All posts by Paul Zagoridis

Is this Investment Call a Scam?

You’ve just received a phone call on your mobile (a.k.a. cell) phone. The nice person on the end of the line is lovely, polite, smart and caring. They care deeply about you and they have amazing investment opportunities for their clients.

It’s very rude to assume this nice person is a fraud, thief or scammer. So push that thought right out of you mind. But, a nagging thought made you look things up on the internet, “just in case”.

How can you tell if that call is from a fraud, cheat, thief or scammer? Here are 12 ways to tell that the nice person on the phone is a scammer. Note this is a list of red flags, answering Yes to any one question implies it’s a scam.

  1. Have you heard of the company before?
    If you didn’t and you did not talk someone in the previous 24 hours who mentioned that company name explicitly to you and asked to call you back, it’s a scam.
    It’s that simple, if the call is not from your bank, insurance company or stockbroker and you are not an active trader attending networking events, what makes them think you’re a prospect for their marketing call?
  2. Can you fund your initial position with a credit card?
    Real brokers will not accept credit cards, because the fees are too high and customers can charge back deposits in most jurisdictions.
  3. Can you fund the account with as little as $250 US Dollars?
    Even the largest and cheapest US stock brokers charge about $10 per trade so that represents 4% of your capital. Factor the cost of the call, plus time and infrastructure to make these marketing calls, $10 does not represent a decent return on investment for the call centre. Not all Dealer-Brokers charge brokerage. Forex and CFD charge a spread between buying and selling. The fundamental financial equation does not change, it takes thousands of dollars in fees to justify a broker’s one-on-one time and attention.
  4. Is the caller from outside your national jurisdiction (i.e. overseas)?
    Calling across borders has been the basis of investment scams since the invention of the telephone. If your local Securities Law enforcement organisation can’t touch the dealer-broker, you can’t be protected by them.
  5. Does the caller speak with an accent different from your own?
    If the person calling speaks English, French, Russian or your local language but not with your local accent and you can’t visit their local office today, it’s a scam. I’ve had brokers in Sydney, Australia who had a foreign accept, but I can walk into their offices during business hours. I can’t do that with the broker-dealers who’ve called claiming to be in London, Hong Kong or Tokyo.
  6. Is the caller pitching something you’ve never heard of?
    If you are not a sophisticated investor who regularly reviews private placements, and the call is pitching something you’ve never heard of, it’s a scam. Even if you’ve only heard of it in the news (like “bitcoin”) it’s a scam.
  7. Does the caller mention the words ICO (Initial Coin Offering), Bitcoin, Blockchain, Coin  or crypto? 
    If you’ve never invested in Bitcoin or other crypto-currency and those words come up, it’s a scam. If you want to buy bitcoin (or any of the alt-coins) for the first time, meet someone IRL (in real life( in a public place and exchange cash for the digital currency. People like that exist, they’re not all drug dealers.
  8. Is the phrase “Binary Options” used?
    Seriously Israel has banned Israelis from promoting Binary Options outside of Israel because it is that big a scam. It’s up there with the Nigerian Princes.
  9. Do they offer to remotely log into your computer to set you up on the trading platform?
    If they offer to use Team Viewer (or other remote desktop software)  to help set up your account, it’s a scam. If you can’t set up the trading platform without them taking over your computer you don’t have the IT and security skills to use their trading platform safely. It’s a scam to see how much money you have in your bank account. Normally by this time you’ve already sent them money. Cancel you credit cards and stop talking to them right now.
  10. Is this a cold call?
    If you receive a cold call, it’s a scam. Cold calling is dead in the internet era. Every legitimate marketing move is about attracting warm leads from customers who want to call the supplier. Insurance companies don’t cold call. Credit card companies don’t cold call. Car dealerships don’t cold call. Legitimate investment advisors do not cold call.
  11. Does the caller lack an active LinkedIn account?
    Note the existence of a LinkedIn profile is not any guarantee, if could be fake. Check if their connections are all in the finance game. If so, they’re fake. Brokers are sales people and they love having lots of connections. Thousands to tens-of-thousands of connections. Ask for all their social media accounts. Do a search for the firm name and the results should be a lot of people who work or have previously worked there.
  12. Bonus for the cautious – Is the caller speaking a recognisable language?
    This is a variation on “if their lips are moving, they are lying”.  If you want to invest in a new area, do your research and reach out to someone. Never accept a call from someone you don’t know who wants you to give them your money. Always ask for a recommendation from someone more experienced than you.

