The lack of regulation in the CBD market has created a space for scam CBD companies. Since the CBD industry is entirely new, many CBD users are still unaware of what they should look for. Consequently, It sets up a favorable environment for scammers to operate smoothly.
In this article, we are going to bring 4 most common CBD scams into the spotlight. We will also cover how you can identify them and measures you should take if you fall victim to scams.
Scam 1. Free Trial For Shipping Fee
Get a free CBD product in return for a small shipping fee! Sounds lucrative, right? Often people mistakenly deem it as an attempt of CBD companies to gather brand loyalty. But such deals are mostly scams. Besides, the high-priced CBD products may also influence people to fall for such scams. Who wouldn’t love to try CBD for free?
On the other hand, some reputable CBD companies offer smaller versions of their regular CBD products. They are also known as samples. These miniature products do not come for free. However, they are cheaper and affordable.
There’s a significant difference between “free samples” and paid samples offered by well-known CBD companies. Almost all the CBD companies that offer a free bottle of CBD oil in return for a small shipping fee are scams. No matter what, such companies should always be avoided.
How Does This Scam work?
When you sign up on a company website, you have to provide information like your name & address. The CBD oil is free, you only have to pay shipping fee via your credit or debit card.
By checking the fine print, you agree to pay a certain amount of money for your subscription unless you cancel it within the trial period. The trouble begins there. Unsubscribing from these scams is not an easy task. They keep people subscribed for as long as possible.
On the other hand, CBD products you will get in the mail for a subscription cost of $80-$90 are quite frustrating. You may get a product that does not contain the stated amount of CBD or a product made from hemp seed oil that contains no CBD at all. Such products may also contain an array of harmful substances and contaminants.
What to Do?
Contact your credit card provider immediately and file for a “fraud chargeback”. It will take some time to process. But if the company is a scam for real, you will get your money back within a few weeks or months.
Scam 2. Fake CBD Companies
Copycat scams use the name and branding of reputable companies and abuse these resources. Such scams aim to confuse people into purchasing from their website. People who accidentally misspell the brand name are the majority of victims of this scam.
Almost all the brands that use this model are fake. They may put you in the trap and charge a great deal of money for the subscription until you cancel it. Even if they ship CBD products as promised, quality remains highly questionable. You may receive poor-quality products containing unwanted substances and no CBD at all.
How Does It Work?
Copycat scams utilize the trust built by a reputable CBD company, let’s call it a “host”. They choose a name that is almost the same as the host brand name. Customers who search for a CBD company may end up on the fake website instead. Many top-notch CBD companies have such copycats operating actively in the market.
How to Identify a Copycat Scam?
It may seem difficult to identify fake CBD companies. The easiest way to spot such a scam is by searching on Google. Simply enter the company name on the Google search and see the top 3 results on the page. If the company you have searched does not appear on the result page can be a scam.
Scam 3. Irrational Claims
Some CBD companies often make irrational claims. They may lie about the quality, potency, and benefits their products offer. Most of those companies operate scams to sell their poor-quality products online. While some may disagree to conclude it as a scam, such practice of selling products is not legit at all.
Such CBD brands may make several unrealistic claims to grab the attention of the consumers. Such claims may include 100% bioavailability of the product, purest CBD oil, the secret extraction process, etc. Even some may claim that their CBD oil can treat cancer, diabetes, and many other chronic diseases.
Never trust a company that makes claims like:
- Our products offer a 100% absorption rate
- 100% natural
- CBD can cure cancer, diabetes, heart disease
- No side effects
Scam 4. MLM or Network Marketing
MLM or Network marketing has been around for quite a long time. Whatever they try to convince you, most of them are nothing but scams. Some MLM companies are also operating in the CBD industry.
In Multi-Level Marketing, brand ambassadors sell their CBD products to their acquaintances. Through this, they make new brand ambassadors who will sell products under them. Although a few of them are legit, most of them are pyramid schemes.
How Does It Work?
Scam MLM companies operate their business by forcing ambassadors to buy expensive stocks. It is thought that ambassadors can sell those stocks to their networks later. Even some MLM companies require costly training programs to obtain eligibility to sell their products. Such companies make money from brand ambassadors rather than making it from customers.
In most cases, people who join MLM companies lose money. Only the people at the very top make lucrative profits. Most MLM companies sell substandard products. Also, it is very difficult for their ambassadors to get retaining customers. Rather than investing resources in market research, they put all their efforts on convincing ambassadors to build up a stock of products spending their own pocket money.
Here are some of the most common traits of an MLM company:
- Their products lack quality
- They offer irrational claims for their products
- They will want you to join their company as a brand ambassador
What if you get caught in an MLM scheme?
Leaving an MLM company is more difficult than it seems. They will try to put pressure on you and repeat the same tactic to keep you in the company. So the best way to do it is by doing it secretly. Once you are ready, isolate yourself from all types of communication with the company.
How to Identify a Company that is Trustworthy?
Whether you are a retail consumer buying CBD products online or bulk customer, you should know the following facts to identify a CBD company as a trustworthy one:
- See if the company makes any claims i.e.: Our CBD will cure such and such. This is the no. 1 red flag and you should avoid them right away.
- See if there are any third party lab test results available for the products a company is offering. A third party lab test shows the amount of THC (if there is any) available in a particular CBD product offered by that company. Also you will know in advance the products you are going to buy have no harsh chemicals and are gluten free from these 3rd party lab test results.
- If you are a wholesale buyer looking forward to purchase in bulk, you must know if the CBD products you are going to buy are manufactured in a GMP certified manufacturing plant and are hemp derived.
CBD Hemp Experts is one of the top notch manufacturers of white label CBD products. All of their CBD products carry 3rd party lab test results. Their CBD products are THC free. They only use USA grown Hemp to derive CBD. They use CO2 extraction process to derive CBD from Hemp. CO2 extraction is expensive, but it ensures maximum bioavailability of the CBD derived from Hemp.
CBD Hemp Expert’s private label CBD program can help you launch your own product line of CBD consumer products. The company offers lowest MOQ (Minimum Order Quantity) for wholesale CBD customers. You can also get nano CBD, water soluble CBD and CBG products from this manufacturer.