I was going to start today be sharing my observations about Friday’s market drop, the biggest since September 2011.
Then I read about the scam that tricked an older woman in the Bay Area into “investing” not only $200,000 of her own money, but another $300,000 that she was talked into borrowing. Sad to say, this story is not unique, and the Internet has made it even easier for crooks to wipe out the savings of trusting, usually older, individuals.
Although we’ve all heard these stories of trust gone wrong, I would guess that very few of us have been the victims of fraud, or even been contacted in person, by mail, telephone, and, for the past 20 years, the Internet. Prior to Friday, I only had one “offer” to make a lot of money to find victims by tricking local investors. Believe it or not, the would-be scam artist lived up the road in Vacaville.
It involved my posting a fraudulent stock price in the “pink sheets,” where penny stocks were listed more than 40 years ago. It was a high-risk scheme that could have involved my losing my license, being hit with a fine or even facing a prison sentence. It didn’t take much time for me to refuse the offer and report it to my compliance department. Amazingly, nothing happened to this low-life, and he tried various other approaches to talking people out of their savings over the years.
Fast-forward 40 years to this past Friday, and let’s look at an email sent to me, which caught my attention: “Dear Cardmember, The security of your personal information is our primary concern. Recently we observe suspicious login attempt to your Discover Card account. All information associated with this account has been temporarily limited. We implore you to confirm your account by following our secure website (with website listed) to avoid account suspended. Sincerely, Discover Card Account Service.”
Since I haven’t had a Discover Card in many years, I wondered how the fraud character got my name and where he learned English.
The sad thing is that these messages, probably sent from overseas, will entrap 1 in 100 targets. You might think contacting that many potential suckers would take a lot of time, effort and perhaps money. Not true. There are canned lists of names with emails that are ready to go, quickly, cheaply and easily. We can only imagine what will happen to the tens of millions of names hacked from the Target chain, and the smaller list stolen from the upscale Neiman Marcus.
Looking back 43 years to my training sessions in New York, we were warned that potential investors might associate a cold call with “bucket shops.” We had to assure prospective clients that we worked for large, upstanding firms, first of all by not trying to sell them a stock on the first call. I never made a cold call, but relied on the three-cent postcards to troll for prospects and trying to get an appointment so they could see how trusting I was.
Who would have guessed 40 years ago that there would be a painless way of contacting potential investors without spending any money or getting in your car and crossing the Bay Bridge?
There used to be four ways of letting prospects know who you were: Mail, telephone, knocking on doors and investment seminars. I suppose you could have chartered the Goodyear blimp, but, these days, it’s much easier and cheaper to use the Internet to make contacts. You can even send your picture, although I would, sadly, use a photo of someone younger and better looking.
Bud Stevenson, a retired stockbroker, lives in Fairfield. Reach him at [email protected]