Gullibility Part 2: How to spot spin, lousy explanations, dodges and evasive excuses. Question those scams!
Did this ever happen to you?
You were reading some news of how someone got scammed and lost a big chunk of money. You read how the scam was perpetrated, how the victim fell for it line, hook, and sinker, and lost a fortune due to the betrayal of trust. And your reaction was, "That was so obvious! How could any one fall for this sort of scam?"
In my previous hub in this series, I've explained how people are gullible, and thus fall for scams, and how can one correct it. The most important thing is admit you don't know enough and start asking questions. [ For what questions to ask, see my guide on the "Crap Tests" to test whether the information you got is crap info. ]
In this hub, I will explain how to spot bogus explanations offered up by scammers when you start to ask questions they don't really want to answer, as well as spot misleading and evasive information.
The basic test: whatever they present (explanation, hypothesis, theory, position), is it supported by evidence? Does it make sense? Is evidence real or another unverified theory but presented as if it's real evidence?
Appeal to Emotion is a red flag
A lot of scammers use emotional appeal to overwhelm the logic side of your brain to get you to commit to the scam. In a financial scam, the most often used emotion is greed, though some combination appeals are out there.
- A sweetheart scam, for example, appeals to your desire for companionship / relationship to get you to open your wallet.
- A mystery shopper scam, for another example, appeals to your desire of free shopping money (greed) and helpful nature (help out your "contact" lest she loses her job)
Spotting such emotional pleas is not difficult if you watch out for such signs while staying objective:
- ALL CAPS ("DO YOU WANT FINANCIAL FREEDOM?")
- EXCLAMATION MARKS!!!!!!!!!!!
- Fear mongering, alarmist view ("Did you know that _____ contains bad stuff _____?!?!!!!!!!!!")
- A dare ("Why don't you join us and see for yourself?")
- Short and catchy slogan ("The Power of Now / Less / One / Us / etc.")
- Wild and unsupported projections ("This company will add 10 million users per month!")
- Blanket denial ("You don't know what you're talking about! _____ is legit!")
- Reference to some sort of a conspiracy against whatever cause s/he is advocating
- Wild accusations ("You must work for a competitor to say bad things about _____!")
- Don't let emotional appeal derail your attempt to get more information with questions
- Watch for emotional speech cues, such as dare, denial, wild claims, wild accusations, ALL CAPS, and so on
Hiding behind "confidentiality" or "complexity" is a red flag
Ponzi scheme operators are fond of the word "confidentiality" or "complexity", as they can hide behind it and claim they don't have to tell you anything, and it sort of makes sense, if you don't look at it too closely.
Bernard Madoff was famously quoted in an interview, when asked about why does he encourage his clients to keep putting in more money, if the investments are doing well,
When Bernard Madoff's Ponzi scheme was finally laid bare to the public to see, it was clear he was hiding things all along, and the above explanation of "complexity" is simply an attempt at evasion. Common variations on this scheme includes "You just don't understand us" and "you have to join then I can show you."
Other Ponzi scheme operators have followed suit in claiming complexity and confidentiality. In a very recent case in Canada, a victim / collaborator of Ponzi scheme operator was quoted saying:
“I asked her if I could talk to someone at Mark Anthony Group and see if I could verify the structure of the investment,” he told the panel.
“She indicated to me, basically, it’s very confidential information – She told me she had consulted a lawyer and she did not require any disclosures or memorandums.”
If the explanation sort of makes sense, but doesn't tell you anything new, it's a bogus explanation. A new "better" explanation needs to explain things better.
When you ask "How does ______ work?" You should get an explanation or "I don't know". If you get "I can't tell you", whoever telling you that evasive answer is probably feeding you crap info unless s/he can explain why (then you have to evaluate whether that reason makes sense, or is it another evasion).
