Money, Explained: Scams

Question 1

Who is general Gregor MacGregor?

Answer 1

General Gregor MacGregor (24 December 1786 – 4 December 1845) was a Scottish soldier, adventurer, and confidence trickster who attempted from 1821 to 1837 to draw British and French investors and settlers to “Poyais”, a fictional Central American territory that he claimed to rule as “Cazique”.

Question 2

How much did Gregor MacGregor make?

Answer 2

The tactics worked precisely as anticipated. They were beyond successful. Not only did MacGregor raise £200,000 directly – the bond market value over his life ran to £1.3 million, or about £3.6 billion today – but he convinced seven ships’ worth of eager settlers to make their way across the Atlantic

Question 3

Is Poyais a country?

Answer 3

Is Poyais a country?
The myriad Poyais advertisements that circulated through Britain had promised fertile land, rivers stocked with fish, and forests teeming with deer. But as Hastie and the others soon discovered, Poyais was not a country at all. It was one of the most elaborate — and deadliest — frauds in history.

Question 4

Are we wired to trust?

Answer 4

Recent neuroscientific research shows that in many ways our brains are hardwired to trust others. This aspect of our human nature is one reason that having your trust betrayed can short-circuit your neurobiology and make it difficult to trust again.

Question 5

How does an advance fee scam work?

Answer 5

Advance fee frauds ask investors to pay a fee up front – in advance of receiving any proceeds, money, stock, or warrants – in order for the deal to go through. The advance payment may be described as a fee, tax, commission, or incidental expense that will be repaid later.

Question 6

How did the Nigerian prince scam work?

Answer 6

Essentially, someone claims to be in a position of influence or notoriety and needs to get a large sum of money out of their country. They can only do it with your assistance. In return, you’ll get a large piece of the pie. This remains an incredibly popular scam, garnering over $700,000 a year.

Question 7

How does a pump and dump scheme work?

Answer 7

In a pump and dump scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock and then “dump” shares of the stock by selling their own shares at the inflated price.

Question 8

Is crypto currency a good investment?

Answer 8

Investing in crypto assets is risky, but can be a good investment if you do it properly and as part of a diversified portfolio. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency.

Question 9

What was the Charles Ponzi scheme?

Answer 9

Charles Ponzi is the namesake for the Ponzi scheme, sometimes referred to as the “Rob Peter to pay Paul” scheme in use for many years before Ponzi employed it. The Ponzi scheme, which involves paying off early investors with proceeds from later investors, typically collapses when no more new investors can be attracted.

Question 10

Ponzi scheme

Answer 10

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

Question 11

What exactly did Bernie Madoff do?

Answer 11

Bernie Madoff is famous for operating probably the largest Ponzi scheme in history. It’s estimated that Madoff’s fraud extended for more than 20 years and ran to over $50 billion. Madoff was arrested in 2008 and eventually sentenced to 150 years in prison.

Question 12

What is a pyramid scheme?

Answer 12

A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products.

Question 13

What is a MLM?

Answer 13

Multi-level Marketing (MLM) or network marketing, is individuals selling products to the public - often by word of mouth and direct sales. The main idea behind the MLM strategy is to promote maximum number of distributors for the product and exponentially increase the sales force.

Question 14

What is a coaching scheme?

Answer 14

In this type of scheme, the promoters typically claim you can make big money with little or no experience. They say their “experts” will teach you a “proven method” for building a successful business on the Internet.

Question 15

Who is vulnerable to scams?

Answer 15

Self-confidence is one factor that causes people to fall for scams. People of any age who believe they are too smart or well-informed to be tricked are very likely to become victims, especially today when technology is used in many scams

Question 16

What kind of people are susceptible to scams?

Answer 16

Individual differences in mental abilities linked with susceptibility to scammers include the following: Higher levels of impulsivity (low self-control) and risk-taking, lower levels of general cognitive ability, and possibly lower levels of emotional intelligence.

Question 17

Why are some people susceptible to scams?

Answer 17

The NPSS also cited traits such as compliance, low self-esteem and complacency. It noted that “victims, especially repeat victims, experienced higher levels of stress which may have put them in a more vulnerable emotional state, and hence a greater risk of being susceptible to scams”.

Question 18

How common do people get scammed?

Answer 18

In the US, one in ten adults will fall victim to a scam or fraud every year. 1.3 million children have their identities stolen every year. You are more likely to become a victim of identity fraud by having your wallet snatched than you are via online fraud. When it comes to victims of doorstep fraud, 85% are over 65

Question 19

Are men or women more likely to get scammed?

Answer 19

Men lose more than twice as much money to scammers than women, new research reveals.

Question 20

What is OneCoin?

Answer 20

OneCoin is a fraudulent cryptocurrency scheme[1][2] conducted by offshore companies OneCoin Ltd, based in Bulgaria and[3] registered in Dubai, and OneLife Network Ltd (registered in Belize), both founded by Ruja Ignatova in concert with Sebastian Greenwood.[4] OneCoin is considered a Ponzi scheme due to its organisational structure of paying early investors using money obtained from newer ones.

Question 21

How many cyber crimes go unreported?

Answer 21

The World Economic Forum (WEF) has highlighted that a significant proportion of cybercrime goes undetected. The Department of Justice (DOJ) has recently been more specific: one in seven cyber crimes are reported, which means over 85% of cybercrime is left hidden in an organization.

Question 22

What is puffery?

Answer 22

“Puffery” generally refers to: Exaggerated advertising, blustering, and boasting on which no reasonable buyer is likely to rely. A general claim of superiority that is so vague or incapable of being objectively proven or disproven that it is most likely to be understood as a mere expression of opinion.

Question 23

Are mlms worth it?

Answer 23

Most people who join legitimate MLMs make little or no money. Some of them lose money. In some cases, people believe they’ve joined a legitimate MLM, but it turns out to be an illegal pyramid scheme that steals everything they invest and leaves them deeply in debt.