Book of Wise Investors

The current financial crisis has caused fellow humans to scam fellow humans, though the causation of current financial crisis is due to fellow humans scamming fellow humans in the first place. Let us look at what are the types of scams that is being invented, some of them has already existed before subprime mortgages are being invented.

There is no doubt that every single one of them listed here still works by virtue of human greed. You may be surprised by the amount being scammed already.

1. Lottery scams

This is very common; I always receive it in my email account. I wondered how come I always win more than US$1 million lottery. There is always a catch in this type of scam, which is needed to pay an administrative fee to collect the winnings. For some reasons, the administrative fee can never be deducted from the lottery winnings.

Red flag need to be raised when the request is to send the administrative fee out of the country, usually to Nigeria.

2. Pump and dump penny stocks scams

According to Wikipedia, they account for 15% of spam e-mail messages. The spammers already hold the penny stocks (“pump” the stocks), then they mass spam through email to falsely recommend the relatively unknown penny stocks. You will always see the words “hot tips”, after there is a temporally increased demand from some suckers, the spammers then “dump” the stock.

The stocks will always be small cap and not blue chips, as so no need many buyers to increase their prices.

3. Work at home scams

There are many websites around advertising about make money at home by filling out surveys and get to try some products and services for free. But after paying for a not so small fee, you discover that what you get is around 200 hyperlinks to so called paid surveys websites that you need to sign up individually.

Always Google the website name with the word scam to see what other people that have already fall tricks to them say about them. In other words, see what other participants of the scheme have to say about it.

4. Investment scams

This is more subtle than the rest above. It comes from unsolicited phone call from a person, usually a female according to what my experiences. They usually claim to sell all sorts of investment products like stocks and insurance.

The problem with buying insurance over the phone no matter how good it sounds is – how to you claim the insurance policies when there is a need?

You will usually receive instructions on how to transfer the required payments to overseas banks and this is definitely a red flag.

5. Advance fees scam

This is similar to lottery scams, the difference being that the reason why there is a larger sum of money for you is due to a rich but dead person who has nobody to give his money to. In other words, by paying an “advance fee”, you become the beneficiary of the huge inheritance. The “advance fee” is used to speed up the transaction.

But I wonder if I did not pay the “advance fee”, how slow the transaction will be.

Moral of the story . . .

My advice is do not give your personal email address to any relatively unknown websites. If you want that free eBook about make money online, just remember to set aside a specially created “spam” email account for that.

In addition, there is no need for for you to surrender your real name unless you are applying for Google Adwords and Adsense. Apply common sense judgment on which websites is safe, and also for the offline correspondence case, whatever make money online seminars or invest in UK land seminars; surrender a “spam” email account with a fake name.

Image Credits: d70focus

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