Hi I'm Rick Kahler, thanks for joining me.
Earlier this year, 158 expat Americans
living in San Miguel de Allende, Mexico, found out
that an employee of Monex Bank
had emptied their accounts of some 40 million dollars.
Many of the customers lost their entire
retirement savings. The employee, well she had worked
for the bank for 20 years.
Apparently she'd been siphoning off money from
accounts for months and sending the depositors fake
statements to cover the disappearing funds.
According to an article by David Welch that appeared in
Bloomberg Businessweek on May 23rd, 2019,
the banker had promised these depositors
fat returns in investments that would be
immune to the pesos fluctuations.
Such promises are common to many fraudulent
schemes where investors are duped out of their money.
In this case, the all-too-familiar scam of promising
returns too good to be true was
promulgated by an employee of an international bank
with assets of 5.2 billion dollars. Even more unusual
is that while the bank said they would make
their customers whole again only one
of the 158 had received all of his funds back at
the time Bloomberg published the article.
And a bank employee admitted that was a mistake and
asked the depositor to send back a portion of the check.
One of the defrauded investors was quoted as saying,
"Part of this is my fault.
I wasn't even remotely suspicious."
Such trust is exactly what scammers and con artists
rely on. The most important vulnerability they exploit
is ignorance. We tend to think of financial predators
taking advantage of the poor, the elderly,
and the uneducated. To some extent,
this is certainly true but the poor have no
monopoly on financial ignorance.
In order to make money from their schemes
scammers need to target people with enough money
to be worth preying on.
The ability to earn a lot of money
and the ability to manage that money wisely,
do not necessarily go together.
The infamous Bernie Madoff remember
cheated some wealthy and sophisticated investors
out of millions. Some of the
qualities that make us vulnerable to financial predators
come from our own human flaws.
We'd all like to believe those promises of faster,
easier ways to make a lot of money
or save a lot of money. Some of our vulnerability,
though, comes from our best selves.
Scammers exploit our willingness to trust and
even the integrity that can lead us to
assume others are as honest as we are.
Protecting yourself from financial predators requires
being honest with yourself about the qualities
that make you vulnerable. It also requires a
willingness to take action to protect yourself
in several ways. Here they are.
First, acknowledge what you don't know
and ask for advice from someone who has nothing
to gain from whatever decision you make.
Educate yourself from neutral, reputable sources.
There are countless websites, books,
classes, to help you learn about investing
and managing money.
Next, listen to your own feelings.
If anything sounds too good to be true,
you probably know at some level
that something just isn't right and the wise
choice would be to say no
or certainly to sleep on it or wait until you get
more information. To that, channel your inner skeptic.
Anytime someone offers you an incredible opportunity
to make a lot of money,
ask yourself what's in it for them.
Chances are they're working for themselves, not for you.
And last, pay attention. Read the fine print .
Read account statements. Ask questions.
If your queries are brushed aside,
be willing to be the difficult customer who keeps asking.
And finally, don't be your own worst enemy.
Don't trust blindly. Don't assume that someone else
is going to look out for your best interest.
That responsibility ultimately is always up to you.
Thanks for listening.