Con Schemes Abound
By Brett Newberry
Each year millions of individuals are victims of con schemes, and the losses are staggering – in the hundreds of millions of dollars. Both individuals and businesses are potential targets for these schemes. Con schemes affect people of every age, gender, religious belief, educational level, society status, and geographic location. Virtually no one is immune from the exposure to these frauds.
In the 21st century, scam artists use the Internet, computers, telephones, printers, and scanners as their weapons, and they do not even have to leave their homes to capture their victims. To further exacerbate the problem, people can be victimized in their own homes without being aware of it.
With the growth and expansion of the telecommunication industry, fraudsters have more available opportunities and media to reach their potential victims. The Internet has expanded communication globally as well as exposure to con schemes. The Internet is an avenue for the fraudster, and individuals should be aware of the various con schemes and the red flags associated with them in order to avoid becoming the next victims.
Staying one step ahead of the scam artists today is a challenge, not only for consumers, but also for authorities in the detection process. As technology grows at a faster pace, authorities must have the resources available to keep on the cutting edge of technology in order to detect fraud schemes.
Investment swindles and con schemes have been around for centuries and are not disappearing but only growing in magnitude. With advances in technology today, the Internet has amplified the occurrences of these schemes, allowing perpetrators to reach a wide audience at little cost. One common theme for perpetrators and victims is the “get-rich-quick” theme – obtain something of value, fast and easy.
Investment swindles and con schemes can be extremely diversified, ranging from the very simple to the very complex.
There is no clear perpetrator profile. He may appear in any form. The perpetrator could be someone who has poor morals or conscience, an absconder who takes money and runs, or has a “wheeler-dealer” attitude. Nor is there an accurate victim profile. All consumers are victims either directly or indirectly. Everyone is vulnerable to the right pitch, and we are all potential victims.
Society promotes admiration for people who possess an abundance of wealth. This admiration promotes pride, which cultivates greed. Perpetrators usually commit these schemes because they are looking for a way to make easy money with minimal effort. However, there may be other factors that drive or motivate the perpetrators to commit con schemes, which may include the three basic elements for fraud to occur: situational pressure, perceived opportunity, and rationalization of the act.
Consumers generally have a trusting nature. They want to believe and trust people, which leaves them vulnerable to fraudsters. They may be looking for easy solutions to problems. They may be risk takers who lack the awareness to recognize a potential con scheme. They knowingly provide information to be helpful and informative but are unaware of its end use.
Potential victims may have or are believed to have situational pressures such as a lack of money, low income, or high personal debt. They may have a need to conserve money, or they may have a problem that requires a solution, for example, home repair.
Potential victims may perceive an offer or con scheme as an opportunity to receive something of value or a solution to a problem. Consequently, they may perceive a particular investment as an offer to increase their wealth, or the home repair appears to be a bargain, which saves money.
Potential victims will rationalize their actions, that is to make money, save money, solve a problem, receive something of value, provide help or a service, or to obtain or retain credibility.
The red flags that generally characterize these con schemes include the following:
- Advance fees required with cash, credit card, or checking account number;
- Promises of substantial profits or returns on investment;
- Promises of little or no risk guaranteed;
- Sense of urgency in response/must act immediately;
- Little or no effort and/or experience required; and
- Refunds not available or difficult to obtain.
Generally, as the old saying goes, if it sounds too good to be true, it probably is.
Until next time,
The Business Doctor
