Intelligent people do dumb things

It’s official. Intelligent people do dumb things. Earlier this month, an internet fraudster – who had cashed in nearly half a million pounds – was put behind bars for two years for his part in a gang running various web-based scams.

The gang, whose leaders are still on the run, must have been good. Real good! According to the Metropolitan Police, the group enticed, among others, a doctor, an accountant and a hotel owner, to part with millions of dollars.

The first victim was a Canadian doctor. A member of an Internet dating site, the gang persuaded her to hand over more than $100,000 to a man she met online. He claimed to be a diamond trader.

The next victim, an accountant from Melbourne, fared even worse. He handed over $AUS1.7 million in order to secure a non-existent $500 million loan. Over a period of 14 months, he deposited money into various bank accounts to secure the loans. The accountant attended meetings set up by the gang in England and Dubai and to convince him, he was shown a trunk containing a large quantity of cash.

In a separate scheme, a Swiss hotel owner was conned out of £11,000 in a fraudulent oil investment.

How on earth did they fall victim to these scams? These are very intelligent people, experienced in business or their profession and, I would assume, cautious with their hard-earned cash.

Unfortunately, they came face-to-face with some really clever fraudsters who must have been honing their skills for a long time. It takes a lot of planning and thespian qualities to target three professionals and skim their bank accounts.

The hotelier may be £11,000 poorer but the other two are on the verge of bankruptcy.

How they did not smell a rat when approached by the gang is amazing for a number of reasons. Let’s take the accountant. A trained professional he surely knew enough about investments and finance to realize that not everyone is in a position to offer a $500 million loan, unless you’re talking to a bank or a well-known investment firm.

Whatever proof they gave him must have been compelling but for that amount of money, is it possible he did not carry out any background checks? Anyone with that amount of money to lend must be known in investor circles. If someone shows you a trunk full of cash and not a bank statement, doesn’t that seem odd?

The Canadian doctor case is also baffling. Why handover $100,000 to someone you met online? Blinded by love or the promise of greater riches? The lady doctor has learnt her lesson – but too late in the day.

These unfortunate stories show how easy it is for a well-prepared fraudster to entice people. They did not target uneducated or elderly people. No. They were so confident in their abilities that they went for two people who had the money. Why target the small fish when a larger one falls just as easily for the bait?

One motto rings true in these situations: If it is too good to be true, it probably isn’t. The best way to avoid falling for these scams is to be vigilant and suspicious. If an offer comes through the Internet and not through a channel you would expect, beware. If it’s intriguing, do your homework and get advice from a professional or a good friend.

Taking a step back and thinking with a clear mind is all it takes. We all take dumb decisions but there are some that can be avoided.

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David Kelleher is Communications and Research Analyst at GFI Software.