Investment Scams – the Cons are Pros

How often have you watched the news and seen a story about a little old lady who lost her life savings to unscrupulous con artists? Maybe you thought, “I’d never fall for that. I’m educated. I’ll never get scammed!”

Before conducting interviews for my story, Mind of a Con Artist, airing on this week’s episode of KCTS 9 Connects, I thought the same thing. But I quickly learned I was wrong.

First of all, it turns out most scam victims aren’t your proverbial “little old lady” who lives alone. It’s true, a lot of scam victims are older Americans, but while doing my research, I learned that many scam victims are middle aged men and women.

I also learned that many victims are well-educated -- someone who is just smart enough to believe they’d be able to spot a scam a mile away. Because Washington State has such a high number of educated people, there are large numbers of fraud victims -- thousands every year. But according to AARP, the number is impossible to peg. That’s because, not surprisingly, a lot of victims lie or don’t come forward, too embarrassed by the fact that they’ve been swindled.

It’s also not surprising that well-educated consumers are ripped off. Con artists often take their tactic straight from Madison Avenue, using common, legitimate advertising methods you see everyday to dupe you. For example “social proof,” one of the tactics I highlight in my story, which basically says, “Everybody else is doing it, so why not you?” Think of McDonald’s when they say “Billions and billions served.” That’s social proof. And the con artists figure, if it works for McDonald’s, it’ll work for them too.

What I found really interesting is that the tactics these crooks use don’t change. The scams may be different, ranging from a fake lottery to a Ponzi or pyramid scheme, but the ways they get you to open up your wallet are the same. As long as the same tactics work, they’ll keep using them.

I came across one con artist who had been sent to jail for his fraudulent behavior. Incredibly, while behind bars, he was able to swindle people out of money. (You’ll see how in my story.) He was so convincing, he conned people out of thousands of dollars, calling his victims collect from the jailhouse pay phone.

So if you think you can’t get scammed – you might want to think again. Anybody can fall for a con artist’s tactics.