Every day, someone is scammed by a con artist. It’s occurring more than ever according to government data. Slick fraudsters, masters of deception and outright crooks are at it every day, all day, trying to get your money.
For example, according to e-mails, you’d think I’m one fortunate fellow. A large inheritance from a distant relative I didn’t even know may be coming my way. My e-mail address won a lottery worth several million (although I’ve not entered any contest). The money will help because a woman wrote about her botched surgery in Peru. She needs cash to get healthy. She will be forever indebted once I help out. Sounds like a good trade. I thought these and other e-mails seemed suspicious, but I’m also a beneficiary of a scam fraud fund for folks who have been robbed by schemers of one sort or another. So, I’ve got that going for me.
None of these ever work out, yet people fall for the cons all the time.
The Bernie Madoff scandal from 2008 — where for years he actually made off with an estimated $50 billion — is the mother of all Ponzi schemes. Even the online gaming website for Full Tilt Poker is allegedly a Ponzi scam, according to the Department of Justice. It appears that $444 million may have been stolen. It’s Ponzimonium out there, and people need to be on extra special alert to avoid swindlers’ webs.
One thing folks can do is get educated. Financial literacy is the key to not becoming a victim. The website is a place to start. Here are some red flags:
1. If it sounds too good to be true, it is.
2. The investment promises little or no risk of loss or promises you won’t lose money.
3. Profits or rates of return on an investment are guaranteed regardless of the direction of markets.
4. The investment is difficult to understand or incomprehensible.
5. There is a need for secrecy. Not being able to get written information about a potential investment should raise suspicions.
Bart Chilton is a commissioner of the U.S. Commodity Futures Trading Commission and author of “Ponzimonium: How Scam Artists Are Ripping Off America.”