No Bitcoin for Sir John Key Former NZ PM

Sir John Key, the former Prime Minister of New Zealand has never invested in Bitcoin. He is not promoting cryptocurrency. If you see it on your news feed or on a website it’s a scam.

Scammers on social media Facebook and Twitter and other sites have set up fake websites to look like the New Zealand Herald. With that photo and a pull quote claiming

I have invested in Bitcoin because I believe in its potential, the capacity it has to transform global payments is very exciting.

~ Never said by John Key 38th Prime Minister of New Zealand but actually said by Richard Branson

Scammers never fully abandon an idea, this will be recycled when the bad publicity dies down.

The article quotes Key as saying he turned a $1000 investment into $300 Million in seven years using a “bitcoin loophole”. Supposedly you can make hundreds of millions of dollars without understanding the market, without effort and without risk.

There’s a hint. Anybody selling you something that uses a “loophole” is a scam, 100% of the time. People who actually discover loopholes (or correlations) keep the secret to themselves while they make money on this arbitrage. When the process stops working efficiently, they sell it to other fools people.

Sir John Key tried to get Facebook to take down ads using the fake image and website. Initially Facebook refused and resisted despite it being an obvious scam. Hopefully six months later and with all the focus on fake news, it looks like the ads are no longer visible on Facebook, but a source who knows Sir John says he is still frustrated and annoyed by these scammers.

The NZ Herald also worked to get the fake site taken down and appears to have succeeded. However the registry information shows the bisimfinance domain is still registered.

Sir John Key made his fortune as a currency trader before entering politics. His net worth is estimated at $65 million NZD.

Official letter from HQBroker

Three hours twenty minutes after sending the Official Letter from BSD Administration, HQ Brokers sent this message with the same subject line.

This is the first time a full name has been used by HQBroker so I’ll ask her for the “official appeal”. This will be interesting.

Subject: Official letter from HQBroker
Date: Sat, Jun 16, 2018 at 12:27 AM
From: [Redacted] <[redacted]@hqbroker.com> sent this message via the Contact page
To: Wealth Esteem wealthesteem.org
Message ID <28e1d5951730d7a253fc8989719913d9@wealthesteem.org>

Dear Paul,

Today lawyers of the BSD Company appealed to us regarding material that was published on your website, this material contains information about allegedly connection of BSD Company and our Company HQBroker. Please note that the company BSD has nothing to do with the broker HQBroker.

We ask you to remove in the shortest time all information related to the company BSD. If you do not do this, you will be dealt with BSD attorneys. Please, contact with us for the official appeal.

Official Letter from BSD Administration

I received this message via the Contact page.

I wish I knew who wrote it, but it states no name or capacity beyond “represent”. The [redacted] email address used to post the message is a generic role-based address not usually used for such communication. It doesn’t state the legal entity or address of the entity. That makes it hard to respond. Will the writer please comment below with those details so I can respond?

Subject: Official Letter from BSD Administration
Date: Fri, Jun 15, 2018 at 9:07 PM
From: BSD Trade Services <[redacted]@bsdtradeservices.com> sent this message via the Contact page
To: WealthEsteem wealthesteem.org
Message-ID: <664963a9ac0ff893b8f4d28dee7a9889@wealthesteem.org>

Ma’am/Sir,

This is an official letter from BSD Trade Services Corp. administration, on behalf of the company I represent, BSD Trade Services Corp., I would like to denounce all claims and allegations the company is receiving from your site. BSD Trade Services Corp. is a BPO operating firm that provides diversified services to various types of industries. Our services include outbound call center for accounts opening financial institutions, customer support that receives inbound calls, digital marketing, and first deposit services. The firms we provide services to include financial institutions as banks, online trading companies, and insurance companies.

