Every time I read about one of these scams I wonder, Why don't you be your own promoter? You can do exactly what these folks are doing and pocket the money. Choose the venue and find out what they will charge, or how they will rent to you. You may find that local bars will allow you to use their place for nothing if you don't get a cut of the bar. If you like the silly "battle of the bands" format, network with a few other local bands and you can all split the take. Remember, you get it ALL this way. And you control the publicity. This is a better thing for your band in every way including more exposure. Along that note, a girl performer I know in South Africa once made the statement "If I wanted exposure I'd stand on a street corner naked!" I think she has a handle on the situation.