Don’t get scammed! Learn how to spot scams in the CBD space and what to do if you’ve become a victim. Check out our list of CBD scam companies below.
One of the biggest problems with new industries like CBD is the influx of scams that come along with it. New industries bring in a lot of customers that don’t yet understand what to watch out for — making them ideal for scammers.
The CBD industry has only really come to life in the last 5 years. Prior to this, there were few CBD-friendly laws, and only a handful of innovative, cutting-edge companies operating in the space.
Since then, the popularity of CBD products has skyrocketed to become one of the most lucrative health supplements the world has ever seen. As a result, dozens of scam artists and entrepreneurs with poor integrity have stepped into the market with trash products and sketchy payment plans.
In this article, we’re going to highlight the top 3 types of scams in the CBD space you’re likely to come across.
We’ll cover how to spot them from a mile away, what to do if you get caught in the cross-fire. We’ll even provide a list of specific companies we’ve found to be partaking in these scam offers.
Let’s dive straight in with the classic “free trial” scam.
Get a free bottle of CBD! All you have to pay is the cost of shipping!
It sounds like a great deal, but don’t fall for this scam!
A lot of people fall for this one because it seems like an honest attempt to gather some brand loyalty. Additionally, CBD is expensive. A bottle can cost anywhere from $30 to $300 depending on the size and potency of the oil. This can make it hard to resist a “free” bottle of oil just for getting started.
Some CBD companies offer samples for its products — however, these samples are never free. They’re essentially just a smaller bottle of the company’s regular CBD oils that you can purchase at a lower price — but you’re still paying for the oils.
There’s a key difference between a “free sample” and paid CBD samples from reputable CBD companies.
Virtually all the companies offering this “free trial for small shipping fee” deal are complete scams and should be avoided at all costs.
When you sign up, you enter your name, shipping address, and everything else as you normally would. The CBD oil is discounted to $0, and a small shipping fee (between $1 and $10) needs to be paid via credit or debit card.
However, in the fine print, the terms and conditions include a section where you agree to pay $70, $80, or $90 per month via credit or debit card if you don’t cancel your subscription within a couple of days (the trial period).
As you may have guessed, canceling your trial is not an easy task — these scams are designed to keep you subscribed (and paying) for as long as possible.
Many users caught in this scam say they couldn’t get through to the company to cancel the subscription. There’s nowhere on the website, or email thread to get out of the contract, and they received no response from the company after multiple attempts. Some of these scams will even give you a 30-day cancellation timeframe — which of course is well past the free trial period. So you still end up having to pay $70 or $90.
None of this is worth it either as the bottles of CBD these companies are selling are usually very poor value. You’ll get 100 mg of CBD in a 30 mL bottle, or something made from hemp seed without any active CBD at all. You can expect these oils to be made from very low-quality hemp, which may be full of chemical additives and contaminants.
These products are definitely not worth the $90+ you end up paying for the subscription.
First of all, relax. People fall for this scam all the time, these companies have gotten very good at building trust. You’re not alone, and there are ways to fix the problem.
If you’ve fallen for a scam like this and had your credit card details are charged from the company a month or two after the “free trial”, you’ll need to first try and get in contact with the company.
Try to call the company a few times, send emails, or whatever other contact information you can find. Be very firm with them, and tell them if you don’t receive a refund immediately to your credit card, you’ll be filing for “fraud chargeback” through your credit card company and contacting your state or country’s attorney general for further action.
If the money isn’t refunded, follow through with the threats above.
You can file for a “fraud chargeback” by calling your credit card provider. It may take some time, but if the company is indeed a scam, you should receive your money back in a few weeks or months.
Additionally, it’s recommended that you cancel your credit card once the dust settles, or as soon as you receive a refund from the scam company. You can then order a new credit card with a new number.
You may also find variations of each of these companies. Sometimes when a company gets caught with a scam like this, they just change the name slightly.
Some CBD companies operate scams using normal business plans — selling oils online using nefarious or false claims for the quality, potency, or benefits of its products.
The most common form of this marketing tactic is to use unrealistic health claims for its products, or claims that the product is organic has 100% availability or uses some special undisclosed process for extraction that’s somehow better than all the others.
Any claims that sound unrealistic, or too good to be true probably are. You should never trust a company that says its product has 100% absorption or has the ability to cure diseases like cancer or diabetes. This simply isn’t true.
