Aug. 1, 2006 - Justice Served

How fitting that a thief and scammer would be caught red-handed in the most bizarre twist of events imaginable.

Picture this.

A waitress in Westlake, Ohio "cards" a young patron ordering drinks -- and is handed her very own driver's license that was stolen weeks earlier!

I love God's sense of humor!

What are the odds of this happening?

Justice was served, but not the young patron.

Note - This was originally reported by the Associated Press (AP) on August 1, 2006.

Jul. 31, 2006 - Scams from Another Angle

I've written about a number of scams from the perspective of consumers who get ripped off, but here's an interesting angle to "phishing" scams that I had not considered.  What happens when scam artists "hijack" a legitimate eBay business in order to trick people into making payments for goods they never purchased, giving their bank or credit card information, or disclosing personal information that can be used to create false identities?

An Incredible Saga

This is the story of one such eBay retailer as told in a comment she left on my recent post, A Powerful Scam to Resist.

"My ebay store ID is involved in a phishing campaign right now.  The crook is using my store name (heartnsoulauctions) and pairing with various item numbers and then sending fake 'non-paying-bidder' threats to the victims telling them to pay up in 7 days or they will have a strike against them and other threats.  Since my ID is real I am the one fielding the literally hundreds of eBay messages from the victims of the spoof.  It's been 5 months with no help from eBay.  I have been preparing to drop the store and my 100% feedback score, it's very disappointing.  Anyway you wouldn't believe how many of those people really thought someone in their household may have purchased the item without their knowledge and were wanting to work something out to fix the problem." [emphasis added]

She goes on to provide a link to a video about fraud on her blog and also a separate post she wrote about her experience.

I had never given much thought to what it must be like to be in her shoes.  What a pain to deal with it all!  Imagine helplessly watching your business name and reputation being trashed by a hidden foe.

They Took the Bait

The amazing thing in her comment is the point about "how many of those people" receiving the scammer's bogus emails actually contacted her believing there was a problem they needed to work out -- all based on the claims of an email message with no other proof.

And that my friends is why the scam artists keep at it.  Lots of people fall prey and make it worth their while.

Be careful.  Be on guard.  Don't be a victim.

Related Tags: phishing, scams, identify theft, eBay, scam artists

Jul. 26, 2006 - A Powerful Scam to Resist

Today's Wall Street Journal ran a tiny blurb about internet "phishing" scams which use the Internal Revenue Service (IRS) as the lure.

This fits perfectly with my recent posts, It Can't Happen to Me and Protecting Mom and Dad, so let's take a closer look at these "phishing" scams.

According to the IRS website, "phishing" is defined as:

"a scam where Internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity."

Most phishing scams use large financial institutions such as Citibank, Chase, PayPal, etc. as the lure, hoping that the email will land with someone who really has an account with that institution (see this example).  Those emails are easy to ignore if you don't do business with the particular bank or credit card company named in the email message.  No problem.

Phishing scams that use the IRS, however, are tougher to ignore because everyone does business with IRS at some point.  And when we see an email that appears to be from them, it probably gets our attention.

Be wary.

The IRS website lists some recent schemes.

• "One e-mail scam, fraught with grammatical errors and typos, looks like a page from the IRS Web site and claims to be from the "IRS Antifraud Comission" (sic), a fictitious group. The e-mail claims someone has enrolled the taxpayer's credit card in EFTPS and has tried to pay taxes with it. The e-mail also says there have been fraud attempts involving the taxpayer's bank account. The e-mail claims money was lost and "remaining founds" (sic) are blocked. Recipients are asked to click on a link that will help them recover their funds, but the subsequent site asks for personal information that the thieves could use to steal the taxpayer’s identity."
  
• "E-mails claiming to come from tax-refunds@irs.gov, admin@irs.gov and similar variations told the recipients that they were eligible to receive a tax refund for a given amount. It directed recipients to claim the refund by using a link contained in the e-mail which sent the recipient to a Web site. The site, a copy of the IRS Web site, displayed an interactive page similar to a genuine IRS one; however, it had been modified to ask for personal and financial information that the genuine IRS interactive page does not require."

I can just see people falling for this stuff.

Another thing to keep in mind is that the IRS should not have your email address to begin with unless you provided it to them.  Furthermore, even if you did provide them with your email address, they are most likely to communicate with you through the U.S. Mail anyway.

My personal rule of thumb is to totally ignore all such emails and to delete them immediately.  I don't even open them.  If there is an urgent matter that requires my attention, then my bank, credit card company, or the IRS have more reliable means of contacting me.

Remember, never give out your personal information to anyone, anywhere unless you are absolutely certain you know whom you are dealing with and that the transaction is secure.

