Scams Don't Always Have To Be Sophisticated To Be Effective

by ExRat
10 replies
Hi,

I was reading this story earlier and found it interesting.

Some snippets -

Twins Alexander and Thomas Hunter were just 16 years old when they devised the "elaborate" online scam that fooled around 75,000 people, US officials say.

In 2007 the brothers allegedly invented a fictitious "stock picking robot" and claimed on a series of websites that the highly sophisticated computer trading programme could identify stocks that were poised to rocket in value.

[snip]

However, the stocks were not generated by any technical analysis and in fact the brothers were paid by companies to promote their shares

[snip]

Legal papers filed in a New York federal court claimed investors paid $47 newsletters listing Marl's stock picks and $97 for the home software.

[snip]

The twins promoted the scam on websites doublingstocks.com, which claimed the robot's stock analysis earned returns of 34% per week, and daytradingrobot.com, it is said.

Meanwhile, the Hunters, now 20, received at least an additional $1.86 million (£1.15m) in fees from stock promoters for their stock touting services, which was advertised on website equitypromoter.com.

[snip]

In November, Newcastle Crown Court ordered Alexander Hunter to pay back nearly 1m US dollars after he admitted providing unregulated financial advice, according to the BBC.

He was given a suspended 12-month prison sentence.
What's also interesting is that if you do some Googling for the websites/products and see what people were saying about it, you can see discussions about whether it was a scam or not, plus people reporting how they lost money on stocks recommended by them.

You'll see mention of how those who asked the vendor directly for a refund were ignored, but others advised them to go directly to Clickbank in which case they were refunded.

HERE is an example of someone who sent emails to two of the addresses that were listed on the salespage as the email addresses of people giving testimonials. They became suspicious when a boiler-plate reply was sent out in return to both emails with only a few details changed, claiming great success.

Someone else was complaining that they started receiving spammy emails promoting penny stocks to the email address which they used to purchase it.

HERE is an early question about it on Yahoo answers.

HERE is a sceptical Squidoo review.

HERE is a Squidoo review that claims that the product 'rocks!' with the URL including the word 'scam'.

Note this line from the newspaper story -

And once investors followed the bogus advise the shares value and volume would instantly increase.
Some aspects of this scam look quite clever, but in many other ways it provides a retrospective window into just how easily 75000 people can be taken in by a couple of 'not long out of short trousers' BS merchants whose only real skill was having the audacity to put this out there.
#effective #scams #sophisticated
  • Profile picture of the author tpw
    Twins Alexander and Thomas Hunter were just 16 years old when they devised the "elaborate" online scam that fooled around 75,000 people, US officials say.

    I guess "elaborate" now means that there were several pieces to the scam.

    I had always thought that "elaborate" meant "complex".

    There was nothing "complex" about this scam.

    I also find it interesting that people were seeing the writing on the wall and others continued to fall for this scam.


    The twins promoted the scam on websites doublingstocks.com, which claimed the robot's stock analysis earned returns of 34% per week, and daytradingrobot.com, it is said.
    "34% per week"? Wow.

    I guess when you promise people that they can double their return in only three weeks, people are willing to gamble with big money!!
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    • Profile picture of the author R Hagel
      Originally Posted by tpw View Post


      "34% per week"? Wow.

      I guess when you promise people that they can double their return in only three weeks, people are willing to gamble with big money!!

      Bingo, You just nailed the heart of the scam: greed.

      That's why the 419 scams STILL work... because people think that yeah, maybe there's a chance some Nigerian royalty wants to give them millions of dollars. Greed blinds people. It taints their judgment even more effectively than a few stiff drinks.

      All the "good" scams tap into some huge emotional buttons, usually greed or fear. Then again, effective marketing often taps into those same buttons.

      Becky
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      • Profile picture of the author MatthewNewnham
        Originally Posted by R Hagel View Post


        All the "good" scams tap into some huge emotional buttons, usually greed or fear. Then again, effective marketing often taps into those same buttons.

        Becky
        Interesting. If anybody's read Mark Twain's Huckleberry Finn, he has a great scam story about how half the townsfolk get taken in one night by sham actors, and decide that rather than be the only ones taken in, it's better to talk up the performance so that the rest of the town falls for the con as well.

        You can read the story from pages 144-148 here:

        http://www.pdfbooks.co.za/library/MA...MARK_TWAIN.pdf

        Great illustration of the power of ego & social inclusion as major hot buttons...
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      • Profile picture of the author Richard Van
        Originally Posted by R Hagel View Post

        Bingo, You just nailed the heart of the scam: greed.

        That's why the 419 scams STILL work... because people think that yeah, maybe there's a chance some Nigerian royalty wants to give them millions of dollars. Greed blinds people. It taints their judgment even more effectively than a few stiff drinks.

        All the "good" scams tap into some huge emotional buttons, usually greed or fear. Then again, effective marketing often taps into those same buttons.

        Becky
        I read a very interesting article the other day that suggests something slightly different, though it is of course still greed related - Gullibility.

        These people make the scams so obvious they are scams that the people that do fall for them, will fall for anything. According to the article, that is the whole idea.

        Think about it, these are often professional life long scam artists. If you did this, would you say you were from Nigeria? Would you say you were some Congolese prince? Exactly. They are unbelievable for a reason and target the mentally challenged and those who are simply gullible enough to fall for it.

        It is essentially greed of course and I agree with you I'm just adding it's not just greed and fear, it's some very clever thinking on the side of the scam artists to target the easiest section of society to target....followed very closely by the greedy and fearful.

        I'm not argueing with you either Becky, just adding to this thread what I'd read.
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        • Profile picture of the author ot
          Originally Posted by Richard Van View Post

          I read a very interesting article the other day that suggests something slightly different, though it is of course still greed related - Gullibility.

          These people make the scams so obvious they are scams that the people that do fall for them, will fall for anything. According to the article, that is the whole idea.

          Think about it, these are often professional life long scam artists. If you did this, would you say you were from Nigeria? Would you say you were some Congolese prince? Exactly. They are unbelievable for a reason and target the mentally challenged and those who are simply gullible enough to fall for it.


          It is essentially greed of course and I agree with you I'm just adding it's not just greed and fear, it's some very clever thinking on the side of the scam artists to target the easiest section of society to target....followed very closely by the greedy and fearful.


          I'm not argueing with you either Becky, just adding to this thread what I'd read.
          Also by being something that sounds completely ridiculous to anybody with some common sense it means that by the time someone realises they have been scammed of a large amount the reaction they are likely to get from the police or anyone else who they turn to for help is going to be less sympathetic.
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  • Profile picture of the author sbucciarel
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    Amazing how many people can get scammed by a couple of 16 year olds. Interesting story
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  • Profile picture of the author Fernando Veloso
    Just go to show common people love huge income claims - it's not an IM (only) issue.
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  • Profile picture of the author talfighel
    There are teens that are very smart and could fool a lot of people. Take a look at the movie " Catch me if you can" where Leo Decaprio is playing Frank Abagnale Jr. who successfully conned millions of dollars worth of checks before he was 19 years old.

    There are people out there who are 10 steps ahead of others and can fool them easily. This is the case here with Alexander and Thomas Hunter.
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