'Homework' can save you from business scams, expert says


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SALT LAKE CITY — How do you know if a business is trustworthy or not? All it takes is a few minutes of your time, a little research and knowing where to look.

Justin Watson learned that lesson a little too late. He works as a contractor by day and a pizza delivery man by night.

"All I need to do is put food on the table for my family," Watson said.

Watson works hard to support his wife and new baby and pay off $10,000 in student loans. When he saw a TV commercial for First American Tax Defense promising to lower his payments in half, he didn't hesitate to call.

"I figured if they're on a TV channel, maybe I can trust them," Watson said.

Jane Driggs is the president of the Better Business Bureau in Utah. She said that was Watson's first mistake.

"We always want to trust the person who is talking to us because otherwise, the whole society breaks down," Driggs said. "You've got to have trust and unfortunately not everyone is trustworthy."

Driggs stresses the importance of researching a company before you sign up.

"The reality is, in 10 minutes you should be able to find what you need to make a decision," Driggs said.

A quick google search of First American Tax Defense immediately brought up reviews with comments like "rip-off," "dishonest," "criminal" and "complete fraud." The Better Business Bureau gives the company a D- rating.

Driggs suggests while doing your research, you should also comparison shop, find out if the business is licensed and check out the company's physical address.

"We've had businesses, especially loan companies, that say they'll loan you money and they say we're on the fifth floor of this building," Driggs said. "We've gone to the building and there is no fifth floor."

These are all things Watson, unfortunately, did not do. By the time he started doing his homework, it was too late. First American Tax Defense took about $200 out of his bank account and never made a single payment towards his student loans. Watson reported the company to his bank and was able to get his money back.

"It's definitely taught me: Do your research," Watson said.

KSL investigators tried to contact First American Tax Defense several times but received no response.

Contributing: Tania Mashburn

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