Grifters, Thugs, Conmen, Swindlers or Scamesters, by whatever name called, follow one principle that the people who do not know how to retain their money, do not deserve to possess it. They utterly lack any center of morality, when it comes to money. A person with money is their target or the mark. Grifter works by generating confidence. Once the mark or target trusts the grifter, the move is made to accept the asset moved by mark under confidence.
Sound familiar? Not yet? Wikipedia defines this trick or scam it as:

A confidence trick is an attempt to defraud a person or group after first gaining their confidence. A confidence artist is an individual operating alone or in concert with others who exploits characteristics of the human psyche such as dishonesty, honesty, vanity, compassion, credulity, irresponsibility, naïveté or greed.

Corporate Grifters:

The corporate grifters rob people with two kinds of justifications or explanation:
1. It is the market force or something beyond their control
2. It is just an unintentional error which never happens.

Investment consultants; Hedge Funds or Mutual Funds Promoters

Many years ago rather in the year 2007, some investment advisor finally convinced me to invest in a mutual fund. This mutual fund was managed by a Bank which in turn was owned by a very successful stock broker. Success stories, convincing logical arguments, spiraling stock market and the magical charm took me like storm. Finally I wrote the cheque. The stock market index called NIFTY was at 4900. Next year it rose to 6000. My fund value rose by 10%. Suddenly stocks start to collapse. By July 2008 Market Index fell to 5000 and my investment fell by 20% from original amount and 30% from it peak. By September 2008, Nifty had fallen to 4200 and my fund value dropped by 40%.
At this stage I decided to quit. It was plainly foolish. If only I had Bought the Exchange traded Index, I would have been better off. But what went wrong?
The answer is: Everything!

1. They invested more at peaks and less at bottom of the market.
2. When Markets fell, they tried to average out but in a steep fall, it is like holding a falling knife.
3. After a while it was a panic and everybody was withdrawing from the funds, hence there was nothing left to average or even for systematic monthly deposit.
4. In substance extremely poor fund management who acted as if they had no clue as to how things work. After were they were supposed to have a disaster plan.
5. Rumor has it that private loss making positions of decisions makers are transferred to the Mutual funds and thus their losses are absorbed by these funds.

Why remember now? Because the way markets have risen in past few days, same euphoria is built on very thin ice of economic recovery.

Principle learned: There are no smart people out there to make money for us. Smart people work for themselves.

Commodity Trading

He was a mild-mannered middle class portfolio manager. He was following me everywhere, “to seek my blessings”, so he would say. Slowly he developed, trust by doing a small errand for me. He told me that commodity markets were volatile and therefore very profitable. I told him that I know nothing about commodities except may be bullion or crude. No prevailed upon me to part with small sum of about 50 grand. He assured that there shall be a profit of about 400 to 500 everyday and that he would manage it. However he sold everything what went up and bought everything what went down. The charm was over, before it begin. I stopped the transactions after losing 30g and closed the account.
The persistent fellow still does not forget to send me greeting for every occasion.

Life Insurance with Aviva

Have we ever wondered why fund value of our Life Insurance Policy does not increase? Because the Commission Agent gets 30% every year just for locating a right fool for Insurance company. Aviva’s representative informed me about this. While my fund value is struck at the same place for last one decade, rather fallen in last few years, my motivator, the sweet black beauty, with wonderful teeth gets 30% every year. Now unless I die, I can not make any profit from this policy. Oops, if I die how will I benefit?

Wordspace Satellite Radio

‘WorldSpace’, was a satellite radio network that in its heyday provided service to over 170,000 subscribers in parts of Africa, the Middle East, and much of Asia with 96% coming from India. They sold satellite radio receivers to millions of people. the Receivers which can not be put to any use anywhere except worldspace. They collected millions in advance for radio subscription but filed bankruptcy in 2008. My subscription for about 8 months was never refunded. So were other millions of people. We received a notice from bankruptcy court in USA. Now sending court notice by cheapest post was to cost 100 bucks. To throw another 100 to recover lost few thousand did not make any sense. Nobody got anything from US Bankruptcy Court except secured creditors.

