American Greed on CNBC

[frayne]

Anybody else watch this program ?

I am simply amazed at how supposedly smart people are duped out of their hard earned money and savings by promises of excessive returns on their investments.

Greed has to be one of the major obstacles to FIRE for some people.

 

[Gumby]

Didn't watch the show, but it doesn't surprise me. It seems to me that Greed and its evil cousin Fear are responsible for most of our financial missteps.

 

[scrabbler1]

I watch this show often. Some of the segments are based on fraud (i.e. ID theft, mortgage fraud), as the victims (individuals or banks) did not do anything to try to get excessive returns, just sell their house or make a loan.

 

[frayne]

The program last night was about some offshore bank in Granada offering CDs paying a 250% annual return. They had a fancy brochure and said funds were insured by the IDIC (International Deposit Insurance Corp) of which there is none. Basically it was nothing more than a big Ponzi scheme that sucked a lot of so called smart people in for thousands of dollars.

 

[Spanky]

The program last night was about some offshore bank in Granada offering CDs paying a 250% annual return.

Sold - let me in.

 

[FANOFJESUS]

Can you watch it anywhere online?

 

[ERD50]

The program last night was about some offshore bank in Granada offering CDs paying a 250% annual return.

That isn't greed - that is stupidity, or maybe just ignorance.

Wait - are you talking about the greed of the people seeking these returns, or the greed of the people offering the scam? I see them both as 'greedy'. You can't cheat an honest man?

Greed has to be one of the major obstacles to FIRE for some people.

And maybe the major pathway also? I wonder if the scammers will retire early (maybe to a prison)?

-ERD50

 

[frayne]

See case 2,
Conned in the Caribbean


News Headlines

 

[clifp]

I watch it pretty often. I try to take careful notes as I plot how to make my next fortune. Ponzi scheme seem so old fashion that I am looking for a more 21st century scam.

 

[avengerki]

I find offering to manage my coworkers retirement and taxable investment accounts for a small portion of there assets is a pretty good return for me. I get my money now and they are stuck with my bad investment choices until they decide otherwise.

Actually they keep asking me if I would manage their accounts and I tell them my plans are working for me but may not work for you and to due their own due diligence.

 

[traineeinvestor]

I watch it pretty often. I try to take careful notes as I plot how to make my next fortune. Ponzi scheme seem so old fashion that I am looking for a more 21st century scam.

No need to spend too much time on devising your scam. Ponzi's scheme has stood the test of time - it certainly worked for Madoff.

My favorite investment scam of all time goes back to the South Sea Bubble when a group of "creative" individuals raised money:

For carrying on an undertaking of great advantage; but nobody to know what it is.


And people actually put money into it: History House: The South Sea Bubble



​

 

[Gumby]

No need to spend too much time on devising your scam. Ponzi's scheme has stood the test of time - it certainly worked for Madoff.

My favorite investment scam of all time goes back to the South Sea Bubble when a group of "creative" individuals raised money:

For carrying on an undertaking of great advantage; but nobody to know what it is.


And people actually put money into it: History House: The South Sea Bubble



​

And, yet, somehow we never get any smarter.

Special-purpose acquisition company - Wikipedia, the free encyclopedia

 

[nphx]

I recall contemplating some Iceland CD's.

 

[audreyh1]

It's a really good program! I have been amazed how many of the scams are have a religious front or tap into religious organizations to find their victims. These, also, are usually offering unreasonable returns.

Audrey

 

[FANOFJESUS]

Answered my own question

http://www.hulu.com/search?query=American+Greed&st=0

 

[kcowan]

One thing that they all share is an overtone of
- too good to be true
- you are privileged to be offered this
- act now

I think it all started with the sale of swampland in southern Florida in the 60s. Then it branched out into timeshares.

 

[frayne]

One thing that they all share is an overtone of
- too good to be true
- you are privileged to be offered this
- act now

I think it all started with the sale of swampland in southern Florida in the 60s. Then it branched out into timeshares.

Three red flags that people just love to bite on, over and over and over again.

 

[dgoldenz]

I have this show set on my DVR....some interesting stories, makes you wonder how dumb some people really are though.

 

[Grizz]

Had a talk with friends about this show recently. General consensus was that if we were to pull a scam, that the easiest to be duped tended to be church congregations. No judgement on religious folk in particular, but somehow attaching your scam to religion allows it to "fly under the radar" in a lot of cases. As evidenced by the show, investors just seem less likely to examine it closely.

 

[BigNick]

Had a talk with friends about this show recently. General consensus was that if we were to pull a scam, that the easiest to be duped tended to be church congregations. No judgement on religious folk in particular, but somehow attaching your scam to religion allows it to "fly under the radar" in a lot of cases. As evidenced by the show, investors just seem less likely to examine it closely.

I don't think this is surprising at all.

A member of a religious congregation is pretty much by definition demonstrating, in public, that they believe in something which sounds amazing, promises an extraordinary reward, and for which no concrete, first-hand, would-hold-up-in-a-court-of-law, physical evidence is available. (I'm trying not be disrespectful here; my BiL who is very mainstream religious tells me that he is happy to accept the above definition, but it may not be to everyone's taste.)

If I were going to scam people, those folks would be first on my target list.

 

[Gumby]

Affinity fraud is successful because of one common human trait -- we want to believe that others in "our" group are trustworthy and will not harm us. It is extremely tiring to be suspicious 100% of the time and most people want the psychological comfort that comes from being able to let down our barriers and relax. Affinity fraud affects all groups where people think they have a common bond and shared interest. Religious people are not any more credulous than any other group in this respect. Shared employment, social activities, ethnicity or country of origin are also common bonds exploited by affinity fraudsters.

 

[BigNick]

Shared employment, social activities, ethnicity or country of origin are also common bonds exploited by affinity fraudsters.

One of the more unusual "advance fee fraud" e-mails which I've received claimed to have been from a US Marines Captain, based in Afghanistan. His unit had discovered $20 million of the Taliban's gold and for some reasons, despite being in the US Marines and all, needed the help of this particular civilian to get the gold out of the country. He was prepared to pay me 10%, but he made it sound like it was my patriotic duty to do it anyway.

 

[bolt]

Consider too how YOU too as a tax payer are duped out of your tax money by the .gov and its tight policies on its medicare fraud as I saw on that show. the penealites,.......slight if at all.

 

[ziggy29]

Affinity fraud affects all groups where people think they have a common bond and shared interest. Religious people are not any more credulous than any other group in this respect. Shared employment, social activities, ethnicity or country of origin are also common bonds exploited by affinity fraudsters.

I'm reminded by this every time I'm called by various charities claiming to be affiliated to or aligned with police and fire organizations.

But these groups usually eat 80-90% of your donation in fund raising expenses, including the employment of professional high-pressure sales people soliciting funds. Most legitimate police charities really hate these guys just as legitimate religious charities hate it when scam artists hiding behind religion do it, as it undermines trust in not only the legitimate charities doing work under those banners, but can make some people distrustful of the institution itself.

My wife (early in our marriage) once pledged $50 to an "affinity" charity tying itself to fire departments -- when we got the "bill" a couple days later I saw the fine print and saw that only $6 was going to the actual works and the rest was fundraising and administrative. We didn't return the envelope and they went away after calling once a few weeks later wondering where our donation was. (We assuaged the guilt by giving $20 directly to a much more reputable local firefighters charity. We saved a lot of money and three times as much went to actual good works.)

All it takes is an entity that a lot of people trust and someone will misuse it to prey on unsuspecting donors.