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October 2022 Newsletter

Pig Butchering and other nasties – it is not what it seems

Hello Everyone

I just read in the Financial Times a short notice that stopped me as it related to a couple of recent client calls, so wanted to also alert you all.

The FBI has issued a warning against “pig butchering”. It’s not a form of animal cruelty but usually involves scammers making contact on social media or dating applications, gaining their trust before persuading victims to make deposits into fraudulent crypto schemes.

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Coincidentally a few weeks ago a female client called me and said that she met this great guy online but now he keeps going on about cryptocurrencies and how my client should invest in these. It was clear that there was something not quite right as even a ‘normal’ crypto addict makes a very dangerous partner as their finances are likely to be in disarray a lot or even permanently. After our conversation my clients could read the signs and terminated the connection, which was painful but in the light of the above my client might have just escaped something much nastier.

Another client didn’t ring me and sent somebody she didn’t know $2,000 dollars, a bit more than was comfortable. The moment she made the transfer she realised that she was being scammed.

A popular trick that has become proverbial in Germany as it is so common is the grand-child trick. A person shows up at an older person’s home or calls them, saying that they are their grand-child or their child’s husband or wife and they are in hospital and immediately need money to be sent to them or to get the person’s credit card so they can pay their bill. Something similar happened to at least one client in Australia.

A decade ago a friend of mine met the most amazing guy online and they went out for two years until all her savings of $200,000 were gone. She never told me about it until afterwards.

When I was 24 and just arrived in Australia and earning good money as an IT specialist a friend of a friend approached me about investing in foreign currencies as the Australian dollar had just been allowed to float freely against other currencies by the Hawke-Keating government. I said ok, I will invest 3 weeks’ of earnings and went to the brokerage to sign the agreement which I hadn’t seen until then. I read the agreement and it showed that 90% of my money would go in fees and only 10% of my money would be invested. In other words, my currency bet would have to be super successful – 10-folding my money for me to just break even. I didn’t like that but something strange happened at that moment – the ‘friend’ of a friend bullied me by demanding that I sign – I can’t remember the reasons he gave but the key lesson was that I could be bullied because I actually signed. Of course, that money was gone but it was, dollar for dollar, the most valuable lesson in my life, showing me that I could be bullied and I never allowed that to happen again.

For all my clients there is one thing to remember – before you give money away you are not entirely sure about, call me. When in doubt, call me. When you are sure it is all ok, call me as we can be momentarily blinded into thinking that up is down, left is right, green is red and the nice person on the phone is really due this large sum of money.

The key is to be aware that we can be completely blind and never, ever send money to somebody new without having spoken to a friend or your adviser first and, most importantly, to accept that we can be scammed by the right combination of words, trickery and bullying. It is important to sometimes be somebody who makes another person (the scam artist) very angry or seemingly very hurt and to still not do what they demand. Better their anger than your money – because if it works for them they will have a strong incentive to try again.

We are only a phone call or email away and always delighted to hear from you.

Christoph, Nicola, Marian, Clare, Deryk, Alvin and Jade

Christoph Schnelle
Financial Adviser and Life Insurance Specialist
AFP LRS GradDipFinPlan 
Life Risk Specialist | SMSF Specialist Advisor
MBiostats | GStat Graduate Statistician
Accredited Aged Care Professional
Accredited Estate Planning Professional
Authorised Representative 308223

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