However, the services we provide to HQ broker do not, and should not, reflect the entirety of BSD in any way; reiterating that HQ broker is not the only company we cater.

BSD neither handles HQ broker’s clients nor their clients’ accounts and/or funds. Our company also does not give financial advice to HQ broker itself or to their clients; our company does not provide HQ broker financial services, ergo ensuring that we are not involved to any of their transacting activities. BSD yields only the services available in our company, and we do not offer HQ broker further proceedings beyond what I have mentioned.

I attest that our company fulfills its obligations and responsibilities in practicing all laws and regulations stated from our country’s Department of Labor and Employment.

Furthermore, all claims stated heretofore to our company are false and should therefore be removed as we stand to retain the company’s upright name and reputation. It would be of our complete right to institute legal proceedings should any comments, reviews, or claims against BSD is not discarded or removed.

We await your action and response.

Respectfully,
BSD Trade Services Corp.

FTOCapital.com Scam

I received a call today from 03 9077 1873 claiming to be from  Financials Trading Online with a pitch exactly the same as HQ BrokersI’m not sure if H Q Brokers have pivoted to a new name or a different scammer driving this call. It’s a different scammer from H Q Brokers.

It was obviously a Filipino boiler shop, but they claimed to be located in London. The caller stuck to the script like glue. I could trade “forex, commodities, stocks like Apple and Coke and even bitcoin.” Every interruption saw him back up to the top of the paragraph and continue reading like nothing happened.

I asked how they got my details and he said:

Surfing the internet you get popups for bitcoin or forex. You’ve seen them right? Well you accidentally click on them and we have your name, email and phone number.

Now I don’t accidentally click on popups or pop-unders because my browser is locked up so tight that I never see that stuff anymore. So that’s a lie but I don’t doubt they actively remarket and retarget anyone with investing interests (hello Facebook and Google). I also think they’ve got the BitCoinTalk forum user database and other hacked forums’ user-lists and cross-referenced emails to phone numbers. Plus a bot could do Facebook phone number lookups until two weeks ago to match numbers to names.

FTO Capital’s script really focuses on confirming past trading experience. I think this is supposed to get me nodding in agreement with what they are saying as well as reinforce their expertise (?) as a trading platform. I could open an account with a deposit of $200USD. Aha! Now I see the reward the boiler-room is working for.

Their website is at FTOCapital[dot]com and they try to get you to create an account and make an opening deposit straight away.

Asking about regulatory compliance and licensing, I was quickly escalated to the Senior Account Manager Dale Davis. Dale promised me that my very own Senior Account Manager would teach me how to trade using their MetaTrader 4 platform to trade forex, commodities, stocks and even bitcoin.

But Dale is a Senior Account Manager right, why do I need another? It turns out Dale is only for onboarding new accounts. What sort of things will I learn at FTO Capital from my personal Senior Account Manager? I’d learn “How to read price and signals”.  Really?!?!

By now I was bored, but I persevered for you, dear reader.

I asked Dale, If I have a trading account why would I change to FTOCapital? He says I “May want to give it a shot”, which is the most low-pressure answer I’ve ever heard in a high-pressure sales call.

Back to basics. Are they regulated, and in what jurisdictions?  Dale says FTO Capital are physically located in London, operating in Australia & New Zealand for two years, South Africa longer, some Asian and some European countries too.

That didn’t answer my regulation question. Dale said Financials Trading Online are regulated in Canada, USA, France and Cyprus. And despite being located in London, FTO Capital is not regulated in the UK. In what jurisdictions is FTOCapital actually licensed? Dale said he’ll send all that info to my email address right now, put me on hold and 60 seconds later the call dropped out.

I didn’t believe any of that for a second but I wasn’t challenging anything FTO claimed on this call. Normally if I have the time to string these guys along I play hardball. Today I played coy for 19 minutes so they weren’t trying to scam someone else.

FTO Capital are listed on ASIC’s MoneySmart website. ASIC advises this company could be involved in a scam. Do not deal with this business as it is unlicensed in Australia.

