The Scam Artists Are On A Roll Again

Last week I received a message from the friends network in which I'm enrolled. It was an advisory to stay out of an opportunity that might be coming my way. I had seen a number of these "opportunities" earlier on the web. The description that my friend provided me did not surprise me.

The "deal" involved my signing up for free. Google Autofill would provide the guts of my name and address lines. All I had to do was enter a user name and password. I elected not to proceed any further.

Here is what would have happened. The scam entrepreneur would have captured my name, address, city/state/zip code, e-mail address, verify e-mail address, user id, password, verify password, home phone, work phone, and cell phone. I would be classed as an opt-in lead. Since I was signing up as a member, it would all be free. I would not have to pay a cent to join.

However, it's no fun being just a plain member. Of course, I would get tons of information for my free membership. Most of all, I would get hype about upgrading to Gold or Platinum. For $39.95 a month to upgrade to a Platinum member, I could now enroll other poor suckers to their free membership. I would get paid for every signup that subsequently upgraded to Platinum. This would go at least seven, maybe ten levels down. By God, by golly, all my dreams would come true. I would finally become a millionaire.

Never mind the financial side of things. If I were to upgrade to being a platinum member, the entrepreneur would take care of it. Each month, my commissions will post to my PayPal account. I would just have to look for my e-mail that would say, "You Have Money!"

Let's look at what would happen if I persuaded you to sign up, and if you chose to upgrade. I'll play the role of the scam entrepreneur. You'll be the victim.

More often than not, you will go through many months where not one of your signups will upgrade. Without upgrades, there can be no commissions. You become very concerned over this. All your phone calls to your upline sponsor (that would be me) do not get returned. You learn that you do not even have a valid phone contact to your entrepreneur. In your haste to sign up, you never made a note of that phone number.

In the meantime, your PayPal account gets depleted. When PayPal does not have any funds, it will debit your credit card, checking, or savings account to get the debit paid. PayPal is not in business to lose any money, especially on your transactions that have gone sour. You can go to state or Federal sources for help. Here, you will realize that the sky has fallen in on you if you have invested in an offshore financial deal.

Scam artists will do anything to gain your trust, in order to entice you to invest in their schemes. They may make promises of huge profits from investing in offshore markets. Scam artists may even guarantee you the returns to give you a sense of security. They are aware of the large amounts of money you pay in federal and state taxes and your frustration with earning low returns. They will pretend to share your opinions, and sympathize with your frustration.

In one example, investment seminars approached farmers in Missouri and Kansas about offshore investment opportunities. These "deals" guaranteed returns of 15%. One potential investor was told that large Canadian banks use depositors' money to invest in these same offshore markets for their own profits.
When someone offers you a "deal" whose returns are more than the going rate, there is high chance that you will lose your money. There are several red flags that will tell you that a rat is lurking under the woodpile when evaluating investment opportunities:

1. Offshore investment opportunities. Once you send your money out of your state, province, or out of your country, you lose any protection provided by law. Frauds and scams frequently involve an offshore institution to make it more difficult to trace the transactions. Once your money is in someone else's control you may never get it back.

2. Unsubstantiated guarantees. A guarantee is only as good as the guarantor. You should check Dun and Bradstreet to see about the guarantor's credit rating. If the scam entrepreneur can borrow money from the bank at 8% and invest it at 15%, why is this person willing to pay you 15% on your money? This is a clear signal he needs you to lend him money because his credit is so bad the banks will not lend him anything other than a sneeze.

3. High return and low risk. The higher is the promised return on your investment, the greater is the risk. If you think that a guarantee lowers your risk, read the line about unsubstantiated guarantees.

Here is how you can protect your money:

1. Be wary of investment opportunities that offer guaranteed high returns and low risk. The old adage about your proposed investment being too good to be true is a wise saying.

2. Check out the investment opportunity, and the registration of the person or company offering you the investment. You may find one or two ugly surprises. However, if your pie in the sky gets broken, it is better than you ending up with egg on your face and an empty bank account.

3. Have a trusted professional, such as your financial adviser, lawyer or accountant evaluate any investment opportunity. This is far better than responding to hype that you hear pitched over the telephone or at an investment seminar.

For further information or to file a complaint, contact a Securities Commission near you, or any of the following institutions:
1. Better Business Bureau
2. United States Federal Trade Commission
3. US Securities and Exchange Commission
4. North American Securities Administrators Association
5. US State's Securities Regulators
6. National Fraud Information Center
7. Fraud Bureau
8. Canadian Office of Consumer Affairs
9. Investor Learning Centre of Canada

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