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Don’t Think It’s A Scam? Request A Fifth Opinion
Posted By Jim On 09/07/2007 @ 1:04 pm In Shopping | 3 Comments
The human brain is notoriously good at sniffing out fraud, but every so often something comes along that, for whatever the reason, sneaks by our fraud detector and makes us do something we will later regret. That’s why you should do what NASA scientists to… build in redundancy for your fraud detector by getting another fraud detector: your friends. If something sounds too good to be true and you haven’t smelled fraud, get your friend to take a whiff and let you know what he or she thinks. If they think it’s okay, get a third, fourth, or even fifth opinion. If you have an especially cynical friend or one who is a domain expert (or more of an expert than you), make sure you get his or her opinion as one of the first five. If everyone says thumbs up, then go for it!
Let me give you a real life example of this situation. Back in college one of my friends was dreaming up schemes to make millions of dollars and fell upon a scheme where you could buy twelve XBoxes gaming systems off a seller on eBay and then flip them on the local school message boards for a handsome profit. He had convinced two of our friends to go in on the deal and was searching for a fourth when he asked me. I listened to his plan and everything sounded fine until he told me that the source of his XBoxes gaming systems off eBay and that he was getting a great deal. Immediately my fraud detector went off. It’s not suspicious to find a great deal on eBay, it’s suspicious to find a great deal on twelve $200 gaming systems. I told him that the auction sounded fraudulent and that I didn’t want to become involved financially but I’d do what I could to give them advice on how to protect themselves in case there was a problem. Well, eventually the whole scheme broke down as the three of them came to their senses but I was the fourth opinion (counting his own as one) and the first that sounded off the fraud alarm. Had the deal gone through with only three people (say, if the auction was for six XBoxes instead of twelve), it would’ve gone through and perhaps someone would’ve been defrauded (or not, there are plenty of legitimate bulk auctions on eBay).
There’s a reason why Ponzi schemes and the Nigerian scams are still alive and well today, they work well enough that the folks running them still turn a profit. Ponzi schemes are now called HYIP or High Yield Investment Plans (oh, 23049823094% return in one day? Sure!) and Nigerians are still getting people to cash fake million dollar checks and sending back legitimate ten thousand dollar checks. So, the next time you think something is way too good to be true, request all the way to a fifth opinion. If it ends up being a scam, you can at least rest with the psychological benefit of knowing four of your friends would’ve been duped too.
(Incidentally, some folks are turning the tables on the scammers  in a hilarious way)
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 turning the tables on the scammers: http://www.419eater.com/
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