The FTOCapital website mentions other company and brand names

  • Nona Marketing Ltd,
  • Financials Trading Online, and
  • Albius Ltd.

Red Flags from the website:

  • All references to companies and brands are pictures of text facilitating the easy swapping out of corporate entities and making it hard for search engines to link the context of the text.
  • The privacy policy does not name the company it applies to merely (“The Company”) hereafter the “Company”,
  • Terms & Conditions does not name the company or incorporation jurisdiction. It  merely states The Company is a brand owned and operated by(“The Company”) incorporated in the; and it peters out there.
  • Anti Money Laundering (AML) policy of for Nona Marketing Ltd with no reference to brands, subsidiaries or related entities. It is also a generic cut and paste AML that offers broad responsibilities of “the board” and “senior staff”

Addresses for this group are

  • Nona Marketing Ltd Ajeltake Road, Ajeltake Island, Majuro, Republic of  Marshall Islands
  • Albius Ltd, 53-55 Totlben Blvd. Sophia, Bulgaria
  • 4th Floor, Holden House, 57 Rathbone Place, WIT IJU, London UK
  • Lincoln House 296-302 High Holborn WC1V 7JH, UK

Phone numbers

+44 208 068 2565

Share your experiences in the comments below.

Update: 13 June 2018

As police raid Israeli-operated boiler rooms in Asia and Eastern Europe, local law enforcement has yet to indict a single operative from an industry that has stolen billions.  – https://www.timesofisrael.com/israelis-nabbed-in-philippines-are-tip-of-iceberg-in-alleged-fraud-gone-global/

There are international news reports that Philippine Anti-Cybercrime Group raided the offices of IBD Marketing on 6 June 2018 arresting 8 Israeli citizens and 474 Filipinos. According to Philippine police, IBD Marketing operated as a call centre on behalf  FTOCapital.com. Hopefully that puts an end to this particular scam, but it seems the scourge of Israeli-citizen operated boiler rooms continues.

Fired on Your Birthday

My daughter heard that a coworker was let go on her 18th birthday.  Her message to me was in ALL CAPS and full of umbrage. The worst was the boss knew it was the kid’s birthday and FIRED HER ANYWAY!!!

That reaction was natural and wonderful. I am so proud of her empathy and humility.

Now, let’s look at the situation. They are all young, casual, employees in retail, customer-service roles. A manager decided a specific employee must be fired and not for theft, fraud or illegal behaviour.

Would it have been better to wait and make the worker come in on another day just to terminate them? Should the manager have made a phone call tomorrow and fire over the phone? What about firing by email or SMS?

Another way I’ve seen this done is merely not roster them for the next few weeks, with a gutless understanding that “they’ll get the message”.

No, there is nothing to be gained from avoiding doing it, in person, as soon as the decision is made. All other options extend the pain and drag the ugly feelings on.

It’s harsh but fairest to get it over with.

I’m sure the Manager took no pleasure in the firing. Managers who don’t feel bad letting someone go need to be fired themselves by their bosses. Managers who cannot feel empathy destroy a business.

And for the record, the Manager did not know it was the former employee’s birthday, but was saddened by the timing and shocked that the rumour-mill works so fast.

Scammer Phone Numbers

I’m putting a list of phone numbers used by scammers to call me. Note this list is for people who’s offers seem too good to be true, or breach Australian cold-calling, do-not-call or solicitation laws.

Telemarketers are on the Telemarketer Phone Numbers list.

+61 2 8206 9200
02 8206 9200 – Free iPhone promotion

These numbers are used by the FTOCapital.com scam
03 9077 1873
03 9071 1891

These numbers are used by the HQBroker.com scam:

+1 647-989-8384
+27 (11) 068-6391‬
‭+27 (11) 362-1989‬
‭+27 (11) 710-1561‬
+44 20 2892 9411
+44 20 3140 4223
+44 20 3169 9197
+44 20 3235 5067
+44 20 3341 2365
+44 20 3403 9281
+44 20 3438 6555
+44 20 3816 5690
+44 20 3817 4627
+44 20 3932 7940
+44 20 3953 7863
+44 22 0296 9287
+61 409 464 294
+61 403 434 285
+61 402 602 207
+85 20 0064 3148‭

These numbers are used by Mandarin Speaker’s Phone Scam covered by this excellent Scammer Reveals All SBS Viceland documentary and investigation.

