October 30, 2006

The IQ-drop factor – an anatomy of a scam

When money is involved, people seem to suddenly drop at least 50 IQ points. This is probably the reason that so many scammers still exist (and even flourish) amongst us. No, this is not about scamming agents this time but about real life scammers :p

In Sri Lanka at the moment, Seagull Softwares (yes, indeed, they called themselves "softwares" :p) is major news. This is because some guys from Seagull Softwares ran a Ponzi scam on a lot of people over here and absconded with a boatload of money. There are varying accounts as to how much actually was taken but one of the figures thrown around is 300 million rupees (which is about US$ 3 million) – not a bad haul.

The scam itself worked like this. These people say that they’ve got some sort of BPO (Business Process Outsourcing) venture and that you could earn money in your spare time by helping them do data entry. To get a job, you have to buy a slot at US$ 65 a year. Each slot is supposed to pay you back $40 a month if you did the assigned work. You can get as many slots as you want. The work? Apparently, you have to sign into their server and you get a job per slot. The job is basically a keyword (or a set of keywords) and you have to go online and find information relating to the given keywords, compile it all into an Excel spreadsheet and upload to their servers.

I first heard about this from a friend of mine. I was suspicious since I don’t like "jobs" where you have to pay to work. My friend told me that he knew somebody who was doing it and had already recovered their investment within two months. I still didn’t like it. Why would anybody pay you to find information via Google when they could do the same thing themselves? A few days later, my Mom told me that there were relatives in our family who were doing the same thing and earning a fair amount of money because they’d bought 10 slots. There was apparently another relative who’d bought a 100 slots (or some such large number) and was employing other people to do the work for him. He was paying them about $250 per month (on 10 slots I believe) and keeping the other $150 for himself. So again, good business and apparently paying well.

My Mom was like, "why don’t you do this too?" I said that nothing which sounded easy ever was. Her response was the motherly equivalent of a raspberry :p She wanted to know how come there are so many people making money if it was a scam. I had no response. I went online and checked and there were just two entries that I could find which talked about these people and even there, they were asking for more information rather than enlightenment. The website (for there was a website at that time) was rather crudely done and was registered by some guy in India. I decided that I wanted nothing with them.

Last week, the news broke. Apparently the police were investigating an Internet-based scam operation which sounded a lot like Seagull Softwares. But no name was given and no details. Yesterday the papers were full of it. I went online and suddenly there are lots of sites, all talking about how they were defrauded or how their relatives were defrauded and how they’ve lost everything.

I feel for these people. Some of them are retired pensioners who used their savings in the hope of making more money. Others are schoolkids who begged or borrowed the money. There are people who’ve invested millions hoping to run sub-contracting businesses. I feel sorry for them but I just can’t help wondering, what is it about the human race which makes you lose sight of everything when some money is waved in front of your face? They say that a crocodile’s eyes close when it opens its mouth (this is part of some folk-tale – not sure about the accuracy of the statement :p) – people seem to be like that. People’s eyes close when their mouths open wide in greed.

After the whole Seagull Softwares debacle, there seem to be new scams and new twist rising out of the ashes. There is a mysterious organization which says that it is trying to gather information about the victims of the scam and wants all their personal details but nobody seems to know who they are. They seem to be very insistent that people send them information on the sites where the scam is discussed. There’s also talk of all the scammed people getting together to have a meeting in front of the Seagull offices today. Others have all sorts of weird theories as to why (and who) perpetrated the scam.

Sure there is a lot of brouhaha. But unfortunately, I have a feeling that a week from now, this will be forgotten and the same people who fell for this one will be lining up for the next great thing. Such is the nature of humanity.

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Tags: Internet, Real Life
Posted by Fahim at 8:11 am   Comments (0)