Scams always require two components: the media and the message. CPAs are indoctrinated with specific education and are required to maintain an attitude of “professional skepticism”. As a result, I tend to be more likely to notice and document emerging dangerous trends. Based on this experience, I’ve covered online consumer finance scams1 in this blog for more than two decades. Here are two of the latest:
The media that I cover is almost always online media: email scams, social media campaigns, hackers, etc. The days that we must talk about the risks of buying medicine from door-to-door salesmen are fortunately a thing of the past. Certainly scams happen through other media but for me it’s all about online scams.
The message usually involves something new and something in the news. It often incorporates a component of greed (that makes us set aside our caution and sense of reason). The most common approach is to load us with information presented as fact that sounds reliable and piles up to build an overwhelming case to support the new idea. We see this every day with coverage in some news channels.
Two of the latest scams surround cryptocurrency and tax reform. I learned this morning that someone attempted to spoof my web domain to send spam email with a subject line “This crypto coin could go up fifty thousand percent this year”. There is no way to stop spoofing (sending an email saying it comes from someone else). I am sure that there are people so eager to get into cryptocurrency that this approach works. I can only hope that they don’t do it from the false assumption that my firm is associated or endorsing the offer. Last night I heard a bright young man begin his argument to a general proposition by citing an example from the cryptocurrency world. The flaw in logic didn’t occur to him.
The tax reform scam typically involves ‘normal’ businesses that are looking for a way to position their product for more sales. It is common for businesses to use variations of terms in current discussion for their own purposes. In some cases these firms obtain trademarks in an attempt to legitimize their offer. My own firm has used this strategy and so I share that story here as an example of the twist in logic. While no scam was intended, my registration and commercial use of the trademarked “Online Navigator” in 2012 was criticized by some because the term ‘navigator’ was associated with a government funded and supervised program under the Affordable Care Act whereas my service was a commercial service not affiliated with government. This morning I noticed another advertisement saying “medical expense reimbursed insurance”. What does that mean? You won’t find this term in the law but the marketer is using it to sell their service. Yet this is the perfect time to market such a product or service that can play off the impacts of tax reform. We will likely see an explosion in tax shelter sales with similarly confusing wording as the next wave of this online marketing trend.
Be careful out there!
1 The term ‘scam” as used here refers to an exploitation of logic or psychology to promote a product or service. It is not intended as a commentary on the product or service itself. This blog post is not a critique of any product or service.