Advance booking

This is the biggest scam of all times. Every one does it. Large advertisements appear in the news paper for booking apartments to television at concessional rates. Sales personal appears at the door step to book a phone connection or something else. Are they all dishonest. May not be. How to decide? Court dockets are full of incidents of misappropriation of large sums but what about the small sums say few hundred? These go unnoticed and nobody cares even if it is reported.
A salesman, selling a TATA CDMA phone approached me. I filled the form and handed him a cheque of thousand or so amount. He promised to send the phone in three days. His visiting card is with me. He never came back. He was a con-man. Cheque was encashed. Police complaint yielded no result. Culprit had left the job. Police wanted me to supply his address. Amazing!
I wrote to Ratan Tata, one of the most respected and scrupulous persons in industry, who is chairman of TATA Group. No reply was received. May be he could not do anything but it did not generate any alarm. Perhaps one complaint was acceptable risk. Few hundred of good money wasted to chase bad money. The amount involved was too small. But how many more people were cheated this way? Who knows? Another example of advance booking of Android tablets is here.
One swindler who robbed people by over booking the space in a building under construction, still travels in Mercedes (of course not in his name or family member/relatives), after all his assets have been taken over by court receivers. He gets a maintenance of about 50g per month from Court Receiver.

Consumer is King but he only reigns and do not rule.

These corporations do not bother for consumers or their money. They show off as too big an organization which can neither falter nor fall. But the truth is bigger the organization, more vulnerable it is and more prone to mismanagement it can be. The consumer is King only till he has not made his mind. Once he is in, he loses all his power. Now in the above examples the money was paid in advance. The con-job works, other way as well.

Telecom companies

The example of Reliance data card are here. How Reliance cheated the consumers with their tab is here. Part of Vodafone story is here. The conclusion of Vodafone story is with conversion of a post paid connection into pre-paid so that they may not bill any more. Point is that all these corporations cheat millions of people of small sums and they get away because more often it goes unnoticed. Telecom companies have a specialized technique that they will keep the subscriber on the hook so that the bills continue to pile up. Infact the Vodafone Saga inspired me to look back and see the pattern of all these corporate grifters.

Education

Anxiety of future create great marks. Grifters find no mercy for young children as well. Only Money matters. See how FIITJEE is duping people.

Acceptable risk

When a group of persons is under hostage or an area is under cease of enemy, the army assesses the threat perception and assesses the possible loss of lives in case of an assault on enemy. A small number of fatalities are termed as acceptable risk. Therefore these companies create such circumstances of trap that they make billions and if they are caught they refund a few millions better still pay less than a million in penalty to Govt. This is an Acceptable Risk for these companies.

Credit Card and Recovery Agents

They are the real sharks. A small overdue and the amount keeps piling up on credit cards. An ignorable sum of few hundred becomes 50 thousand and then it is settled in ten thousand. What is this. Actually any amount which is due for over three years is unrecoverable in law or is time barred as it is called. The credit card companies sell these dues to Recovery Thugs who are unscrupulous lawyers or retired police officers or out right muscle men or all of them together. They purchase the dues at about 5% of face value. So total recovery on the entire portfolio is never expected. Settlement at 10% is profitable by 100%. First they approach as if to help with discounted payment. If unsuccessful they make threatening calls, false statements that warrant of arrest have been issued, etc. All completely bogus. Legal problem arises if any one gives anything in writing or a cheque to these people because that legally revives the liability. Otherwise all this barking has no meaning.

So beware. Next time some one resembles Santa or poor Tom or Dick, remember he can be a Grifter looking for a mark. Small amount is deterrence for them but it is for us.

© Sandeep Bhalla