One problem with scams is they are very profitable. And if a scam isn’t stopped early on, it can become a force in the marketplace. Behind me is a graph, and we have the start of a scam. And then, as the scam is perpetrated, it experiences a high rate of growth. And this is because scams are profitable. And as the scam continues on, it is met with resistance. Now, these initial bands of resistance are on the lighter side. So think of bad reviews, negative comments on social media and customer complaints, etc. But as the scam affects more and m more people, the bands of resistance grow larger and larger until we get to this very large band of resistance that may include negative mainstream media coverage, class action lawsuits, and potential scrutiny from regulatory agencies. But if the scam can move past this large band of resistance, it can move into the seemingly legitimate side of this graph. And that’s what a scam ultimately wants to do. If it grows to really make money, the scam has to become seemingly legitimate. So that’s where the scam wants to be.
But now, let’s define what exactly a scam is. Per Merriam Webster’s dictionary, a scam is a fraudulent or deceptive act or operation. And, of course, there are many different types of scams. Some I have listed on the whiteboard include pyramid schemes, ponzi schemes, products or services with false claims, products or services with deceptive claims, investment scams, companies with unethical business practices. And sometimes scams may include multilevel marketing schemes. And note that multilevel marketing schemes are technically legal. But we know a number of scams have arisen from MLMs, also with unethical business practices. One, example is if we have a product with a money back guarantee, customer is unsatisfied, they seek out the money back guarantee, and they are not given their money back. That would be a scam. and then note that the difference between a pyramid scheme and an MLM is that with a pyramid scheme, the focus is on recruitment. With an MLM, the focus is on selling a product or service. Also, I want to differentiate scams from ripoffs. So ripoffs are really bad values, and the line between a ripoff and a scam can be blurred. But I want to give you an example of a rip off. So, a ripoff could be, a guru’s real estate seminar that costs $12,000 to attend. And then you attend the seminar, and all it really is is general information and hype, and then they are selling you on the next more expensive seminar, that would be more considered a rip off than a scam. But again, the lines can be blurred. But I, wanted to make that distinction.
Okay, so now let’s talk about some commonalities amongst scams. And it’s going to depend on the type of scam. But some of the commonalities include, that the scam is something new. So it’s something new, it’s something different. It may be some new type of technology, it may be some different way to do an existing thing or existing service, et cetera. But the key here is we have something new. It’s often labeled as incredible, unbelievable, unreal, innovative, any number of superlatives. What we also see is the word opportunity used. And so opportunity is going to come about with investment schemes. It’s going to come about with participation schemes. You will be given the opportunity to do something. So the word opportunity is weaponized because opportunity is thought of as a good thing. But here we have an opportunity to be a part of a scam, to invest into a scam, to buy into a scam, etc. What, is common amongst all scams is that they are unstable. And this is because there is no foundation of value. So they are a scam. There is no value here. So it will always lead to instability.
another common trait is that the close of the scam will always be hurried. So when I say close, the push to sell you, the push for you to make an investment, the push for you to commit to sign a contract, et cetera, it will always be faster paced. It will always be rushed. There will be a Hurry. And this is because the perpetrators of the scam want you to make a fast decision, an emotional decision, where you go with all of the momentum that they are surrounding you with. So that will be very important. And that is common amongst almost all of the scams. All right, so, moving on.
some more common characteristics here. And this is more in the perpetration of the scam or more of the feel of the exam. And one of the ways that a scam will come across as inorganic or inauthentic or disingenuous, this is because they cannot be genuine about what they are selling. Because if they were, then you would know it’s a scam. You will also experience a diverted focus. And, when I say diverted focus, the perpetrators of a scam know that there are certain things that their audience, their prospects have in mind. Namely, they want to know what it is that they are buying into. So, because it is a scam. They will not tell you outright that it is a scam. They will not address the fundamentals. What they will do is they will tell you what it does. And so this may come in another form, but the key here is that scam perpetrators always want to transition away from the actual fundamentals and to something else that is adjacent, related, but doesn’t actually get to the merits of their investment, product, or service, etc. They will also address the bad reviews. And what they will do is they will dismiss the bad reviews. They will say that the person leaving the review didn’t understand, didn’t give them a chance. It was a competitor, it was a hater, they were jealous, et cetera. So they won’t get upset about the bad reviews. They will try to downplay them and dismiss them. That’s what will happen here. And then you will also see, commonly, a focus in on positivity. Why the focus in on positivity? Because scams are not positive. So they will do something like, say, this is a negative free zone, or we are only focused on positive people. We only want to focus on the optimistic side, et cetera. That is because they can lose the discussion that their product, service, investment, et cetera, is a scam. That way they can leave that talk elsewhere, because that is negative talk. That’s because a scam is negative. People lose money, they lose time, they damage relationships. These are all negative things. And that’s why you see a focus on the positive, because we’ve got to keep everything positive, because if you found out what it is we are actually doing, it would be quite negative. So there is always a focus on the positive. And of course, many people actually embrace this because they want to have a positive life. They want to have positive things in their life. They like an optimistic point of view, et cetera. So many people go along with this, but it’s to their detriment, because in this case, they are misaligned with reality, and they do not understand the fundamentals of the scam.
