Due Diligence

“Due Diligence” is a process that raises and seeks to answer the question, “Are the parties to a proposed course of action agreeing to what they think they are agreeing to?”

Question: What three pieces of key information can help you determine if specific fraudulent circumstances are present at a martial arts school?

Answer: The martial art school name, the martial art system name and the martial art school/system logo can help you quickly identify and verify fradulent circumstances at a martial arts school.

It May Be A Life Changing Decision

Considering the profound influence a martial arts instructor can have on a student's life it is especially unfortunate that consumers are subject to being deceived when first searching for and selecting a martial art school.

When making a potentially life changing decision for yourself or your child, wouldn't you rather base your selection of a martial art instructor or martial art school on fact rather than naivety, misplaced trust, uncertainty or fraud?

A trademark infringer's use of registered trademarks without a license from the trademark owner in their ads, signage, web pages, etc. are some of the means used to attract unsuspecting new students.

Martial Art Fraud shows you how to identify use of registered trademarks and then verify whether or not a registered trademark is licensed to a martial art school or instructor.

The opportunity for consumers to be defrauded when seeking martial arts training for the first time is exacerbated by the fact that martial art school names often include foreign language words as do the martial art system names and prospects justifiably rely on the martial art instructor as the expert in the transaction and trust their representations of material fact to be truthful.

When a consumer's lack of familiarity with martial art related terms and martial art system names converge with willful deception by trademark infringers, then very favorable circumstances exist for c0nsumers to be deceived without even knowing they have been.

Be Diligent

Smart consumers typically perform some kind of due diligence before making a purchase decision and it may include researching other sources for a similar service or product and comparing each supplier's prices, warranties, etc. and/or searching online for customer reviews about each supplier of the product or service that is of interest.

However, conducting due diligence about a martial art school, its programs and its instructors, etc. can be a bit more challenging and confusing for those with no martial art experience and who are seeking out a martial art school for the first time.

The Martial Art Fraud website provides information to help you make an more informed decision and to help make your due diligence process before enrollment less confusing.

Your “Due Diligence” process may not uncover all pertinent facts, but it should be conducted in a manner reasonably calculated to do so.

With this important concept in mind, we offer are some key questions that you might seek to answer when considering a martial art school for yourself or your child.

Each person's goals for seeking martial art training may be different and thus the questions that need to be asked may also be very different, but there are some prudent key questions that are reasonable in all cases.

While you may not ask all the questions shown below, the questions about registered trademarks are especially valuable to ask because you can gain factual insight from the answers.

Answers to those questions can reveal facts that you can verify with independent third parties and which may alert you that a trademark infringer or trademark counterfeiter has the intent to defraud you.

Be Inquisitive

What is your martial art school's legal business name?
- you may discover they are not even a legitimate business
Is your martial art school's namea registered trademark?
- a registered trademark is different than an unregistered trademark
Is this your martial art school a sole proprietorship, a DBA, a for-profit corporation, a non-profit corporation, etc.?
- many small or informal martial art programs or schools may operate as hobbies of the owner or as sole proprietorships and there is nothing necessarily wrong with these business models; however, if the instructor is using registered trademarks without a license from the trademark owner, then fraudulent circumstances are present.
- the type of business is also important to know in the event a dispute occurs that requires legal action to resolve, such as fraud
What is your martial art school's business's logo?
- without a license from the trademark owner, trademark infringers may display the registered trademark logos of others thus misrepresenting material fact to consumers which is the 1st element of legally proving fraud.
Is your martial art logo a registered trademark?
- a registered trademark is different than an unregistered trademark.
How long have you been in business as a martial art school?
- the time a martial art school or program has been in business is a very different matter than how long an instructor has been training in martial arts
- the length of time indicated for one does not necessarily suggest competency for the other because operating a business requires a different skill set than being a good martial artist.
How long have you been teaching martial arts at this l0cation?
- the stated period of time may be indicative of the martial art instructor's stability in the community, the martial arts program stability or the martial arts school stability, but is not necessarily indicative that fraudulent circumstances are absent. Think Bernie Madoff.
- Identify and verify the martial art school name,the martial art system name and the martial art school/system logo and for increased awareness of the circumstances that are present.
Is your martial arts school a member of the Better Business Bureau or are you listed with the Better Business Bureau?
Is your martial arts school a member of the local Chamber of Commerce or are you listed with the local Chamber of Commerce?
Is your martial art school licensed, accredited, credentialed or certified by any national or international martial arts organization(s) or other agencies?
What is the name of the martial art system that you teach?
Is your martial art system name trademarked?
Do you publish or provide books or videos that document the martial art system that you teach?
Is the content of your martial art system copyrighted or can other martial art schools and instructors also else teach it? (i.e., can other martial art schools teach your martial art system the same as you do?)
Will the martial art rank certificates and credentials that I earn at your martial art school be certified and transferable to other martial art schools?
Can you provide me with a list of martial art schools my ranks will transfer to?
What is the name of the martial art school or organization that will issue and certify my martial art rank credentials?
Can you provide me with the contact information or website of that martial art school or organization?
Are your martial art instructors licensed, accredited, credentialed or certified by any national or international martial arts organization(s) or other agencies?
What is the name of the martial art organization(s) or other organization(s) that certify your instructors?
Can you provide me with the contact information or website of those organizations?
How long have your instructors been training in the martial arts?
How long have you been training in the martial arts?
Do you offer free or reduced price membership, tuition or training for military personnel?
Do you offer scholarships or financial hardship waivers?
Do you use tuition enrollment contracts?
What are your tuition deferment or cancellation terms?
Do you use a tuition billing service or do I pay you directly for my martial art lessons?
Is your martial art school insured?
Can you provide me with three referrals from current or former martial art students?