When in doubt, don't do it.

Jul. 20, 2006 - Protecting Mom and Dad

The July 2006 issue of Money has a fantastic article titled Keeping the Bad Guys Away from Mom & Dad.  Every family should read and discuss this article.  It could save your family much money and heartache.

This article dovetails perfectly with what I wrote in It Can't Happen to Me yesterday.  The point being that very nice, intelligent people can be taken in by scammers, especially the elderly, to the tune of more than 5 million senior citizens per year.

And it's not for the reasons you might assume -- old age or senility.

Instead, scammers use high pressure sales tactics or develop trusting social relationships to pry money out of even the most cautious, savvy, and sophisticated seniors.

Common Scam Techniques:

• "Free" Investment or Estate Planning Seminars - usually selling annuities, viatical statements, promissory notes, trusts, or other high commission/fee investments or legal products at seminars offering a free lunch or dinner.

• Telemarketing Scams - typcially sweepstakes, phony charities, free vacations, etc.

• Affinity Fraud - normally a scammer tries to sell dubious investments after gaining a person's trust through participation in a social group or organization.

Seniors aren't the only targets of such scams.  You might have had similar pitches made to you.

Read the article.  Have your parents read the article.  Learn the warning signs of a scam, how to protect your family, and what to do if someone in your family becomes a victim.

Don't be afraid to discuss the topic of your parent's money with them.  Keep the door of communication open.  Let them know you care and that you're always there for a "second opinion" if they're ever tempted by a "too good to be true" offer or investment.

Your folks have lived long, worked hard, and saved their money to get to this point in life.  Don't let an opportunistic scammer destroy your parent's dreams in one careless moment.

Jul. 19, 2006 - It Can't Happen to Me

Have you ever read stories about financial scams and wondered what kind of people get taken in by them?  Here are three posts to refresh your memory:

• Too Good to Be True?
• Think Before you Leap
• Ponzi Schemes

I'll bet you've often thought that such things couldn't happen to you.  I sure don't think they could happen to me.  But they do happen to some very good, intelligent people who should know better.  How?  It's partly because of the subtle lure of greed but other times it's out of desperation and ignorance.

If you've been following the news over the past few months, then you might have heard about the Winkler family in Selmer, Tennessee.  It was there on March 22, 2006, that Mary Winkler shot and killed her husband Matthew Winkler in their bedroom.  Matthew was the popular pastor of the Fourth Street Church of Christ and from all appearances, the Winklers were the "perfect" Christian family.  After the shooting, Mary fled with their three young daughters to Alabama where she was arrested on March 23.  What a tragic story!

As details have emerged behind a motive in the killing, it has become clear that money was a central issue straining the Winkler's marriage.  Some of that financial stress, and perhaps the catalyst behind the murder, was due to the Winklers having been taken in by scammers that promised them wealth.

While this latest development in the case is unpleasant, it is worth reading so that you can appreciate the allure and gravity of financial scams.  They can literally be deadly.  That's why you must always be on your guard.

None of us believes it can happen to us.  But it does happen to some really nice folks.  Sometimes it ends tragically.

By pointing this out, maybe there is someone out there who may yet be saved from the pain and suffering of the Winkler family -- whether that be the loss of money or even a life.

Perhaps Matthew Winkler's experience and death will not be in vain.

Mar. 21, 2006 - The Subtle Lure of Greed

Christians may wonder why all the hoopla over the book Rich Dad Poor Dad by Robert Kiyosaki on my blog.  As I demonstrated in my three-part series on that book, the not-so-subtle message of Kiyosaki is pure greed built on a shaky foundation of deception and the twisting of biblical principles.  That should be enough evidence for anyone to steer clear, but even more so for Christians and the churches, bookstores, and homeschool vendors who minister to them.

Slippery Slope

Some, however, are of the opinion that you can just take the good (what little there is) and leave the bad.  If life were only that simple!  We may as well ask God if just a "little bit" of sin is okay.

Shouldn't our response be something more like David's in Psalm 101:3?

"I will set no worthless thing before my eyes; I hate the work of those who fall away; It shall not fasten its grip on me." [emphasis added]

What we read and digest has an impact on our thinking and behavior.  Even Kiyosaki believes that.  Most of us would not be too eager to drink water tainted with poison.  Likewise we should not ingest the world's values through what we read, no matter how "inspiring" or "good" it makes us feel.

A Brother Goes Astray 

Consider the case of a Christian brother who emailed me from Singapore recently.  He began reading Rich Dad Poor Dad because he was struggling with money and didn't feel he had enough.  He felt God led him to this book which he "devoured."  But he also imbibed something else along with Kiyosaki's dubious financial teachings and it fastened its grip on him quickly:

"Later I realised that the values taught in the book influenced me to become greedy for money, and attaining financial freedom became the first of my priorities, not God.  My priority became to make $4 million so I can retire comfortably on the passive income it can generate.  And if there was a lazy way to do it, all the better."

