Anatomy of a Scam

ANATOMY OF A SCAM


Ever been snookered?  Read this.

1.   Most scams fall into one of three broad categories of intent:  (a)  Attempt to sell you something worthless or have you invest in something worthless  (b) Attempt to steal money or valuable information (such as personal information)  from you  (c) Attempt to influence you to make particular political, cultural, medical/health or financial choices that are ultimately beneficial to their interests but not your own.


2.  Scammers use one or more of these 9 techniques:
   a)  misrepresent who they are
   b) "earn" your trust during an initial period
   c) create illusion of credibility by association with "experts", famous people, government agencies, or offer a web link to the patent office or some other site to prove their legitimacy
   d) testimonials, testimonials, testimonials -- gullible people are attracted to them like moths to a flame
   e) appeal to one's worst instincts--pride, vanity, greed, fears, prejudices, or prurient curiosity
   f) appeal to your kindness, generosity or sense of responsibility
   g) take advantage of your desperation; hold out hope when no one else can offer it to you
   h) create alarm, and tell you what you need to do "before it's too late"
   i) Offer a 100% iron-clad, no-questions-asked money back guarantee (that's not)


3.  Examples of such scams:  
   (a) Pay a small advance fee that is inconsequential compared to the money you will receive later
   (b) The classic "bait and switch"
   (c) The Perpetual motion/energy machine (often a "hot" startup company)
   (d) Fountain of youth found
   (e) Something for nothing (i.e., lose weight without dieting, build muscle without working out)
   (f) Make or save gobs of money
   (g) Save your life or improve your health when the doctors can't
   (h) Claim your prize or accept your award (that's the bait; the hook comes later)
   (i) "We want your valued opinion on this topic" (along with your valuable personal information)
   (j) "We want YOU to profit from this fantastic investment" (really?)
   (k) "There may be a problem with your account, can we verify some information?"
   (l) "A virus has been detected in your computer..."
   (m) "We can fix your credit no matter how bad it is."
   (n) "You're getting screwed by ______ !  We can help you fight back!"
   (o) "...this shocking video clip demonstrate why you need our product.  Not appropriate for all viewers"
   (p) Use adjectives rather than stating actual quantities or levels;
          Example:  "Eliminate the shockingly high cancer risk from your cell phone by using..."
  (q)  Avoid technical explanations by using the word "proprietary", "top secret", "patented", etc.
         Example:  "... our proprietary, patented product..."
   (r) Give the vague (and false) impression that the product's efficacy has been proven
         Example:  "...proven to be the best in the industry in test after test!"
   (s) Use weasel words like 'and/or', 'up to', 'as little as', 'as much as', 'similar to', etc.
         Example:  "Tests show that harmful EMI/RFI is reduced by as much as 87%."
   (t) Claim that someone else (the government, the oil companies) wants to suppress this information
         Example:  "Cell phone companies want to keep this harmful radiation a secret."
   (u) Use patriotism, religion, or ideology to mask an appeal to the victim's darkest fears and prejudices
         Example:  "When terrorists infiltrate the U.S. and wreak havoc, will you be prepared?"


As an example here's a link to a particularly egregious scam (it might be down by the time you click on it.  Also, be careful not to click on any of it's links):   http://www.hojomotor.com/vid
  
4.  Investment scams are only a small subset, but they deserve some additional characterizations:
   a)  "This is a golden nugget that most people have not yet discovered.  A rare opportunity."
   b)  You're a senior citizen in the Midwest and they got your name from another scammer--paydirt!!
   c)  "This is ready to take off.  Production will start next month.  Better act fast or you'll miss out!"
   d)  "The concept was developed last month, production ready next month."  (Not multiple years?)
   e)  Didn't already spend $80 million in R&D.  (Why not? What is this, a hot dog stand?)
   f)  "Approved" by prominent individuals, experts, or government agencies
   g)  Conspiracy theory to explain why G.E. or Chevron hasn't already bought up the company.
   h)  Fake Pollyanna "press releases" masquerading as news articles (No development challenges?)
   i)  No clear technical explanation.  Made up technical terms and jargon.
   j)  Words like "proprietary", "patent pending", "new technology", "quantum leap", "breakthrough"
   k)  Obscure discussion boards of people interested in technology but who don't have technical expertise
   l)  Technical questions brushed off with assertions that the technology will shortly prove itself.
   m) Lack of, or faked credentials of the inventor/developer, or credentials in a different field
   n) Dead ends encountered when one thoroughly checks out and attempts to visit the company.
   o) Company based in Nigeria, Florida, Greece, China, Thailand, Barbados, or some such place.
   p)  Again, testimonials--crazy, but many people will still evaluate a product/company based on this
   q)  You can invest as little as $250.  You can sell and make a big profit whenever you decide to!
   r)  Finally, the most common scam is not a scam at all:  the majority of small start-up companies go belly-up, despite the best intentions of the company, its workers, its stock promoters and its investors.  Small start-up companies are a bad investment choice for the small investor.