Proficient Note Buyers
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March 29, 2011
Fraud Detection Warning
We got a voicemail from our bank this morning, asking us to call them immediately about our Visa debit card. My wife was out and about, so I called and asked if she had used her card anywhere. Turns out she had, and it had been rejected at two different establishments.

Now, she knows how much is in our checking account, and I know how much is in our checking account, so it wasn't rejected for lack of funds. Instead, the first clerk she handed it to swiped it too many times, setting off a "potentially fraudulent activity" alert and disabling (temporarily) the card.

My wife quickly called the bank and got everything straightened out. Despite her minor inconvenience, we were both glad our bank has adopted such strict measures in order to protect their customers from the fraudsters among us. It also got me thinking how we could expand this policy to many other situations.

The first anti-fraud policy I would implement: Make salesmen wear a portable lie detector, with a little "B.S.-o-meter" attached to their forehead. Imagine shopping around for a used car for one of your kids: "Does this car have a good safety record?" "Oh, absolutely, the best in the busi..." ZAP! The B.S.-o-meter pegs and electroshock therapy is administered posthaste. Fraud averted!

Next, I would require all first dates have a 'chaperone' for each side. Several of my close friends have gone through divorce in the past few years. When they finally asked me my no-holds-barred opinion of their ex-wife and I responded I never really liked her, the response was always the same: "NOW you tell me!" With the help of a best friend, you can now see through all the phoniness and "best foot forward" crap that comes with every first date. The friend can chip in his or her two cents BEFORE rings are exchanged, funds are intermingled, and all those annoying behavioral quirks become insurmountable relationship terminators. Notice the spirit of fairness, in that both sides have an advisor at the first meeting. Fraud averted!

Finally, think about a bad investment you've made. Whether it was greed on your part, deception on the (financial advisor's, Realtor's, stock broker's, insert other profession here) part, or a combination of both, the anti-fraud initiative here is very common-sense: If it sounds too good to be true, IT IS. Notice I didn't insert the word "probably" between "it" and "is". C'mon, you wanna take issue with that statement?

Sure, go ahead and throw out buying Apple, Microsoft, or Google stock back when they were in their infancy. Or buying real estate in 2004 and selling it all in 2006. In hindsight the investment looks brilliant. But how confident were the investors in the moment that they'd ever see their money again? Those companies were start-ups! Real estate was still going up when investors needed to sell out! I highly doubt any early investors bought in and said "this seems too good to be true". Instead, they were probably crapping their pants and crossing their fingers!

Conversely, think about those investors who entrusted their money with Bernie Madoff. THEY were the ones saying "this seems too good to be true!" AND IT WAS.

Yep, I learned that last lesson the hard way. Chances are a lot of you reading this have learned a similar lesson. So before you start asking car salesmen to wear a lie detector or bring your buddy along on a date, look first to COMMON SENSE - it will never betray you!

Make it a great week.


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