- Scammers love to hide behind "complexity" and "confidentiality"
- "It is too complex to understand" is one such excuse uttered by none other than Ponzi king Bernard Madoff
- It's also known as "You just don't understand us" and "join us then I'll show you."
- "The arrangement is confidential" is another such excuse often used by scammers to answer your inquiry with nothing.
Other sorts of evasive answers
Hiding behind "complexity" and "confidentiality" are special cases of "evasion", where the respond-er does not answer the question directly, but instead gave some other answer that does not offer any details, also known as an "evasive answer" or "non-responsive answer". Here are a couple other ways answer can be evasive:
Give an abstract / vague answer
One way to be evasive is to give an abstract answer devoid of details, and by giving a vague simile or comparison.
- "I was jogging for 5 miles" CLEAR
- "I was exercising". ABSTRACT (exercising how?)
- "I was working on the budget estimates." CLEAR
- "I was working." ABSTRACT (working on what?)
Give a vague comparison devoid of details
Another way to give an evasive answer is simply to give something LIKE the answer you want to give, but not the exact thing, without giving any hint on what's similar and what's different.
- "Company X is a social networking website for Asian American high-tech professionals..." CLEAR
- "Company X is like Facebook" VAGUE (how like Facebook?)
Give an unrelated answer / changing the subject
Another way to evade the question is to change the subject. One way is to answer the ancillary question instead of the primary question. Another method is to attack the questioner with various questions about qualifications, motives, and such.
- Q: Is company X a scam?
- A1: Company X is not a scam because of _____, ______, and ______. CLEAR
- A2: Company X is registered with _____ and ______. SEMI-RELATED ANSWER
Why is A2 "semi-related answer"? Because the question was whether the whole company is a scam, not whether the company is registered properly or not. However, A2 is "similar" to A1 that such a "dodge" is often overlooked. You need to watch for such "artful dodges" when done by a skilled dodger.
- One way scammers avoid the question is to be abstract
- Another way to evade the question is to give a comparison without explaining why this thing is similar or dissimilar to the "real" answer
- Yet another way to evade the question is by changing the subject, or a "dodge", but not so much to be a full evasion, but just enough to sound as if you've addressed the question, but did not.
Were the "common sense" questions answered?
Very often, scammers will evade the "common sense" questions by giving a misleading or otherwise evasive questions through a "dodge" answer that is somewhat related but not an exact answer to what was asked. Though often, they simply never even provide such answers as if nobody would ever ask the question. If whatever is being presented does not answer "common sense" questions, that is a big red flag.
When you join any business, you obviously want to know a) is it legal, b) is it going to last, c) who's behind it, d) how does it work, and e) will I make money with it. (I'm sure you may have more questions, but these five should be at or near the top of the list)
If a company answers b) "who's behind the company" with vague answer like "it was founded by several investors who has a history of entrepreneurship", or even more vague "a prestigious UK investment group", such a company cannot be trusted.
A new company with NO reputation behind it have to show a) innovative product or service and b) proven engineering / management to bring such product or service to market, as well as sufficient capital to do so. Why you make friends or date someone, you'd want to know all about him or her. Why would you not learn all you can about your new employer / business? And why would that employer business choose NOT to tell you when they need you as a member?
It's also possible that the company will simply not address the common-sense questions at all in their statements, forcing you to ask the tough questions. The very fact they chose to pretend those questions don't exist is significant. Either they are completely inept in ethics and marketing, or they are a scam. Neither of which is good for your future.
Furthermore, the reaction when the company / person responds to these "common sense" questions is also an indicator on how legitimate the opportunity is.
If they posted a clear and direct answer to the question, and put it on their FAQ so now all people can read the answer (admitting that they had somehow omitted the answer before), that's a GOOD sign for the company.
If they posted an evasive answer, or worse, attack the asker who raised these common sense questions, then they cannot be trusted.
- What are some "common sense" questions you would ask about this issue / company / opportunity, before you start reading?
- Were these questions answered clearly, vaguely / evasively, or not at all?
