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Billionaire Mark Cuban has warned against rampant fraud.
These scams capitalize on the success of the reality show “Shark Tank,” which features him and other high-profile investors.
The entrepreneur has just accused the Federal Trade Commission, which is responsible for protecting American consumers. Cuban told regulators about a phenomenon that risks misleading many consumers and individual investors.
Many companies lie that they are connected to “Shark Tank” in order to sell their products to consumers. For example, some companies say they are on the show and get support for their products from one of his sharks.
Some companies even claim that their products have a shark’s bounty.
Other companies have masqueraded as companies backed by “Shark Tank” investors in order to dupe potential investors and consumers.
This phenomenon is like every shark in a famous show had to record a warning message for the public. First, let’s review how Shark Tank works.
‘Beware of Fake Ads!’ – Show Investor Warns
Concept: On one side, there is an entrepreneur with a creative project or an existing business that wants to take it to a new level.
On the other side are investors, entrepreneurs looking for innovative concepts that have the power to make tens or hundreds of millions of dollars in business and change the game.
An entrepreneur presents a project and attempts to persuade at least one shark to invest in the business in exchange for a stake in the company. Entrepreneurs often seek to profit as much from shark skills and relationship networks as they do from money.
The result is a program full of brilliant and silly ideas. A pitch from a successfully persuaded entrepreneur…or a miserable failure. Tough negotiations, touching moments, screams, laughter and tears.
Most of all, it presents many lessons for entrepreneurs and investors alike to learn about negotiating, selling, and influencing.
This is where the crooks come into play. They want to capitalize on the notoriety of their investors and the success of their show, and they commit fraud.
Meanwhile, “Shark Tank” investors want to keep the general public out of these traps. They wrote about it titled “BEWARE OF FAKE ADVERTISING! Check out the website below to see if a product is legally associated with ‘Shark Tanks’ or sharks.” We prepared a 40 second ad.
Site addresses of five historic investors are available for public reference, along with an ABC site dedicated to this issue.
Investor Lorie Greiner, one of the sharks, said at the beginning of the commercial:
“There are companies advertising online and on social media claiming to be ‘shark tank’ companies, but they have never appeared on the show,” Cuban adds.
“Many of these companies use shark names and images in an attempt to market their products,” continues investor Daymond John.
‘Are you awake?’ Cuba asks FTC chairman
“They might show us a photoshopped picture of the product in the tank,” jokes Shark’s Barbara Corcoran.
Investor Robert Herjavec advises, “Before you buy, visit ABC’s official Shark Tank website for a full list of all companies that have participated in the show.”
“Be careful. Thank you for watching Shark Tank,” concludes the final shark, Kevin O’Leary.
In a tweet posted on December 28th, Greiner claimed:
The tweet was quickly commented on by the owner of the Dallas Mavericks who attacked the FTC. Mark Cuban has already warned regulators about these scams, but regulators have yet to take action.
“Hey @ftc we’ve been begging for years to stop this. Are you up @linakhanFTC?” the billionaire tweeted to FTC Chairman Rina Khan.
The FTC did not immediately respond to a request for comment.
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