In fact, these claims are actually illegal in most countries.
A common trend we’re seeing is that a few scammy CBD companies are using misleading marketing terms to make it seem its products contain more CBD than they actually do. The below example comes from Diamond CBD.
The problem is that the CBD industry is very new, so regulators are struggling to keep up with all the new problems in the industry. By the time the FDA or other regulators catches on, the company has already earned millions and cashed out — never to be seen again.
There are a few terms you should steer far, far away from unless the company has the means to back them up.
Multi-level marketing (MLM) — also known as network marketing — has been around for a long time. No matter what an MLM associate may try to tell you, most of them are total scams.
MLM companies exist in all industries, including CBD.
Brand ambassadors for an MLM company will try to sell oils to their social networks and attempt to get new ambassadors to sell CBD products under them. Although some may be legitimate businesses, most are considered pyramid schemes.
Here’s how it works.
Scam MLM companies grow by acquiring new ambassadors that are forced to buy expensive stock for themselves (with the idea that they will sell it to others in their social network later), or partake inexpensive training and product knowledge. These companies aim to make their money from brand ambassadors signing up and buying stock or starter kits — rather than from real customers.
People sign up to work for these companies because of the many case studies the company provides about people who reached financial freedom by selling oils through their own networks.
However, this is rarely the reality.
Most people who sign up to work for an MLM company end up losing money — sometimes many thousands of dollars, while the people at the very top of the pyramid make a killing.
(Image Credit: mlm-scam.info)
The products these companies are selling usually aren’t very good, and it can be extremely difficult to get customers to buy the products a second time.
These companies rarely do any market research and spend most of their time convincing ambassadors to spend their own money building up a stock of products. They rarely offer any product buyback plans either should you decide to leave the company later on.
These companies are also notorious for their poor internal communication, high-pressure towards new ambassadors to buy product stock and/or pay for training packages.
Learn more about MLM companies via the r/antimlm subreddit.
You can usually spot an MLM when someone from your personal network PMs you to either buy CBD oils directly or offers you a “chance to start selling CBD oils yourself and become rich”. They will often reach out to you via Facebook, Twitter, Instagram.
Classic MLM marketing approaches will begin by asking you for “help starting their business”, or by sending you some ridiculous health claims about how CBD oil can cure anything and everything (it can’t).
They’ll usually try to take you for coffee or a meal so they can sell you on the amazing qualities of CBD oil in person.
Much like the other scams above, the first thing you need to remember is to try not to be too hard on yourself. The vast majority of people who join MLM companies will lose money. This is how the scheme works.
Although you can leave at any time, most MLM victims say leaving was difficult because of the pressure from management layers above. They will try to use the same tactics to keep you with the company that brought you in to begin with — usually promising huge returns if you just keep pushing a little more.
The best way to leave is to do it secretly. Start winding down your business, trying to sell the stock you have, but DON’T buy any more. Avoid emails or contact from the upline of your company until you’re 100% ready to quit.
Expect them to try and keep you around. They may say things like “if you’re dedicated and take this seriously enough you can’t fail” — but don’t fall for this language again.
Most people lose money in MLM schemes — remember this.
Once you’re ready, cut all ties with the company:
Once you’ve left the company, you may want to reach out to old friends that may be avoiding you for having been advertised to so many times in the past by you when you were just getting started as a brand ambassador. You may have cut people off or blocked them for being “unsupportive” of your new business venture.
Whatever the case, it’s often worth reaching out to members in your circle to reconnect.
There are so many scams for CBD products these days, it’s no wonder so many people are skeptical about buying a bottle for themselves. CBD supplements are expensive, so it’s easy for companies to prey on people not well-versed in the CBD industry with unrealistic claims or “free trials”.
Additionally, with so much money involved in the CBD industry, there’s a vibrant MLM community operating in the space as well. As you can see from our list above, there are dozens of known MLM companies operating in the CBD space. And this is just what we’ve found, there are likely hundreds of others around the world ripping their brand ambassadors off to create insane wealth for the members at the very top.
Always remain skeptical about a CBD product or company. Demand to see third-party testing, and certificates for claims of being organic.
We highly recommend you read through our company reviews or reviews on other unbiased websites to get an idea about the credibility of a company before you buy.
If you’ve got a story to share or see any companies or scams not on our list — please contact us so we can keep this page as up to date and inclusive as possible!