ANATOMY OF A SCAM AND HOW TO SPOT ONE

Manila, Philippines – I have seen it from my past generation, how it ruined lives and hopes of families as it siphoned their lifetime savings. In fact, it actually existed since the concept of money was created. And today they have become more sophisticated, hiding behind legitimate business models – Scams. Yes, from Ponzi to Pyramid schemes, they have duped even the popular political figures and elite personalities in our country. But still some of us never learned from the past so here are some of the characteristics of a scam that might help you spot one early and avoid getting trapped.

OVER HYPED AND PERSISTENT RECRUITMENT – While on its peak, you will see them everywhere especially in social media, you will notice some of your acquaintances with no business background getting involved in such. Once you get in touch with them and attended their seminars they will relentlessly persuade you like there is no tomorrow, they won’t give you a night to sleep over it to make a decision. It’s now or never for you.

THE PROMISE OF NO RISK AND HIGH REWARD IN A SHORT AMOUNT OF TIME – When someone pitched you that it will double your money in no time which makes you ask the question – “if this is really that good, why does he have to recruit me and not invest his own money and reap the reward by himself first?” – then you have to avoid them.

THE PROMISE OF CHANGE – When the salesperson brags that their business is a game changer and a once in a lifetime opportunity like they cracked the code to instant wealth creation as if they found a way to cure cancer, per se is one of a major characteristics that it is a scam.

WHEN PAY OUTS AND NETWORKING GETS INVOLVED – This can be biased since I am not a fan of Network Marketing. It is where they mark up a product with high profit rates and use part of the profit to reward the person to recruit other clients to buy the overpriced products in a packaged set.  It’s like I buy a sack of 25 cent potato and sell it to 2 persons for 2 dollars each, and I’ll ask each of these two persons to find me 2 buyers who will buy the potato also for 2 dollar and I will reward them with one dollar each and so on. It sounds so good that you’ll ignore the fact that you can buy a potato everywhere for 50 cents because I would have told you that my potato will make your skin whiter.

You’ll reach a point that you’ll be forced to buy another package in order to reach a quota or fill up your down lines so you can get back the money invested in your first purchase thru the reward. How stupid can you be? You’ll end up over stacked with these overpriced products that are very difficult to sell with profits and you’ll end up using them yourself. That’s a lot of French fries. You wonder what’s the reason I dislike networking? Try watching the Netflix documentary “Betting on Zero”.

Ponzi and Pyramid schemes usually hide behind this Multi-Level Marketing (MLM) or Networking technique. So for me it’s a sign.

YOU’LL FEEL HYPNOTIZED – You will notice it once you’re in, and it’s a sad part. You will still want to continue even though you noticed something’s fishy, you’ll continue with the recruitment hoping to get back the money you invested. You’ll still try to convince yourself that it’s a great idea even you’ve already seen the signs. You’ll keep dancing along, until the music stops.

Only once the music stops when people will start to cry foul. They’ll seek help when it’s already end of the line. Most of the time people fail to reach out for help or find a solution during the height of the scam. They’ll act only when it’s too late.

People fell on these traps due to many factors, one of them is due to one’s current financial status who wants a quick fix of his distressful situation, others maybe curiosity or boredom, most of the time it is the lack of proper knowledge or information they they become so naïve to believe it even if it’s too good to be true.

So let’s put our guards up, scams do come and go. Major scams come in every generation. Start educating our children and the younger generation on how to spot these scams and the risks of getting involved with these kinds of transactions. They’ll come in a more sophisticated form.

Be vigilant.