- Did any one else asked these questions? What did they find?
- What is the company / person's reaction when such questions are asked? Are they direct and clear, or evasive and defensive?
Just Because It Makes Some Sense Doesn't Mean It's the best explanation
Often, a bogus explanation relies on offering an alternate explanation for the facts that have surfaced.
For example, in a criminal trial, the defense will offer up an explanation that seems fits the facts the prosecution have presented, yet does NOT point to the defendant as the perpetrator. However, if such an explanation, or theory doesn't make sense, it is clearly bogus. Even if it makes sense, but have no evidence supporting it, it is also bogus.
In a recent case, a man claimed he did not download child porn to his computer... his cat did. He claimed that the cat jumped on the keyboard and child porn appeared. However, this explanation was not believed by police, who found over 1000 pictures of child porn on his computer. Would you believe that a cat, jumped on a keyboard and hit a few keys randomly, would cause your computer to download over 1000 child porn pictures? The explanation makes sense if you take it one bit at a time, but all together, it's so unlikely it's clearly bogus.
Merely having an alternate explanation is not enough. You also need evidence to prove such explanation or theory. Yet a lot of people is simply satisfied with merely an alternate theory or explanation, without evidence to support such.
Recently, a certain Internet marketing campaign generated a lot of buzz on the Internet without any viable products, and claimed to have signed up 1.5 million members even before it launched, merely by promising to share 50% of its profits. When questions are raised about the company, which has absolutely no history that can be traced, or have any sort of corporate officer that can be interviewed or checked, the company offered various explanations, none of which includes any additional facts.
When questioned about why the domain name was registered to a different company 3 months before launch, the company's official explanation was that the founder (unnamed) had the idea about the domain name and registered it under his own company first, then a company was formed to run this new business and domain transferred. While this explanation fits the available facts, it doesn't make sense because this new company formed has "Investments" in its name and it doesn't do any investment, and a new company formed should match this domain name, but does not. This new explanation doesn't fit all the evidence available. (EX: the company running Yahoo! is not called XYZ World Investing, but Yahoo Inc. )
Furthermore, it avoids the fundamental question: who runs this company? By addressing the details of the questions they managed to evade the real question. When coupled with the fact that the explanation they offered makes no logical sense, the answer is clearly bogus.
- any explanation needs to be backed up by evidence / proof
- the best explanation covers more evidence than other explanations
- If you ask for explanation on how something works, and gets back an explanation that is devoid of additional useful facts, it is probably bogus
- alternate explanation that raises addition questions, does not make sense in relation to other facts, and/or simply does not fit many facts, are probably bogus
One of the first step to avoid being gullible is to ask questions. However, merely asking questions is not enough. You also have to discern whether the answer you get back are useful, or merely evasions.
The various types of evasive answers have been explained. Such as appeal to emotion, evade through complexity, evade through confidentiality, evade through abstraction or vagueness, and evade via a 'dodge' by answering something only semi-related to the question.
Once you've determined that your attempt to obtain information to form your own view was being rebuffed, it would be time to do your own research, and that will be "Gullibility Part 3", next in the series.
More by this Author
- 6Why do people fall for believe Internet Scams, and once in, refuse to get out? What can you do to help them?
Why do people fall for scams and once in, stay in? I'll show you what cause people to be vulnerable, 3+1 stages of scam, how to spot scam and the crap info they spread, and 3 simple steps to avoid scams.
You can't trust reviews online, as they are often faked. However, scammers have gone even further, creating fake social proof for their scams. Learn how not to fall for such.
- 60Shocking Revelation: "Rich Dad" is Not Real, but a Myth Like Harry Potter. Robert Kiyosaki bluffed! Is There Poor Dad?
Robert Kiyosaki, the financial writer best known for "Rich Dad Poor Dad", is more of a philosopher and motivator than a financial adviser. Learn why his books should not be taken literally.
No comments yet.