It happens way too often. Someone needs money and needs it fast. Along comes an offer or an ad or a scheme — and with its promises of easy money it sweeps away the usual caution ultimately fleecing innocent investors of all their savings.
But according to Meir Shterenberg of JOIN Israel’s Pitronot Advocacy program to rescue Israelis from financial and legal quagmires forewarned is forearmed.

In this new monthly column he’ll help you distinguish the scam from the real deal and keep your money safe.

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The Players:

Name: Yisrael and Esti Efrati

Age: Early 30s

No. of Children: 2

Residence: Near Yerushalayim

The Bait:

EARN $2 000 to $5 000 PER MONTH!

Work Just 4 Hours Per Week

Minimum Investment: $18 000

Call for Interview

The Background:

You might have seen an ad similar to the one above. A Hebrew version appeared in many Israeli chareidi newspapers. The ad was placed by a company that distributed supposedly high-end Italian coffee machines. They were looking for people including avreichim to distribute the machines throughout Israel. For a minimum investment of $18 000 the avreich received eleven coffee machines and a list of “customers” who were waiting to receive the machine. While the customer received the machine for free he had to order the coffee capsules from the avreich — which is how the avreich would make his money.

As the company explained: Let’s say you get one of the Rami Levy supermarkets to take a coffee machine. If each capsule costs you a quarter you sell it to Rami Levy for 50 cents. You can earn $25 from Rami Levy employees every day — and that’s just one coffee machine. A person can earn at least $3 500 a month if he is a hard worker. Even if he doesn’t work so hard he can easily earn $2 000 a month.

Sound good? Meir Shterenberg of JOIN Israel’s Pitronot Advocacy program to rescue Israelis from financial and legal quagmires estimates that about 500 people thought it sounded great including the 90 avreichim who later called him to complain they had been scammed.

Here’s how the story played out for the Efratis.

Yisrael’s Story

After our first child was born I knew I had to start thinking about the future. I left kollel and got a job but it paid only about $240 a month which wasn’t nearly enough.

Then I saw an ad for what sounded like a great business opportunity. I called the number right away and made an appointment. When I got to the company’s office which was in Ramat Gan near the Diamond Exchange I was in awe. It was gorgeous! I remember thinking this had to be a very successful company to afford all this expensive-looking furniture.

I met with two of the upper-level managers of the company who explained about the coffee machines and what was involved. In a nutshell all I had to do was show up with the coffee machine teach the customer how to use it — and then wait for the orders and money to roll in. These guys were very high energy and very enthusiastic about the product. They seemed to like me too. One of them even said he thought I might become one of their top sellers. I felt rich already!

They wanted me to sign a contract right then. They had other people to interview and they didn’t want me to miss out on this amazing opportunity. I was tempted to sign. But I told them that first I had to talk it over with my wife.

Not So Fast

When I got home I told my wife Esti all about the business. I was really surprised by her reaction. She wasn’t at all enthusiastic.

“Something is wrong ” she told me. “Who works just a few hours a week and makes that kind of money?”

“Do people drink coffee every day?”

Reluctantly she agreed that they did.

“That’s your answer ” I said. “A company can easily go through two or three hundred capsules a month — and they have to reorder the capsules from me.”

“There’s no such thing as free money.”

Sometimes my wife can be stubborn.

“Come with me tomorrow ” I told her. “Hear what they have to say and you’ll change your mind.” (excerpted)