CAN YOU BE FOOLED? Part 1: Con Men

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CAN YOU BE FOOLED? Part 1: Con Men

Do you know how to spot a con man?  If you can't, the money he loses may be your own.   

You cannot tell whether or not someone is a con man by using your great judgment of human nature.  If a con man is good, he will have the ability to get most people to like him.  The best salesmen sell themselves first, and the best con men will charm you right off your feet.  Con men need your trust, and they know that the average person will trust people they like, and distrust people they don't like.  A con man who is not likable is not a very good con man.  

A con man will not necessarily look and act like a traveling carnie.  A good con man must not only be likable, but people must trust him implicitly.  The tout screaming like a carnival barker on his complimentary selection phone may be a con man, but if he is, he is not a very good one.  Those who can be spotted instantly as con men are poor con men.  The best con men are the ones that you cannot easily recognize.  .  

Bernie Madoff is the consummate con man.  Everybody trusted him.  People didn't just like him, they adored him.  When he met you, he had the ability to disarm you completely.  He was so good, even the regulatory agencies that audited him every year were mesmerized.  Like any good magician, one of the key skills of a good con man is to charm people sufficiently that they don't look very carefully.  Bernie was so trustworthy that hedge fund managers whose job it is to do what is called "due diligence" by investigating investments, and two government regulatory agencies, never looked.   

Being difficult to spot, however, is not the same as being impossible to spot. As that famous carnie, PT Barnum, said, "You can't fool all of the people all of the time."  There are ways to spot a con man, no matter how good he may be.  For your financial well being, you need to become one of those people who can't be fooled.  That doesn't mean you should be like those women in colonial Salem who ran around pointing their fingers and screaming, "witch," at everyone. Those who do that will cost themselves as much in lost opportunity as the person who trusts everybody loses by trusting the wrong people.   You need to learn how to recognize a con and a con man when you see one, and to recognize honesty and sincerity when you see it.  .  .

The job ahead will be difficult.  The difficulty in teaching people to recognize a con man doesn't lie in imparting the knowledge.  The greatest difficulty lies in getting people to listen.  No one likes to think that they can be fooled, or to admit that they have been fooled.  If Bernie Madoff hadn't confessed to running a Ponzie scheme, he would still be operating it.  If some outside agency came in and accused Bernie, there would be people outraged at the agency for besmirching the reputation of that wonderful Bernie Madoff.  There were several people who notified the SEC.  One guy made getting Bernie his life's work.  He cited chapter and verse to the regulators.  The SEC ignored him. Why? Because, like anyone else, the government investigators hate to admit they've been fooled.  

Remember the special done on sports service scams by Bryant Gumble on HBO?  They interviewed an actual client of Jack Price.  They showed this client everything they found out about Jack Price's sports service.  None of that mattered.  The guy insisted that Jack Price could pick a winner whenever he chose, and had inside information about the games  The client believed that the only reason he lost with Jack's picks was because he didn't pay enough and Jack didn't want to give him the right information.  In the face of all evidence to the contrary, this client insisted that all he had to do was get enough money together to pay Jack in order to get the "real" information.

Other people seem to want to be fooled.  Someone phoned me a few years ago inquiring about Crowne Club membership.  When he came on board, I told him that once he was a member, he would get everything that I put out.  He replied, "I know you guys get special information, I just want you to know if you get anything, I'm willing to pay whatever it costs for it."  The guy was actually asking to be conned.  Some people in this business would call me crazy, but I reiterated that if I ever got any "special" information he would get it as part of the Club, and there would no extra charge.  "Okay," he said, "I just wanted you to know."

When his month was up and it came time for him to renew, he called to say he wasn't renewing because I never "gave him a shot" at my "special" games.  I tried to explain to him the "special game" con.  He didn't care.  He hung up and did not renew because I hadn't conned him.

Finally, there are those who know they are being scammed, but will fight for the scam to continue because, although the game is dishonest, it is "the only game in town."   

People love to believe in magic, and they hate the person who tells them there is no tooth fairy.  As I expose the various scams, many of you will look around and suddenly realize you have been fooled.  Many will want to go into denial.  Try to keep an open mind.  If you don't, as I said at the start, the money the con man loses may be your own.  

In subsequent articles we will discuss the signs and tells that will allow you to spot a con, and we will expose the tricks of the trade and how they work.  

  • Yes.  The good con men are often recommended by friends and relatives.  They are that likable.  In fairness, it was not easy to check Bernie out.  Many people did rely on the regulatory agencies.  That is supposedly why they are there.  Unfortunately the securities regulators were doing their best imitation of some of the sports monitors or the Better Business Bureau.  See no evil, hear no evil (unless of course you don't pay them.)  

  • Madoff was helped also by people recommending him to friends and family......most of us (unfortunately) will not dig as deep on someone if a friend or relative backs them up.

    it is amazing how easily people will turn over hard earned money to advisers , yet will spend hours or days checking out a washing machine before buying it, or any other everyday item.