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How The Law Handles Fake Financial Gurus

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Written by   157
1 week ago
Topics: Business, Savings

Because financial gurus are often looked upon by people as both superstars and greedy opportunists, governments are also doing their part of scrutinizing them. Over the years, even before the internet became very accessible to people, there have been issued lawsuits that are purely focused on get-rich-quick schemes.

The Case of Frank Kern

In November 2011, the Federal Trade Commission of the US investigated and dissolved a group called Grand Connect. The government issued a $29.8 million judgment. Another famous case is about Frank Kern, the author of Instant Internet Empires, one of the most prominent internet gurus of his time.

In his money-making program, he sold a collection of 47-dollar web templates that promises the buyers to make more than $100,000 a year using his products.

Frank Kern

The FTC has been really clear about its rules about the issue. It states that any business with marketing claims that people can make a certain amount of money for a specific number of days must provide documentary proof that people can really make that amount.

This could include receipts, financial statements, reports, or anything that can prove the money-making potential that anyone can do. In 2019, the FTC also shut down real-estate seminar schemes that promote the selling of real-estate properties involving some celebrities.

The program has the catchy promise of letting people get direct tips from the celebrities themselves. By having a quick analysis about it, we can easily determine that the allure of the program lies in the fact that you get to talk to celebrities, not on the fact that they can give real tips that actually work.

Clearly, such a marketing tactic will provide biases and sill surely result in unfair advantages to the program facilitators. When left alone, those who provide real legit tips will find it hard to compete against those celebrities.

While using celebrities as endorsers isn’t really a bad thing, what the FTC disliked about it is that the seminar asks for a $1,100 fee for a 3-day seminar – a bit too overpriced for a typical learning class, especially since there is a pitch for another set of seminars which costs another $40,000. By asking some participants, it was revealed that the seminar offered nothing but very generic real-estate tips.

Why scamming is an unkillable monster

Although there are a lot of actions taken already by the government, a handful of scammers still get away with it. Again and again, they still continually prey upon people, making great amounts of money along the way. To combat them, it would be good to have some collaborative citizen action.

You could take part in it. If you are seeing a money-making organization that has the makings of a scamming group, you should directly report it to FTC, or to the nearest government office near you.

The smart thing about get-rich-quick schemes is that they are like multi-tentacled organisms. Once you cut off one tentacle, the others are still able to function. What’s even sadder is that as you make your move in cutting the other limbs, the ones you were to cut will still grow back and evolved into another, unrecognizable form.

According to high-ranking FTC officials, a lot of online fraudsters today employ tech-savvy people to appear very legit and so they can cover their tracks to maintain their supposed authenticity. The network they are able to create is very huge, and they indeed have a great number of followers.

But the problem is that most of these followers and members are not really earning at all. The ones who are really benefiting from it all are those at the center of the operation or those who were there during the founding of the group.

The law has difficulties battling scammers

What makes it very difficult for the law that might employ the very best investigators is that there are so many fronts to online scams. Many internet gurus use lots of websites, social media pages, Youtube channels, and various online platforms where they can showcase their fraudulence.

Furthermore, they will also embellish their systems with legit aspects that they can find some legal basis for. Once those things get registered and approved by law, they can hold some papers that can prove them to be real, though, at the core of their operations, they are actually flat-out scammers.

Another problem that the law has in combating online scammers is that most lawmakers are actually “internet-ignorant.” Most of these political leaders don’t really know that much about digital technology and the technicalities behind them.

In effect, they can’t really rule out judgments and decisions based on actual facts that pertain to what’s really going on within the digital realm. Some crimes appear too grave for them, though it’s just a minor problem. Consequently, some offenses could be very huge too but would end up as minor ones because of the lack of technical knowledge among lawmakers.

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Written by   157
1 week ago
Topics: Business, Savings
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