Why a Cheap Website Design Could End Up Costing Thousands

So Simmons took a deep breath and bought the “gold” plan for $7,500. Over the next month, he heard nothing. Finally, he checked in to see what was up. The next day, he was told it was finished. He was underwhelmed. “It looked like something I could have done myself, not the type of thing you would expect for $7,500,” Simmons says. Plus the site didn’t show up when he Googled its name. The company offered to fix that by adding more — for a $1,000 fee. He reluctantly agreed.

In the end, Simmons invested over $11,000 in the website. The only thing he ever sold was a $15 baseball cap to one of his friends.

For more on how to protect yourself, visit AARP's Fraud Watch Network. 

A growing problem

Is Simmons’ experience typical? Absolutely, based on the roughly three dozen complaints to law enforcement agencies about web developers that AARP reviewed. Each closely mirrored Simmons’ experience: the low-cost starter pitch, the telemarketing calls, the promises of big incomes and the bitter outcome. The average complainant’s age was 68, and the average dollar loss was close to $17,000. One woman, ironically a 72-year-old former Medicaid fraud investigator, spent $35,000 on various web design services, yet got nothing for them. The largest dollar loss was $67,000, sent by a 75-year-old disabled veteran from Plymouth, Mich. 

While business opportunity scams usually don’t involve outright theft, they are illegal because of their marketing techniques. “If you promise somebody that they will make $10,000 in 90 days, you have to have a basis in reality for that claim,” says Greisman at the FTC. Otherwise, you are in violation of statutes involving unfair and deceptive acts and practices (UDAP). At the federal level, these are policed by the FTC;  state attorney general offices also pursue these cases. However, most UDAP cases are tried in civil courts, so defendants rarely go to jail. That’s why consumer protection lawyers say they play a constant game of whack-a-mole: Shut down one outfit, and another pops up.

Still, Greisman says, the FTC has stepped up prosecution of web-kit scammers as part of a larger effort to crack down on fraudulent work-at-home schemes. For example, in 2017, the FTC sued Bobby J. Robinson, who advertised online as workathome.edu. The complaint alleged that Robinson used misleading advertising in selling web business opportunities, including an online ad that read, “A Texas Mom Makes Extra $8,000/Month in Her Spare Time on the Computer Without Selling Anything.” The FTC complaint alleges that this and other earnings claims were misleading and not based in reality.

Make no mistake, work-at-home schemes have been around forever. But the sheer scale and reach of the internet as a platform has reinvigorated interest, as has the growth in independent contractors working in the new “gig economy.” U.S. e-commerce sales hit $360 billion in 2016 and are expected to nearly double — to $638 billion — by 2021. “A lot of money is being spent online, so people think a lot of money is being made online,” Greisman says. “It's hard to appreciate how incredibly difficult it is. You don’t just snap your fingers and become an online seller.” 

What does Simmons think of the firm he worked with? “I think they are a scam. I received virtually nothing from them that I couldn’t have done myself, and I was never able to make a single dime from my investment,” he says. State and federal agencies continue to investigate firms like these.

“I’m sure there are legitimate companies out there, but just know that if you sign up for an inexpensive web design package, you will start getting a lot of calls from people wanting to help you fix it,” Simmons says. “My advice is, don’t do it.”