Alaska editorials: Watch out for scams

Posted: Friday, December 30, 2005

This editorial first appeared in the Anchorage Daily News:

Scam artists are many things: Heartless, greedy, selfish and shameless.

They also are persuasive, as some elderly Alaskans have discovered.

Reports of scammers victimizing the elderly have been making the rounds. So much so that the Murkowski administration is mailing out 47,000 brochures that straightforwardly explain the con man's various games to Alaskans 64 and older. Mailing begins today.

How do you spot a con game? Rule No. 1 is forever true: When a total stranger offers you thousands of dollars if you invest in his sure thing, he's a scam artist.

The variations on this theme are endless. From Nigerian bank scams to real estate in the American Southwest, to oil futures and foreign lotteries you won though you can't recall buying a ticket, the scammer has a perpetual story about big money easily made - if you will just write him a check (or provide access to your bank account).

A recent Nigerian bank scam informs targets that they may own a percentage of the late Alaska leader Morris Thompson's estate. All the sucker has to do is pony up a few thousand dollars and untold riches will appear.

This approach relies on the mark's naiveté - or greed. But the scammer is nothing if not diverse. His other tools include disguising himself as an agent of the government and insisting the mark must participate in a government program; offering inducements of "free samples," "free vacations" or "bonuses"; bait and switch in which a valuable reward is promised and nothing of value delivered; appeals to patriotism and civic duty. And there's always old reliable: the Ponzi scheme.

The Ponzi scheme has been luring gullible investors for more than 80 years. Named for Boston con man Charles Ponzi, the scheme combines simplicity with the lure of huge returns by promising investors double their money (or better) in days or weeks. At first, the schemers pay the investors who, now elated, tell their friends and neighbors about the sure thing. Then the new investors - and early investors who have reinvested - are bilked as the schemers dissolve the business or disappear. (Or are exposed, as Ponzi was, and wind up in jail.)

It may seem like a cliche, but it's also true that the best defense against scammers is an informed public that is careful with its money. Unfortunately, this message must be repeated again and again because scammers are relentless and some members of the public continue to bite no matter how ridiculous the premise of the scam (for instance, you give me unfettered access to your bank account and I promise you $40 million now somewhere in Nigeria).

The Christmas season is a time for giving, but Alaskans should beware of giving to strangers making big promises.

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