The greed was already there but the book added fuel to the fire.  This can be dangerous as Paul noted in I Timothy 6:10, "For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith, and pierced themselves with many a pang." [emphasis added]

Don't take the risk.  You may not escape the flames you ignite. 

Putting Things in Perspective

There is nothing wrong with wealth, whether that be $4 million or $4 billion.  There is nothing wrong with financial freedom, retiring comfortably, or passive income.  These things are a blessing from God that He may well provide.  But they become a curse when they are exalted above God and take His rightful place in our lives.  That's exactly what happens when you feed the monster known as greed.  It fastens its grip, consumes your being, and is still not satisfied.

Fortunately, this man was able to break free.

"I thank God for the wisdom on money that He has given me now, but I'm slowly learning that our purpose on Earth is not to make money but to serve others and bring them with us into heaven.  I still struggle with my priorities sometimes, but God used Kiyosaki's book to teach me something, that financial freedom must not become our god.  We can never become secure in money, ever.  That God has a way to make it disappear if He so chooses.  I hope I've learnt my lesson well." [emphasis added]

I'd say he's learned his lesson well.  He learned from his mistakes and humbled himself before the Lord.  When forced to choose between storing up treasure on earth or in heaven, he wisely chose the latter.  That's a lesson we can all take to heart.  Keep up the good work my friend!  

In this case, God turned a book Satan used for evil into good.

How many instead unwittingly drink Kiyosaki's poison and pursue greed to their own destruction?  Probably more than we care to know.  How sad.  Don't let greed fasten its grip in the first place.  You may not be able to pry it off later.

Related Tags: finance, greed, money, Robert Kiyosaki, Rich Dad Poor Dad, biblical financial principles

Mar. 18, 2006 - Ponzi Schemes

You may wonder why I've made such a fuss lately about being skeptical of "too good to be true" claims and investigating thoroughly before taking any action.  Some readers have commented on other blogs or forums that these schemes are so obvious that I'm just wasting my time warning people.  They believe that anyone should be able to spot bad deals and hustlers right away.

That may be true for some or most of you, but there are many people who get taken in by deception.  Example that I have written about recently include Robert Kiyosaki's Rich Dad Poor Dad and Kirk S. Wright's International Management Associates investment company.

That's just the tip of the iceberg.  The world is full of charlatans preying on trusting individuals.  You must always be vigilant.

Now I've come across this story about a Ponzi scheme involving members of the First Church of Christ - Scientist (a cult) in which about 50 investors lost over $47 million! 

How were these investors duped?  First, they were too trusting of a fellow member of their church and didn't ask the good questions I outlined in my "Too good to be true?" post.  Second, they were blinded by their own greed (surprise, surprise).  Check this out from the Reuters story:

"As a Church of Christ Scientist practitioner, [Eric] Resteiner exploited trusting church members, to whom he bragged of having a 'God-given gift' as a trader, prosecutors said.

 

Promising no-risk, 50-percent annual investment returns, he claimed to be one of the world's few traders able to do bank debt deals usually reserved for the rich, officials said.

 

Between 1997 and 2000, dozens of people, many of them church members, gave Resteiner and associates millions of dollars, authorities said. Some of the investors got money back, but most of that was taken from others' payments in what is often called a Ponzi scheme."

Fifty-percent annual returns!  No risk!  These folks were taken in by their own greed as much as they were by a smooth-talking crook.

Some of you may not know that a Ponzi scheme works by using money from later investors to pay off earlier investors.  It's a house of cards that works for awhile until it gets too big and collapses, leaving most folks empty-handed, as happened in this case.

So where did all that money go?

"Resteiner kept a large home in the Bahamas, a 176-room villa in St. Moritz, Switzerland, servants, a 110-foot (33 meters) yacht, an airplane, a helicopter and luxury vehicles, officials said."

Investors beware!  Evaluate every claim with a critical eye and also consider the motives of the person proposing the investment or selling you their system.  What's in it for them?  Remember, if it's too good to be true, it probably is.

Finally, evaluate your own motives.  If you're picturing getting rich quick, vast wealth, or quitting your job then you are blinded by greed.  All rational thinking has been suspended.  You will not be discerning and will likely prove the old adage that "a fool and his money are soon parted."

That's why I keep writing about this topic.

Related Tags: Ponzi schemes, Robert Kiyosaki, Rich Dad Poor Dad, money, finance, scams, get rich quick, Eric Resteiner