines may seem like a good investment, but you can get short changed if you don't do your homework.
”One of our victims was an elderly lady who lost her entire life savings,” explained Don Washington, a U.S. postal inspector.
And she was not alone. Investigators say thousands have been duped by vending machine scams in the United States. In most cases, the con men make big promises.
”Our suspect was very savvy, confident man. When he approached the potential investors (our) victims… he told them they could double their money,“ Washington said.
In this case, the suspect promised he would help investors set up their own vending machine company and would get high returns if they allowed him to teach them the ropes.
”As they gave him their initial investments, he would come back to them he would need more money on top of the start up money to get the business up and running," Washington said.
The truth is, in this case, there was no business. The conman was just stealing money. Postal inspectors started tracking him when they learned he was sending bogus business letters through the mail.
”We basically followed our suspect… and… eventually found him in Las Vegas, he was an avid gambler and that's what he was doing with a lot of the money,” said Washington.
Investigators say vending machine schemes are common and growing in popularity.
Some important things to remember:
- Do your homework.
- Contact the Better Business Bureau to find out if the company is legitimate.
- Consult a financial advisor or lawyer before any money is exchanged or signing any agreement.
- Ask the company to confirm earning claims in writing.
In the meantime, the conman discussed in this case was sentenced in September to 25 months in prison and ordered to pay $500,000 in restitution.