Rich Enough? by Mary Holm

Author:Mary Holm
Language: eng
Format: epub
Publisher: HarperCollins
Published: 2018-10-12T00:00:00+00:00

Other tips

1 The early bird gets the bucks

Affinity fraud isn’t the only situation where the first people in the investment do really well. In Ponzi schemes, the early investors think they’re getting high returns and tell others about the scheme. In fact, their ‘returns’ are partly or fully made up of the money later investors put in – after the promoters have creamed off their take. In the end, the music stops, and more recent investors get off the roundabout with little or nothing.

While Ponzi schemes are illegal, pyramid schemes aren’t necessarily. In pyramid schemes, early investors or purchasers are rewarded for recruiting others – we’ll call the new recruits the second tier. Then the second tier recruit more people to make up the third tier, and the first and second tiers are rewarded for that. Then the third tier recruits more people, and the first, second and third tiers are rewarded. And on and on it goes.

The top-tier people make a lot of money, and the second tier also does pretty well. But by the time you get down a few tiers, there’s not much to go around.

I don’t like the way these schemes work. I suggest you give a miss to any scheme in which you are expected to recruit others.

2 Trouble in your inbox

Surely everyone knows about this stuff by now. But apparently not. If something enticing comes in by email, look closely at the sender’s address. And if you’re redirected to a website, look closely at the actual URL to confirm it’s legitimate. Scammers often use names that look very like legitimate names. If you have any doubts, phone the organisation, using a phone number you got from somewhere other than the website. Better still, just give any email offer a miss.

3 Take care with your personal info

The 2018 scandal with Facebook has made everyone more wary about what personal information they put online. But still, we can let info slip without realising it – even in phone calls. Somebody might ‘innocently’ ask if you have a cat or a dog, and if so what’s its name. Or they say, ‘I think my mum went to school with your mum. What was her maiden name?’ And they’ve got part of your password!

You can be caught out, too, if you’ve been asleep. I heard of a man who was woken by a 6 am phone call. ‘I’m calling from Visa,’ said the voice. ‘Someone is using your credit card in Turkey. I just need you to verify your details.’ The drowsy man said too much before he had a chance to think about what he was doing.

4 Suspicious?

Do an internet search on the business name coupled with the words ‘scam’ or ‘review’. If you find damaging information on the company, obviously give it a miss. But if you find only good info, that doesn’t necessarily mean all is well.

Two websites you can rely on are run by Consumer Affairs and the Financial Markets Authority. On www.consumeraffairs.govt.nz, click on Scamwatch.

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