BEWARE! PONZI SCHEME INVESTMENT SCAM FROM CHINA

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34542134BREAKING NEWS

Awhile back I was introduced to a man who provides ‘business and networking opportunities’ in Guang Xi, China. The ‘too good to be true’ catch was little to no upfront payment of any sorts for a few days’ trip with accommodation and itinerary all paid for.

The man I met was Mike (pale-looking, average build, dresses and speaks well). During my initial contact with him, red flags were popping all over. I later received a call from a friend who warned me of the proposed trip, and reference checked with another who had very strong words for him as well. These confirmed my suspicion that it was a scam.

Here are some red flags on how you can tell if someone is trying to pull a fast one on you, and how to not fall victim and cry later on.

1. Overcompensation. A amateur conman tends to make big promises in unconvincing ways, but a seasoned one will be more careful to push his message across. One thing to look out for is overcompensation to ‘look genuine’ and ‘appear trustworthy’. Apart from words and behaviors, look for what is unsaid (what he tries to hide) and what is cover up (through compensated micro expression and body language).

2. Who’s Paying. At the back of your mind, always ask who is paying when something sounds too good to be true. If you are not sure, most likely you’ll be the one ended up paying. Scams take advantage of the Law of Large Numbers to cover the cost of pulling it off. Take for example, for every one person scammed, the profit can cover for ten who didn’t buy into it (or can’t afford it). So scammers just need to have a 10% closing rate. Don’t become that carrot.

3. Incongruity. Always poke holes in the proposed scam. This is to test the premise if it really is too good to be true. If the cost is low and the return is high, it’s either a scam or the person failed math. If there is upfront cost on the condition of payout which breaks even after a length of time, it could be a strategy to buy time to rope in more scammers. Even if the scam doesn’t make you lose money, you might be used as a ‘portfolio’ for his future scam.

4. Generic Info. Scammers are afraid to be exposed via a simple search online. Therefore the choice of company or business names will be very generic and usually will return plenty of search results. Remember Data Register? For this case, ValuEd Services. Websites will also have little to no valuable information about their operations.

5. Do Reference Checks. Tell ten people about the proposed idea you heard. If majority of them say that it smells fishy, don’t be stubborn or tempted by greed and fear of losing out. But if ten people think that’s a good idea, they are either in it too or you need smarter friends.

6. Sacrifice Info to Gain Trust. Some scammers will even expose other scams in order to scam you (like what I’m doing now, except I’m not a scammer). Also, they will usually not admit they are scammers (oops). If in doubt, always walk away. If you can walk away from even a genuinely good deal, you’ll be harder to scam. It takes decent level of self-worthiness, non-neediness and self-sufficiency to do that. (But I’m not a scammer really).

Feel free to share and and keep your friends informed so no one will be scammed today.

PS: Mike has a business partner Edwin, who is slightly plump, more down-to-earth, typical of how engineers would look like in business shirts.

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