Protecting Yourself from Scam Artists

In Part 1, I discussed how to spot the telltale signs that a person may be trying to pull the wool over your eyes and part you from your hard-earned money. This article will focus on how to ferret out out a scam from an honest business proposition and what you can do if you find a fly in the ointment!

Ignore Them

This strategy should be your first choice. It's easy and avoids confrontation. It's especially prudent in the case of email solicitations. Never reply to a spammer from using your main email account as it only confirms that your email is a live one! Upon receiving an unsolicited email, add it to your spam filter and forward it to your email provider. At the very least, delete it immediately and forget about it. Just because something sound like nothing could go wrong, doesn't mean that there is no risk! By the time you realize that you've been had, the thieves are happily spending your money, a half a world away.

Just Say "No"

While Nancy Reagan's "Just say no" campaign was an unmitigated disaster, it would have been a great slogan for losing con men. You see, like most criminals, con men like easy prey. Just as a home alarm system will deter the vast majority of break-in artists, a simple "I'm not interested" will usually be sufficient to tell the scammer that you're no push over.

Take a Time Out

No matter how good something sounds, avoid making spur of the moment decisions. Con men are masters of hard sell sales tactics and will try to sweep you up in a frenzy of impulsive greed by appealing to your brain's reward center. Once engaged, it will motivate you towards the reward as if it were real and attainable since it doesn't have a good grasp of odds and risk. Pay careful attention for phrases like "There's a really short window of opportunity" or "You'll miss the boat if you don't act now!". These are all signs that the scammer doesn't want you to reflect on what he or she is saying. In the grand scheme of things, there are few if any solid investments that won't be there the next day!

Get a Second Opinion

Second opinions are not just for medical diagnoses. I learned some time ago that a second, third, and even fourth opinions are an invaluable recourse when evaluating a dilemma or deciding on a course of action. I was dealing with a difficult boss at the time, and I was at my wits end as to how to handle the situation. Siting down with my trusted friends allowed me to get a fresh perspective from people who had a real concern for my well being and weren't so close to the problem. In fact, when I starting having problems with my financial planner a couple of years ago, it was my spouse and friends who were the first to suggest that I had been a victim of financial fraud. Having invested both money and my hopes and dreams into this individual's con, I was simply to close to the problem to see that all the signs were right under my nose!

Ask the Five W's

We all know about the five W's, but in this case they refer to they "Why" question...times five! This is a great technique for revealing hidden agendas and half-baked schemes because it exposes the details of the person's M.O. Begin by asking "Why are you recommending that I | let you handle my investments | put money into stock X | contribute to your pool fund?". Once they answer that, go to the next level: "Why | are you so certain that you will beat the market averages | will stock X's recent merger translate to more money | is your pool fund superior to a similar mutual fund?" The average conman won't get further than two to three levels, tops, because the fine details will expose the flaws in their logic. In many ways selling a con is a lot like a magician performing a trick. Both want you to believe something that isn't real. To do that, they have to use diversion, and keep you from asking the right questions that will bring the "trick" to light.

Check References

It's hard to locate a good character reference when you leave a trail of destruction and broken dreams behind you! Anybody with credibility will have several references who will happily recount how pleased they were with so-and-so's products and/or services. As a side benefit, the individual will likely need a few days to round up some good referrals. This will give you the time out to cool off and get some second opinions. Once you have the list, you can subject them to the five W's to make sure that they aren't in on the scam themselves. One good question to ask is what do they do for a living? Con men tend to have many jobs that involve some sales or entrepreneurial element to them. As a general rule, conman abhor "regular" jobs and would rather be their own boss. Another pertinent question is how they know the individual. If the answer is that they met at a multilevel conference, it could be a danger sign.

I used to think that references were a complete waste of time because no one would ever give you the names of people who had anything other than a stellar experience. That was until I decided to ask for a couple of references when trying out a new personal trainer. One of the references felt that the trainer in question did not do an adequate job of helping him reach his particular goals. In all likelihood, the trainer was not aware of this! Even if no obvious patterns emerge from your reference interviews, you may get a better idea of what kind of person relates best to your potential business associate. It may just turn out that they are honest, but that their methods or style just aren't right for you.

Beat Them at Their Own Game

Most experts advise to resist the temptation of stringing the scam artist along or trying to beat the lowlife at his or her own game. It is true that many phone and Internet scam artists are part of organized crime outfits. There have been accounts of people trying to play it smart by going to the con man's country to make sure that nothing goes wrong. Once there, they had to fend for themselves, at the mercy of a foreign country's laws. They invariably lost their shirts to extortion or suffered an even worse fate!

Now that I've scared you, if you make sure not divulge any personal information, pulling one over on the scammer can be immensely satisfying and a lot of fun. Ironically, con artists tend to be highly susceptible to the very emotions that they use on their victims, such as greed and fear. It makes sense that a person who is willing to dedicate so much effort to extracting money from people in such an unethical way would be of the greedy sort themselves! There is a website dedicated to the art of "scambaiting" called 419eater.com. One particularly commendable story is entitled "Harry Potter & The Well of Scammers". It's a hilarious recounting about how one scambaiter managed to convince a Nigerian spammer to duplicate the entire contents of Harry Potter and the Chamber of Secrets by hand. There are even scans of each page included for proof. Fantastic!

The next installment will focus on what to do if you find yourself in the unenviable position of having been victimized by a can artist. There are more courses of action than you might think! Until then, I hope that the information contained in this article will help you stay safe.