Staying Safe In The Financial Minefield

How many readers remember the days when we would receive hand-written letters from far-off lands, usually West Africa, telling us some sad tale of a president or other leader who had met a sudden end in an air crash or similar and had left a huge fortune that was at risk of being  misappropriated? Invariably the recipient would be invited in complete confidence to help transfer a few million dollars into his or her legitimate bank account before transferring it elsewhere and retaining a million or two for ‘the inconvenience’. Anyone responding to the letter was likely to be asked for some money to ‘facilitate’ the transfer. The lucky ones lost no more than the initial ‘facilitation’ fee but those driven by the lure of an easy million or so would often get drawn into bigger losses. Why on earth would people fall for such a scam? Human nature. According to the Serious Fraud Office in the UK at the time, an estimated one in a hundred recipients fell for the story. It made the effort of licking all those stamps worthwhile.


Has anything changed since then?

Yes, there has been a massive proliferation of scams. The Internet is the villain that has provided the catalyst. Whilst 30+ years ago the scammers would have to painstakingly hand-write or type letters and then mail them, they were now able to target millions of potential victims by e-mail. Until the whole world got wise to these stories there must have been innumerable victims, certainly judging by the numbers of people who asked me for advice as they thought the stories could be true. Spam filters are now able to keep the majority of these messages out of our in-boxes but every now and again one gets through the net. With the world now pretty much wise to their antics it might seem a waste of time but there are still vulnerable people or newcomers to the Internet out there. Which is one good reason if you have young children or elderly relatives to caution them to treat with great care and suspicion anything they see on the Internet.


Beware of the ‘really smart’ scammers

I have known many people, including clients, who have fallen for a particularly clever scam. The modus operandi is for the scammer to send out e-mails stating that their account (Yahoo for example) has been compromised and they need to click on a link to avoid immediate closure of the account. The link may be disguised as a Yahoo address and those who respond will get a reply purporting to be from Yahoo asking them to confirm their user name and password. Once they have given these, hey presto, the scammer then has access to their account. He then goes into all their past e-mails and researches their job, travel patterns etc. Armed with this information he will send e-mails, in the name of course of the victim, to everyone on the address list saying he or she is in distress in some far-off place, having lost his or her passport, wallet, credit cards etc and desperately needs cash which has to be transferred to a specific Western Union branch (and in time of course to be collected before anyone has the chance to send a warning.) The moral: ignore all those fake warning e-mails or check independently with the company involved.


Phishing traps

No, it’s not a spelling error and it has nothing to do with fish. It is the term given to the fraudulent practice of setting up false websites, typically those of banks. To get you to the website the bait (maybe this is the connection with fishing) is an e-mail telling you there is an urgent message from your bank and to click on a link which will take you to the bank’s website. The e-mail will be going out indiscriminately to thousands of people and there is a good chance you will not have an account with that particular bank in which case you will ignore it. But you may indeed have an account with the bank and may instinctively click on the link. On so doing the link will take you to what looks like your bank’s website and it will ask you a few security questions to prove your identity. If you haven’t sussed out that something is ‘fishy’ and you answer the security questions the scammer is now             well-armed to attack your real account.

On the same lines I once took a phone call purporting to be from my bank in the UK. The caller asked me if I would be interested in a new account for existing customers. I said I might be, whereupon he said he would first need to ask me a few security questions. I said ‘hold on a minute, you are calling me on a land line and I have never spoken to you before so do you mind if I ask you some security questions so I know I am speaking to my bank?’ He hung up.


There is no such thing as a ‘free lunch’

The Internet abounds with ‘free’ services and ‘free’ offers. Many are genuine but they are not charities and the companies offering the services have to make a living. Consequently we either pay for the ‘free’ services by  allowing them to make money from advertisers or at some point, once we are pretty well hooked onto receiving the service, they announce we will then have to start paying   for it. There is nothing wrong or illegal in this; this is commercial reality. But there are also cheats that jump on the bandwagon and lure us with free offers.

I am not an IT expert; I grapple with the TV remote. So I was happy to upload a free anti-virus programme when an offer miraculously popped up amongst my e-mails. At first it seemed to be doing its job but my laptop was still a bit slow so I was attracted to its offer of a higher level of service to bring it up to scratch. All it would take was $50, with a money-back guarantee within 30 days if not satisfied. But just to be careful I thought I would check it out first on the Internet.

Firstly I checked their website which was quite impressive in terms of appearance, glowing reports etc. But there was no indication of where the company was based or who was running it. So next I Googled the company and was horrified at the reports and complaints. According to many of the reports once the company got access to your computer they deliberately damaged it in order to press for more money to repair the damage. But there were also many glowing ‘over-the-top’ reports which looked suspiciously as if they were written by the same person – or robot!

To cut a long story short, I set about uninstalling the programme. This in itself was a trial as new messages kept popping up offering bigger and bigger discounts – right down to $10!

I was very happy to be relieved of my ‘free’ service.

I have exclusively addressed the issue of scams on the Internet this time. There is another huge area that should be addressed and that is investment scams, both global and ones to be found in Bali. No room now, but watch this space!


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Copyright © 2019 Colin Bloodworth


Colin Bloodworth, Chartered Member of   the Chartered Institute for Securities and Investment (UK), has spent over 20 years in Indonesia.

He is based in Jakarta but visits Bali regularly. If you have any questions on this article or related topics you can contact at : or +62 21 2598 5087.