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doctorpot1 joined discussion · Mar 11, 2023 10:48

How not to fall into a scam: Keep your money to yourself. Never ever send money to "your friend" that you never met before. Better yet, never ever send money to any friend.

Recently, someone lost all of his savings to scammers lurking in Moo Moo. The mooer shared his story with me so that we can get this warning out to all Moo Moo users to prevent someone else from falling victim into such scams. After hearing the story, we had worked with @Moomoo Lily to try and stop the scammers and save as many potential victims as possible. Moo Moo also made a post to warn Mooers about such scams.
Moomoo Lily: Moo Social: Beware of Spam and Scams
Please share the post by @Moomoo Lily around so that together we can help prevent any more person to fall into such scams.
The scam business
Scammers will keep finding new and innovating way to try and scam us, and that is because it is such a big business. In Singapore alone, Scam victims in Singapore lost $660.7m in 2022; more than half of them were young adults. In the U.S. Americans Lost Record-Breaking $8.8 Billion to Scams in 2022. In 2021, $77b is lost to scams worldwide in 2021 – up 16% from previous year. That is how big the "market" for scamming is.
$77 billion in "revenue" and growing. Let's compare it with some huge global companies so we can understand the scale of this evil business. $Alphabet-A (GOOGL.US)$ made $77b last quarter. $Disney (DIS.US)$ and $Tesla (TSLA.US)$ made $80+b last year. $Nike (NKE.US)$ and $Coca-Cola (KO.US)$ make $40+b a year, $Starbucks (SBUX.US)$, $Netflix (NFLX.US)$ and $3M (MMM.US)$ only made $30+b a year.
Like it or not, scammers will keep scamming because there is money to be made. Regulators and police have little power against them, so they will keep on doing it. It will only stop, when we stop "giving them business". When we keep our money to ourselves, and stop giving it to strangers with no faces.
So here are some things we can think about to avoid falling into a scam
If it sounds too good to be true, it is almost guaranteed a scam
1. If the God of investing can't do it, what are the chances that a random person can, and come tell us about it?
The number 1 in the investment world, the God of investing, only gets an average of 20% in returns per year (and he is losing money in a bear market), so what make us so sure that the person we are talking to can beat the number 1? How many people in this world can really beat the number 1?
Even if they can, why will they bend over backwards to tell us about it? We are just a random stranger. Have you ever seen Warren Buffett contacting any of us to tell us how to make money? Have you ever seen Warren Buffett pay money for ads, so that he can tell us how to make money? No, because it doesn't make sense.
Let's think about it, if you can beat Warren Buffett, will you go to the street and tell strangers about it? or would you keep it to yourself and earn all the money for yourself (be it by doing it yourself, or sell it to a hedge fund, or work for one and get profit sharing)?
So the chance of someone beating the number 1 is already so small. Multiply that by the chance that the person get to meet us out of billions of people in the world. Multiply that by the chance that the genius is crazy enough to share his secret to a COMPLETE STANGER. Well the chances is almost impossible.
2. No one will share ways that are guarantee to make money, because the more people do it, the less money there is
If there is a 100% guaranteed way to earn money, no one will share it with us. Period.
Even t-bills that all these YouTubers are sharing is NOT 100% guaranteed to make money. Government can default, and many had defaulted before. So it is not 100% guaranteed.
On top of that, have you experience that the t-bill yield isn't as good as expected, even though interest rate is going higher and higher? Well that is because the more people know about it, the more competition there is, and everyone undercuts everyone so yield gets lower, so everyone buying loses a little.
Think about it. If you found a gold mine, will you run up to strangers to tell everyone about it, so everyone can go snatch the gold? Probably not right? You would either keep it a secret and mine all the gold yourself, or sell the mine to someone, or hire miners to mine it. No one of the right mind will tell anyone about it for free.
3. Keep abreast of scam
As the scammers evolves, we need to keep ourselves updated on new scams from reliable sources, such as Plain Bagel (a real financial advisor) or Coffeezilla (an investigative journalist). They had reported many crypto scams before, even big one like FTX a few months before their collapse (Crypto CEO Accidentally Describes Ponzi Scheme).
We can just Google the word scams and you will have access to many resources of new scam techniques. Even ChatGPT are used in scams now: Darktrace warns of rise in AI-enhanced scams since ChatGPT release.
If all else fails just follow this rule of thumb
If there are too many things to take note of and we do not have the time to do so, just follow this simple method so that we will not fall into a scam:
Keep your money to yourself
If a stranger comes talk to us, keep our wallet shut tight. Never ever send money to that person.
If we have never ever seen the person face-to-face in real life before, never send money to that person as they don't exist. We could be talking to ChatGPT and don't even know it.
Even if we had video calls with the person before, never send money to that person. That person could be video calling many people at the same time. It could be a deep fake.
Even if the person is our friend, it might be wise to never send or lend money to our friend too. When our friend borrow money from us, there is no guarantee that they will return us the money. Their account could have been hacked and a scammer took over. They might be friend with bad habit that does not want to return money to us, but are willing to buy new phones. They might have a bad gambling or financial management habits.
If I have to lend money to my friend, I have this rule. I will set a maximum loan amount that I will lend to them, the total loan will not go above that amount. I will only lend them once, and never lend them again unless they return the money. If they do not want to return me my money, I'll treat it as spending money to weed out bad friend out of my life.
If you want to lend money to a friend, be prepared to lose both your money and your friend.
So, as long as we keep our money to ourselves, it is hard for us to get scammed.
How Moo Moo can improve
Hope that Moo Moo's Product Managers @taddy @MooPM_taddy @MooPM_ico @Vickie Lau can look into these suggestion:
1. Since most of the scammers now are using personal chatroom to target Mooers and they can just open an account with just any email address. I do hope Moo Moo will disallow anyone without going through the KYC process (e.g. verify using SingPass, national ID etc) to use the chatroom feature, or at least don't allow them to chat personally with any Mooers. At least with the KYC process, if someone scammed another user, we have the scammer's information and can get the police to go catch them.
2. Add algorithm to detect and flag out people who are asking mooers for their WhatsApp, WeChat, Telegram, etc (be it text or photo QR code) for investigation.
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doctorpot1
Moo Contributor
crawled out of poverty, working towards FIRE!! (financial independence, retired early)
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