The Anatomy of a Scam (Parallelisms with Elections)

The Anatomy of a Scam (Parallelisms with Elections)

May 04, 2016

Scams have happened before you and I were born. Yet we don’t seem to learn our lessons well as they keep coming back in different forms. You have the pyramid scam, pump and dump, off shore or exclusive investing and many more.

For scams to succeed, you need certain elements to be present. Let’s take a look at the elements that make up a scam:

  1. The promise of a high return over a short period of time with no risk. We always say that in investing, the higher the return, the higher the risk, and yet a lot of people still fall for this sales pitch. They forget to ask the why, how, what and where? Why should this instrument be extraordinarily good? How will the money be made? What is the instrument? Where will it be invested?
  1. There’s a lot of hyping and considerable pressure. If you attend their recruitment seminars, you see the main speaker very upbeat in delivering his talk as if he discovered the secret to living forever and is just so excited and generous to share it with you. There are a few participants who are actually planted in order to increase the pump and they are the ones who pretend signing up with lots of fanfare. There is pressure to sign up, “Sign up now or you lose this rare chance!” This does not allow the participants to go home and sleep over it before they make rational decisions.
  1. The promise of change. Sales people would say, “This is an opportunity of a lifetime and is a game-changer!” They give you that impression that you belong to a lucky elite first group to be given a first crack at this once in a lifetime chance. 
  1. Desperate customers.Sometimes we find ourselves in situations that make us want to change something desperately – a financial situation, your lovelife (in the case of beauty products maybe?), country’s situation, etc. For all you know, sometimes, it’s just boredom. 🙁
  1. “I’m smarter than others” mentality.This is very much present in stock trading, especially the active kind. It’s a zero sum game in stock trading and you would have to believe that you (even if you don’t have the necessary trading skills) could always beat the market! Believe it or not, some scam victims already smell something fishy, but just go on with the ride hoping that they would be able to get out “before the music stops.” They think of themselves as smarter than others. Unfortunately, nobody knows when the music will actually stop. In some cases, even the perpetrators don’t exactly know when. 
  1. Once in, victims are under a spell. Just like the previous number, they already smell something fishy but still refuse to do something about it. As if hypnotized, they still turn a blind eye on what’s obviously wrong and just hold on to the promise of the scammer that everything will be okay. Heck, they don’t even ask for proper documents. 
  1. Victims cry out for help when it’s too late. Time and again, we see the victims come out only when the perpetrator has fled with all their money. 

If you take a look at the above elements of a scam, you see that both the scam perpetrator and the victim seem to almost have a 50-50 share in responsibility why the fiasco happened. Walang manloloko kung walang magpapaloko!

Parallelisms with Elections

With the election campaign heat as high as our temperature these days, it’s hard not to see that the anatomy of a scam is very similar to the anatomy of choosing a leader who is able to hypnotize us.

I ask all of us to please examine our choices. Do not look for a perfect candidate. No one is, as no one among us is a perfect citizen. But before we cast our ballot on May 9 let’s subject our chosen candidate to the seven elements above:

  1. Is his promise too good to be true? Has he answered the why, how, what and where to my satisfaction?
  1. Do I think there’s too much hype in what he can deliver? Is there a lot of pressure and bullying going on just to make my candidate appear good?
  1. What change is being promised? What will this exactly be?
  1. Am I in a desperate mood that I’m willing to take too much risk?
  1. Do I think I’m smarter than others such that I convince myself that I will not be left with an “empty bag?”That I will not suffer from the consequences of drastic measures because I’m way too good a citizen?
  1. Am I under his spell such that the things I used to hold dear -good family values, democracy, honesty, social decency and other great ideals that a society needs – are no longer that important to me because my candidate seems to not have regard for them?
  1. Will I eventually cry for help when it’s too late? 

Unfortunately, the victims in the outcome of a poorly elected leader are not only going to be those who choose badly, but everyone, our entire country, whose fragile democracy and economic gains are at risk!

Are we in doubt? With the recent developments, some of us may already be doubting our original choice whom we fiercely defended against all attacks, valid or otherwise. If we’re beginning to doubt now but feel that we’re way too invested already, there is such a thing as cut loss (selling a losing position now in order to avoid a bigger loss). So what if we admit that we made the wrong judgment at first because we didn’t see everything clearly yet? Hopefully, unlike the scam victims who only cry for help when the perpetrator has run away with their money, we will not wait for the time when our choice has already run away with our freedom before we cry out for help!





  1. Come join my free workshop brought to you by Kidzania on May 7, 2016 at 10 am. To register, please poster for details. It will be fun! KZ Parent Talk 3


  1. I will speak at the Financial Wellness Program of Security Bank on May 19, 2016 at 10 am and 2pm.

Rose Fres Fausto is the author of bestselling books Raising Pinoy Boys and The Retelling of The Richest Man in Babylon (English and Filipino versions). Click this link to read samples – Books of FQ Mom Rose Fres Fausto. She is the grand prize winner of the first Sinag Financial Literacy Digital Journalism Awards. Follow her on Facebook and You Tube as FQ Mom, and Twitter & Instagram as theFQMom.