There seems to be a lot of telephone and postal scams on the go at the moment. The media is reporting about international lottery frauds that are creaming huge sums generally from vulnerable older people who seem to have more trust in official looking documents and in the words of reasonable sounding people. That is not to say that many more informed victims are not caught out as well.

Best advice has always been to take care if somebody is trying to sell you something. At one time we would buy what we wanted when we needed it. In this day and age of consumerism we are persuaded to buy all the time. Markets are created simply to dispose of goods and make money. We all read magazines and watch the TV and are persuaded all the time to buy more and more branded goods. However, when somebody tries to sell you something by directly approaching you – think twice.

Cold calling is a technique used by many “reputable” organisations such as banks and retail organisations. However, it is also a tool of the fraudster, who is targeting people for their scams who would obviously not be looking their way already. I have talked about the problem of support publishing scams at length, having investigated them on many occasions as a fraud investigator. The most recent telephone call I received from somebody trying to “sell” me something was from an Indian call centre offering me the chance of a Government Grant to insulate the loft in my house.

It is possible to get grants towards the cost of insulating your home, up to 70% of the total cost (100% if you are on qualifying benefit payments).  However, would the Government be using an Indian call centre to push the scheme? This is more likely to be a scheme linked to the supply of expensive loft insulation by a private business. They will apply for the grant all right – but chances are you will not get it or you will not get very much? But you will have signed up to have overpriced loft insulation fitted regardless of how much grant goes towards it and the contractor will be earning super profits on the deal.

Postal scams are the scourge of the elderly. Many get drawn in and placed on “suckers” lists when they reply to the letter telling them to send $20 to release their lottery winnings! Unsolicited sales and prizes should always be treated with caution. If you have note entered a competition then you will not win – and if you do enter and win you will never need to send any money before you receive your winnings.

This direct “marketing” is part of serious organised crime. However, as it is targeted on many smaller victims, it often does not receive the attention necessary from the fraud regulators. A company losing several millions when investing in a Ponzi scheme can easily get the authorities to investigate – but if you pay $500 more than you should to a loft insulation company who will take notice? After all, you have received your loft insulation!

Before I start adding posts covering my research into business opportunities that do and do not work, I want to publish one more warning about how easy it is to fall for simple scams if we are not totally on the lookout at all times.

I was watching the old film Paper Moon last night, with Ryan and Tatum O’Neal. I remember watching this film at school when it first came out in 1973 and being as fascinated by the simple scams being conducted as I am now by the supposedly complex frauds that we suffer today.

Bust has anything really changed? Apart from the theft of some illegal alcohol there were propbably three different scams in the film:

1. By reading the obituary column of a local paper, the con merchants were able to turn up at a widow’s house and pretend that the deceased had ordered an expensive bible for her before the untimely death. So taken aback by the thoughfulnes of the former husband the widow was only too willing to part with $10 or $20 for the cheap $1 book.

2. The scam merchant buys something for a few cents in a shop and pays using a $20 bill. Shortly later his accomplice visits the shop (in the film an endearing 9 year old Tatum O’Neil) and buys some ribbon for a few cents using a $5 note. On being given her change of $4 and some coins she promptly burst into tears claiming that she paid with a $20 that her Aunt had given her for her birthday – which she could prove because it had “Happy Birthday” written on it. Of course there it was in the till (left by Ryan previously) and who could refuse to reimburse the little girl?

3. “Dropping some ones” – swapping dollar notes for fives with the confused shopkeeper was not so much fraud as sleight of hand.

Simple tricks against unsophisticated people perhaps, but we still fall for similar cons perpetrated on much larger scales. Have you ever had a call from a publisher wanting to know if you would support a good cause, a charity perhaps, and obtain valuable business exposure at the same time. This is what support publishing is all about. Con men are simply playing on the heartstrings, very few people reject charitable requests easily.

One thing that the film does illustrate clearly is that people do not always fall for the fraudster out of greed, as is often the case. They often fall because they think they are doing some good

My first post for this new blog site is going to take a very general look at the problem of fraudsters in the business opportunity marketplace.  As a “fraudbuster” (people like to glamorize my role – it has its moments but work is work!) I tend to come into contact with a lot of marketing material for a whole range of dubious get rich quick schemes.  However, when I describe one or two of them I think you will start to see that the whole subjecy is a very grey area.  What is fraud and what is sharp business practice is not always clear – and many of the get rich quick schemes could work if the person wanting to get rich was prepared to work hard, perhaps invest some money and realised that “quick” could mean within a year or two (not overnight).

Many scams that I investigate are set up and run by very clever and enterprising people.  The only difference between them and (hopefully) you or I is that they want it quickly and easily without the slog.  If you are not prepared to put in the effort do not expect the returns.

I will digress from schemes that people are selling to schemes that people set up to get rich at others’ expense.  The example I have in mind is called “support publishing” and I have investigated several of these.  I will post a more formal article on the problem in a later post.  Support publishers ring around small businesses using yellow pages or contacts from the local press.  They pretend to be “supporting” charitable organsisations or good causes such as the police or fire brigade.  They offer you an advertisement in a booklet they are preparing on say “road safety for children” to be distributed widely around alll schools in your area.  You would feel mean if you did not take out an ad showing your support – anything from £100 to £1000 a time!  200 advertisements in a regional booklet, 50 regions – do the maths!

And the number of second rate booklets published (if at all) will be one for each advertser and maybe one or two to a school here and there.  Money for old rope and a waste of your advertising budget.  You will get no business from it and will have the satisfaction that you have funded the publishers’ lavish lifestyle.

So I hope to cover these scams as well as the money making ideas – as they are essentially get rich quick schemes that the police will chase you for if you start one!