understanding the Fraud


The first step in avoiding fraud understanding it, which means also understanding who the players are. This section explores both sides of the fraud coin, offering insight into those that scam, and those who are scammed.

Who Are Fraud Victims?
Fraud victims are often portrayed as naive dull witted individuals who all but throw their money at any opportunity which comes along. This is a stereotype which scammers welcome, as nobody considers themselves a fool, which means that most people consider themselves immune to fraud from the outset. An arrogant trader who thinks he or she knows it all is one who is likely to be stung by experienced scammers who foster the arrogance, using it as a tool to keep the unwitting victim on the hook and in the dark.
It is very dangerous to look down on victims of fraud for a two reasons. The first reason is that the scammed victim could well be you one day if you are not careful, and two, whilst you are gloating and feeling superior, you are not learning from the other person’s mistakes, and are in fact, setting yourself up to fall into the same trap.
The reality is that every trader is a potential fraud victim, and it is the rare (and perhaps non existent trader) who has never been the victim of some fraud, be it minor or major. The old adage ‘pride comes before a fall’ is never more true than when it is applied to international trading.

Who Are The Fraudsters?
Being able to identify a fraudster is an invaluable skill, and one that will grow with time and experience. However even experienced traders can sometimes be taken in by a smooth talker with a slick pitch. An entire section has been devoted to the tricks of fraudsters, so that will not be dwelled upon too much here. Suffice to say, most scammers appear to be very personable people. It is their job to falsely gain the trust of unwitting victims, and many of them are very good at it indeed.

Scammers by Geography
Nigerian scammers have become well known even to non traders, and though I must caution that nationality is not evidence of fraud in itself, it is wise to thoroughly investigate trade leads and offers which emerge from Nigeria and other African nations. As China further develops into an economic superpower, similar scammers are emerging, as are many in Eastern European countries. There are certain commonalities in all these cases, the scammers come from countries which have seen severe economic repression, where making an ‘honest’ dollar is a far greater challenge than in other, more developed countries.

Organized Crime
Organized crime is quite commonly behind many scammers, which is a powerful reason to stay well clear of deals where you cannot identify all parties and sources. The consequences of becoming entangled which such groups and leaving oneself financially, or even physically vulnerable can be extreme. Traders should be aware that in some jurisdictions, organized crime may be integrated into the official bureaucracy and government offices, so additional care should be taken when dealing with business partners in unfamiliar jurisdictions. A trader should always research the unique climate of a new jurisdiction with regards to organized crime, among st other things. Information on how to do this is provided in later sections of this guide.

Lone Wolves
Perhaps the most dangerous of all scammers, lone wolves are scammers who work alone or in small groups, disappearing completely once the fraud has been carried out successfully, then reappearing under a completely different guise weeks or months later. These scammers are exceptionally hard to catch because they are so independent with few ties, and also because they are often very good at what they do.
In general, scammers and fraudsters have no qualms about defrauding honest traders out of large sums of money. Many show sociopathic tendencies, knowing that what they are doing is wrong, but feeling no sense of guilt or remorse about it. To them, fraud is but a game, and like any game those better at it deserve to win. This can be disheartening for honest traders, but it is a reality in of the world of international business.

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By helpintrade

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