“I need a dollar dollar, a dollar that’s what I need.”
Besides being the lyrics to the song I Need A Dollar by Aloe Blacc it’s something we’ve all thought at some point, rather we’ve all needed/wanted money, some more than others. Desperate times call for desperate measures, so when ads pop up saying “I made $12,000 in a month from working at home,” who wouldn’t want to jump at the opportunity? While many of these schemes may seem legitimate, an extremely large percentage are not.
Why Do People Fall for “Get Rich Quick” Schemes?
Stephen Greenspan is a clinical professor of psychology at the University of Colorado and author of Annals of Gullibility: how we get duped and how to avoid it. He said he has a theory as to why people are susceptible to being duped. “The four factors are situation, personality, cognition and affect,” he said.
Some people are more trusting than others, causing them to become more vulnerable. However, even Greenspan was not invulnerable, falling victim to a scheme by Bernard Madoff. Madoff was responsible for a Ponzi scheme that duped clients out of billions of dollars, until he was caught and sentenced in 2009.
The global financial crisis of 2008 helped Madoff get more money, according to Greenspan.
“During a time of depression or recession people are more weary, but one of the things that made people particularly vulnerable to [Madoff] was that everyone [taking part] seemed to be doing very well and everyone wanted to get on the bandwagon” he said.
Greenspan said when a person sees his or her affiliates investing in a company or person, the risks are much less apparent. Greespan himself went through a reputable hedge fund.
Advertisements that claim you can be your own boss can be very tempting, but most often the scams behind them will lead to a loss of money, according to the United States Federal Trade Commission.
Many of the work-at-home jobs seem very simple with little or no training which makes them so appealing. The U.S. Federal Trade Commission lists some of these jobs: envelope-stuffing, assembly or craft work, rebate processing, online searches, and medical billing, all of which are asking for some sort of investment.
Who is Vulnerable?
According to the Ontario Securities Commission anyone with money is vulnerable.
“Most successful scams are built on trust. Scam artists often start off by asking seemingly harmless questions about your health, family or hobbies. For example, they may find out you’re worried about not having enough money to retire on. They then use what they’ve learned to target their sales pitch to your specific situation,” according to the Ontario Securities Commission website.
Greenspan said elderly women who have lost their husbands are a major target for financial schemes as well as people who live in small rural communities.
How to avoid being scammed
One of the ways to avoid being scammed, according to Greenspan, is to make yourself more aware and form a solid understanding of what’s going on if you suspect you are possibly being scammed.
When it comes from the work-from-home schemes the U.S. Federal Trade Commission has some questions you should ask yourself:
– “What tasks will I have to perform? (Ask the program sponsor to list every step of the job.)
– Will I be paid a salary or will I be paid on commission?
– What is the basis for your claims about my likely earnings?
– Do you survey everyone who purchased the program? What documents can you show me to prove your claims are true before I give you any money?
– Who will pay me?
– When will I get my first paycheque?
– What is the total cost of this work-at-home program, including supplies, equipment and membership fees? What will I get for my money?”
Aside from investment companies and television advertisements it is important to be weary of online scams. Many of these come through emails and pop-up advertisements.
Greenspan said someone told him of a person who received an email saying that he had received a large inheritance, believing it was a miracle. After having to pay large sums of money in order to get the money, he ultimately ended losing $2 million.
Most emails that say “you’ve won a large amount of money” or “earn money easy” are most often scams and should be avoided.
Bruce Cran, president of the Consumers’ Association of Canada, said everybody wants to get something for nothing, but ultimately, such things don’t really exist.
“There is no genuine ‘get-rich-quick’ scheme…if it’s too good to be true, it probably is.” he said.
So when you see something that says “get rich quick” it might as well be saying: “give me all of your money.”