Okay, so scams always want to come across as credible. They seek out credibility desperately because this is what they do not have. So what are some of the ways that scams seek out credibility? Well, it can come through endorsements. So celebrity and athlete endorsements, entertainer endorsements. They also seek to have ties with authorities. So it could be doctors, attorneys, or some other kind of professionals or experts. they may seek out associations. So association with associations or institutions. They want ties to all of these entities that already have established credibility and notoriety. Because they need that credibility to really put a seal of approval on their scams. You will also see the scams take up, philanthropy and social causes. And this is because they want a feel good appearance. They want a feel good aura about their product, service, brand, company. And by engaging in philanthropy, it will have a better feel to what they are doing. And it’s more likely that people will go along with their cause, and people will think, well, if you’re donating $1 million to this charity, you have to be doing something right, but it’s really just a cost of doing business. Let’s say the scam is making $350,000,000 a year. They don’t mind donating a few million dollars to make their scam appear seemingly legitimate. There may also be awards. So the scam could be giving out the awards. They may be receiving the awards. The awards may be made up. It may be given by a council that was completely created by the scam itself. And again, that goes back to the inorganic part that I mentioned previously. Also, marketing is a big part of scams. It’s so important for them to market and market the right way, because they need people to believe that they are the real deal, that they are legitimate even when they are not. And so there are any number of ways that they confuse the issue with marketing. But one really deceptive and tricky one is when they start to partner or engage with media outlets, especially trusted media outlets. And there is an agreement where the media outlet will cover the scam. Let’s say it’s the product, and they will seemingly address it, both the positive, the pros and the cons of the product. But ultimately, it will be wrapped up favorably for the scam so that the scam can continue on. Of course, the media is influenced, and they are compromised because they are receiving compensation by the product to promote it. So that’s essentially what happens. Other times, this will be an open, sponsored editorial, etc. But the key here is that there is marketing in place. They want to have advertisements. They want to be a household name as much as possible, recognized and known as much as possible, because the more they are known, the more people think this is too big to actually be a scam. Also, you will see affiliates, and referral partners become a part of the scam. And that’s really crucial here, because you have all of these different people that are seemingly promoting the product. but again, it will be inorganic, just as the reviews and testimonials will be. If you examine the reviews and testimonials they will almost always come from people who are participating in the scam or who are being compensated directly or indirectly by the scam. So, for example, if we just look to, let’s say, a doctor endorsement, did the doctor receive compensation for endorsing the product? The answer is going to be almost always yes. And this is, again, because these are all campaigns, these are marketing campaigns to make the product, service, investment, business, company, et cetera, appear to be legitimate.
So as we continue on, ultimately, we keep building upon this fraud foundation, right? So we have all of these different things on top of the foundation to make it look nice. Think about a home. When you’re building a home, you can have a really nice looking home. But if the foundation is cracked, it will always have problems. So what they are doing is they are making the appearance of the home look very nice with all of these different things. And we’re borrowing credibility from all of these people. Why would this very famous celebrity endorse our product if it was a scam, et cetera? So they build upon this foundation. But where the scam can start to turn a corner is where they keep generating profits. And if they get past this large resistance band, if they start taking this money and they start rebuilding and repairing their foundation, they can start to turn a corner. And so here we will see the messaging change. Because originally we had these incredible claims, and they were lies and it was a fraud, but we had these incredible, fantastic claims. But then, over time, as the scam seeks to become more and more legitimate, you will notice the messaging change to be smoother and to engage more in puffery. And so puffery is where we’re not making specific claims that we can be tied down to, but it’s really like we’re the best in the universe, or our product is amazing. And other superlatives that have no ties to actual, tangible, evidence of fact. And it’s more just like a, superlative. It’s more just like an amazing claim, but it’s not anything that is rooted into something where we can actually break it down, such as an ingredient list, et cetera. So that’s what will happen, is, over time, the messaging will change, and it will smooth into less fantastic claims so that the scam can become more and more legitimate and move into the seemingly legitimate side of the graph.
And then also, we may see a replacement on some of the scam fundamentals. And so, more and more, the scam will seek to rebuild, or repair their foundation by taking their profits and reinvesting them into this initial scam product or scam investment or scam service, et cetera. And so they are hoping that they can turn the corner and go into seeming legitimacy. And the reason I keep saying seeming is because the foundation usually doesn’t completely repair. And this is very difficult to pull off, because when you have a foundation, it usually stays that way. But because a scheme is so profitable, they may be able to take this profit and use it to repair part of the foundation. And if they can do that again, they can keep moving into this seeming legitimacy. So ultimately, what this comes down to is that scams can become profitable or are profitable. And if they continue to grow, and if they can move past their initial resistance bands, they can move into seeming legitimacy. Once they do that, they have these profits that they can capture. And if they want to continue on, they can take their momentum, they can take their growth. They can take all of the equity that they’ve built from their brand, their notoriety, all of these ties, and they can start to work on all of the problems that they were originally founded upon.