0417 141 083
0417 018 451

Comment below with the numbers that have called you. You don’t need to create an account to make a comment, but you do need an email address to post a comment (I keep that data hidden). If you really don’t want to use an email address, please use bugmenot.com or even a long text or number string (like the phone number you’re reporting) @wealthesteem.org

Entrepreneurship is an Art, Not a Science

Street Lights 2 photo
Street Lights 2 photo by Michael Lorenzo, Pasig, Philippines

The earliest reference I can find is by Paul Willax from 1 July 1996

Entrepreneurship is an art, not a science. The Greeks recognized that there were techniques (“techne”) that could not be explained in words, but learned only through apprenticeship and experience.

My search was not extensive, but I’m happy that the quote has been around for at least 17 years.

This is why competing advice is possible and can lead to failure and success. Even more importantly, this is why Entrepreneurship is learnt and perfected by experience.

There are subject matter experts who can teach or manage accounting, marketing, logistics, customer service, manufacturing, supply chain, procurement, finance, human resources, leadership and development, training, quality control and assurance, risk management, legal affairs, decision support, corporate governance, and even sales. However the unique mix of problems and opportunities that every business faces do not work in a reductionist, reproducible manner. What experience teaches is to be comfortable with uncertainty.

Actually experienced has taught me that when the going gets tough how to pivot and fight for revenue. I know I don’t have all the answers, I don’t even know all the questions.

Experience is a proxy for flexibility and insight. Some people, particularly those who have had success early often mistake that experience for wisdom. Nothing is more painful than thinking your previous business or entrepreneurial experience is applicable in the current circumstances only to discover that this situation is different. Successful people pick themselves up from under that misapprehension, dust themselves off and learn from the experience.

Some people learn to avoid risk altogether after a failure. While I feel a little sad for them, I totally understand where they are coming from. Failure batters the ego. That is why I celebrate the people with multiple successes. They almost certainly have failed forward along the way. That’s also why I admire successful, experienced sports people. I don’t really spend time wondering about the lucky few for whom success comes easily. I want to hear about people looking at themselves late at night, with no one else around, and deciding to get up one more time after being knocked over. That’s a cliched statement, but it’s a story I never tire of.

Problems Facing the Film Industry

Red Curtain
Red Curtain by djnorway http://www.sxc.hu/photo/1374248

There is a lot of gnashing of teeth about the future of the film industry given that “Between 2007 and 2011, pre-tax profits of the five studios controlled by large media conglomerates fell by around 40%”.

The business of film making (as opposed to TV) will change. The Internet has disrupted theatrical distribution, home video and home entertainment.

Hollywood has responded to the threat to their business model by pursuing tentpole releases. Big event movies that prop up the bottom line the way a pole props up a tent at the circus. That’s still a broken business model which sees the studios make fewer movies which each carry a greater share of the risk. $300 million USD to make and another $50-100 million to market. Now in the world on mega corporations those numbers are not significant.

The problem is that the large media conglomerates are too big. If they had a movie that cost $25 million to make and market, and it made $75 million that’s a great result. But it doesn’t mean a drop in the ocean for conglomerates that big.

In the long run I expect the film production business will be a big but not huge business. Mature competitive markets eventually generate zero abnormal profits. In the long run mature markets can be measured by return on equity (ROE pr ROCE). I don’t see something as bespoke as film production becoming that reliable. Television drama with it’s focus on reaching 100 episodes can produce a product range over 3 or 4 years.

Public ownership of movie production companies is not a good fit for the model. Smaller companies and smaller movies will always find a way to make money in a smaller market.

Interestingly, are there any publicly listed Art production companies? No, but that doesn’t stop artists from creating work, and the most successful of them making a very good living at it.