Even in good economic times, scams, rackets, and cons always threaten regular people. But in bad economic times such as our own, they swarm around us like never before. These days, it’s extremely difficult to tell real from fake. Even for sophisticated people who believe themselves to be beyond this, there is always a scenario that will trip them up.
I’ve written about scams for years. Especially since our lives migrated to the digital realm, and data leaks and theft became a way of life, we have been inundated. This is getting worse now that most of our phone numbers have leaked to massive databases built and shared by criminal and quasi-criminal organizations the world over.
I have all the tools to protect me, but even so, I’ll report a few recent cases that almost snagged me.
I was enjoying a spring breeze and napping a bit when my cell provider called telling me that they had overcharged me last month and would like to push a credit to my next month’s bill. I said sure. What could go wrong?
The right thing to do in this case is simply to open up your online account to your provider and see if this is confirmed. But that takes work and thought. On a lazy hazy day, I stayed on the phone instead. He then proceeded with a verification process, which he said would confirm my identity. Alarm bells went off in my mind, but I held on.
He said to look at my phone and hit confirm. A notification appeared on my screen. It was a Gmail app asking me to grant access. I refused. I asked the man why he needed access to my email. He started getting testy and sent again. I refused again. He got angry and said that he didn’t have all day to keep this up. At that point, I hung up rather amazed that I had been strung along even that long.
A week later, I got a call from my bank wanting to reverse a charge on my credit card that turned out to be fake. They wanted, again, to confirm my identity. It seemed real until they asked for the PIN number of my account: No bank would do that. I opened my browser to check my bank records. There was nothing there about a bad charge. So I made something up to the man on the phone. I said that I can observe a change of address, and he immediately said yes, that’s the issue.
That’s when I hung up. These scamsters are very good at following verbal cues that you give them. They have some information about you such as an old address, phone number, and name, but they are seeking more. People often give this information themselves and then the scamster repeats it in a different form. Amazingly, this often works.
Last night, I got a call from “Coinbase” that said that I needed to confirm an email. I knew it was a scam but decided to play along. I said that I don’t have a Coinbase account. He then asked if I had bought or traded any crypto in the past year.
Enjoying this nonsense, I told him that I had an FTX account, just to see what he would say. He asked if it was an NFT account at FTX (he was guessing based on experience), and I said yes. He then confirmed that this is what prompted the call, and he wanted more information.
He then talked me through how to open a new browser and put in an address that would have given him direct access to my entire laptop. I guess this works for these people sometimes. It’s simply incredible. At that point, I just laughed and hung up.
These rackets are becoming ever more sophisticated. Even very smart people fall for them. Indeed, it’s never a good idea to think you cannot be tricked, because it’s sometimes those very people who buy in and go the whole way. Believing that they can tell real from fake, they don’t turn back even when things get strange.
The rise of crypto tokens in particular set the stage for a global whirlwind of racketeering. The marketing of thousands of ridiculous tokens backed by preposterous white papers is only the most obvious case. It gave birth to many other strange schemes.
A few years ago, I received a call once from two people claiming to be Hollywood producers. They said that they wanted to hire me as a film consultant. Immediately, I was of course flattered and agreed in principle. They sent me a contract that stipulated that I would be paid a portion of the profits of the film.
Here’s where I got suspicious. There would likely never be profits from this film. Indeed, like in the movie “The Producers,” the goal is to spend as much money as possible and write it all off as business costs precisely so that the film doesn’t make money. In effect, they were wanting me to work for free. I didn’t sign.
This angered them, but then the calls became more frequent. This time, in addition to pressing me to sign, they wanted contacts of various people within the bitcoin community to call about investing in the film. Their plan was to use my name to gain the confidence of wealthy crypto entrepreneurs.
I told them that it wasn’t my job to get them money. I blocked them entirely. I cannot prove that it was a scam all along, but it likely was. My role was to provide some credibility for these people to gain access to others in order to pillage them for “investments” that would likely vanish soon after.
Very often, the difference between a real business and a scam can get very blurry. This was the case with FTX, the crypto racket run by Sam Bankman-Fried. Despite his role as head of one of the largest financial scams in history, his name has largely disappeared from public life, and he remains free as a bird.
In other words, there’s every indication that the whole company was established as a money-laundering operation to begin with, all directed toward helping large donors get around campaign finance law. The same goes for the supposed venture funding he received: It came in the door and out the door. The rest was just window dressing. The timing reveals everything: 2019 to 2022. Meanwhile, the whole scandal has disappeared from the mainline press.
There are tests you can use to discover what is real and what is fake. The best rule is that if it seems too good to be true, it most certainly isn’t true. Also, trust your instincts. If at any moment in your interaction you have a sense of concern, some ill-at-ease feeling, you should trust that. If when you ask questions, the person gets angry or testy, hang up immediately.
Flattery has always been the best approach of con artists. They want to habituate you to feeling awesome and saying yes while asking for ever more information. People unwilling to admit that they have been scammed keep sticking with the baloney until they are robbed. Beware of such interactions.
One feature of scamming that mystifies me is how so many people—many millions of them—can feel good about their lives while knowing that their whole business consists of lying to and robbing people. What is it about their lives that led them to the place where they can so completely block out the human conscience to engage in such things on a daily and hourly basis, making hundreds and thousands of calls only to get one sucker on the line?
This is where bad economic times come into the picture. There’s a widespread perception in the world today that the rich got that way through robbery themselves. It’s often true. The racketeers often imagine themselves to be versions of Robin Hood and don’t believe that they are doing something bad.
And speaking of blurred lines, this is political season. Running for office is for many politicians just another way of opening a business. I seem to be receiving notifications daily of new people entering one race or another and asking for money.
Oddly, in a politically divided country such as this, this special kind of scam often works. They build a big war chest, lose the election, and flip the funds to a new organization that employs or gives money to their friends. In other words, it’s a racket.
We shouldn’t wonder how it is that private-sector rackets thrive in such an environment. They are inspired by the ubiquity of fully legal public-sector versions of the same.
