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How do you check the legitimacy of a company?

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Quick Answer

Check a company through the Better Business Bureau, the U.S. Chamber of Commerce, state registries or scam reporting services, which are available through the Federal Trade Commission, the Ripoff Report and the Federal Bureau of Investigation, to determine whether it is a legitimate business. Carefully scan the company's website for plain and accessible contact information, because the lack of an easy method of contact is often a sign of a fraudulent enterprise.

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Full Answer

The Better Business Bureau provides free reports of any fraudulent activities that have been reported against the business as well as any subsequent contact attempts that the reporting agency has made with the business. The agency recommends researching a company before completing any financial transaction and only making purchases with credit cards that are protected under the Fair Credit Reporting Act.

The U.S. Chamber of Commerce and state business registries can help you find out if the company is licensed to do business and determine its status as a company, corporation or limited liability corporation.

Both the FTC and FBI post scam alerts regularly. Always take an appropriate amount of time to research a company's legitimacy. If the business is trying to rush you into making a transaction, this can be a significant sign of a fraudulent operation.

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