Some savy consumers report preparing their questions in writing and then asking them one by one during the phone call. Some even report preparing their questions on a form that they ask the martial art school owner to fill out for them. They reason that since the martial art school owner will ask them to fill out application forms, etc. that it is reasonable for them to ask the school owner to do likewise.

Be In Control

The staff answering the phone at professional martial art schools may be evasive about discussing things on the phone because they have been trained to do everything possible to get a caller to commit to making an appointment to come in to the school.

A typical phone conversation with a martial art school may be designed to:

postpone answering your questions until you arrive at the martial art school because on their home ground their chances of convincing you to enroll during their presentation increase significantly.
persuade you to make a small commitment to them on the phone (agree to an appointment) which psychologically prepares you to make a bigger one when you keep the appointment;
persuade you to agree to an appointment because once you do agree to an appointment, you are very unlikely to make any more phone calls to other studios comparing prices, programs, etc.;

Once you have actually visit a martial art school, the likelihood that you will verify their statements or contact other martial art schools before enrolling decreases significantly.

This is a proven and effective sales technique that is only one part of a powerful sales strategy employed by many legitimate businesses.

The Psychology of Persuasion by Robert Cialdini

However, you can also choose NOT to succumb to this proven sales process at this point in time. Simply end the call and continue researching other martial art schools and researching the facts about this particular martial art school name and martial art system name. (peruse online reviews, check trademark records, etc.) You can always call them back later and agree to an appointment after you are armed with more information.

If you are unable to get the answers you seek over the phone, then KNOW that you will encounter an experienced sales person when you visit the school and whichever martial art school you visit first is the one that you are most likely to enroll at provided the staff or instructor is doing a good job at recruiting new students.

When you visit martial art schools you may even be presented with an extremely compelling, limited time enrollment offer that is only good the day you are there in order to encourage you to sign up. While there is nothing wrong with a martial art school offering an incentive to a new prospect and many reputable martial schools extend such valuable offers to new students, if you have observed any indications of trademark infringement or trademark counterfeiting, be willing to walk away no matter how good the offer sounds or you will likely become a victim of fraud.

If you do choose to visit a martial art school before you have conducted your due diligence, be alert to recognizing the signs of potential fraud as discussed on the Martial Art Fraud website.

Be Informed

Be prepared to look up the following information on their website and expect you may encounter some very long and/or strange sounding foreign words, but you need to know three important things in order to make a more informed decision.

If you contact a martial art school or instructor on the phone, take time to have them spell the name of their martial art school name and martial art system name for you and identify the martial art school/system logo being displayed. These pieces of information are needed to help you perform additional research when you get off the phone.

These key pieces of information can help you quickly spot fraud.

With a minimum amount of due diligence you can easily determine if material fact is being misrepresented and if these particular types of fraud are being perpetrated by verifying the name of the owner of the:

martial art school name
martial art system name
martial art system logo

You can then use the links below and search through 3rd party references and/or government references to discover if any of these, or some portion of them, are registered trademarks and if the martial art school is licensed by the trademark owner.

If any of these appear in your search results, or some portion of them, then you can verify the trademark owner's name and compare it to the martial art school name and/or consult the registered trademark owner's licensee list to learn if the martial art school or instructor is an active licensee.

Search: U.S. Patent And Trademark Office (USPTO) (results depend on correct use of the feature)
Search: Trademarkia (provides a simple search feature and accesses most records of the U.S.P.T.O.)
others

The Martial Art Fraud website provides information to help consumers identify and verify if the following types of activity are present:

trademark infringement fraud
trademark counterfeiting fraud which can be a felony criminal offense.
trademark counterfeiting conspiracy fraud which is a felony criminal offense.

Federally registered trademark owners are the exclusive source for their particular products and/or services and only the trademark owner regulates and controls them to their standards.

Suggestions for protecting yourself from trademark related fraud include, but are not limited to the following:

Identify – (Recognize fraudulent circumstances)
Verify – (Perform a bit of due diligence to confirm if fraud is present)
Testify – (Report fraudulent circumstances to authorities)

The Martial Art Fraud website provides direct links to a number of different reporting agencies dedicated to protecting consumers from fraud and criminal activity. If you discover these illegal activities taking place in your community we encourage you to report them.

Be Willing To Walk Away

Should you discover any evidence of deception involving a martial art school's use of registered trademarks without a license from the trademark owner, contact another school and report what you discovered.