Real world: Scams and Fraud

0:00(keyboard keys rattle) (device beeps) - [Rusty] All right, I'm in.

0:05- [Danny] You got the logo and everything?

0:06- [Rusty] Bingo bango. No more "Khan Academy", hello "Con Academy".

0:10- [Danny] Scams and fraud, that's our business. What's on the docket?

0:13- [Rusty] Off the top of my head, we're looking at a multi-level marketing pyramid scheme, a bad check scam, and phishing.

0:20- [Danny] In a world of infinite career possibilities, it was inevitable that some people would turn to crime. I'm Danny, that's Rusty.

0:27- [Rusty] Yo. - [Danny] And we're Con Academy. As in confidence tricks, as in scams. We'll go through a handful of the most popular ones, pyramid schemes, check cashing scams, and phishing attacks. Let's start with the pyramid scheme. And you know what? A quick little doom scroll can explain it better than I can.

0:46- [Crypto Carl] What's up, poors? This is Crypto Carl coming to you live from the SS Diamond Hand, making that paper and stacking those Lambos. You wanna work like a simp? That's not very alpha of you. Passive income is the way to real wealth. Learn from your boy Carl by signing up for Shark School.

1:03Link in bio. - [Bestina] Hi guys, it's Bestina here with another haul of sick stuff that I got for free from Hyper Face Cosmetics. If you wanna learn how to be an influencer and make mad bank, check the link in my bio.

1:20- [Influencer] It's a protein shake, it's a legging, it's Flexstar, and it'll make you rich and hot and yolked, baby. Become an affiliate by following the link in my bio.

1:30- [Danny] Sound familiar to you? - [Rusty] Man, if I had a nickel for every time I saw one of these, I'd have, like, 40 bucks.

1:35- [Danny] And that's more than you'd make being a Flexstar affiliate. That's the real trick. They're not just selling stuff, they're selling a system. A system that looks like a business, but it's really just a con in a tracksuit.

1:46- [Rusty] So all of those are pyramid schemes?

1:48- Oh, yeah. They dress it up with buzzwords. Entrepreneurship, passive income, social marketing, but it's the same old trick. Stack people underneath you, get them to pay you a percentage of their earnings and ghost everyone before the foundation collapses.

2:03- [Rusty] Okay, but how does it actually work?

2:05- [Danny] Let's take the crypto one. That one's slick. You start by buying a course, like $99 to learn the secrets of crypto, but it's nothing. It's on content. A bunch of videos telling you to stay positive, buy the dip, and post motivational quotes on social media.

2:22- [Rusty] So now I'm in for a hundred bucks and I haven't made any money.

2:25- [Danny] That's when they invite you to invest $250 through their exclusive platform. Banks don't tell you about it. Your financial advisor doesn't want you to know about it. Totally private. Unbelievable returns on investment, except it's not regulated, because it's not real.

2:43- [Rusty] So they just take your money? - [Danny] Not yet. First they fake your balance. You log in and boom, your 250 magically turns into 3,000. Then they say, "Wanna make even more money? Easy. Refer a friend. And if they refer people, you get a cut of that too."

3:00- [Rusty] So why do they call it a pyramid scheme?

3:02- [Danny] That's the shape of the con. One person at the top, everyone else forming the base. Money flows up, risk flows down.

3:11- [Rusty] But where does the money come from?

3:12- [Danny] It comes from the recruitment. It takes a whole bunch of new marks continually feeding money into the scheme, because the only way you make back your money is if you convince other people to join and they have to convince their people and so on until you run out of people, which you always do.

3:29- [Rusty] Meanwhile, the Pharaoh over here at the top of the pyramid's making out like a bandit.

3:32- [Danny] And when the recruitment slows or stops, guess who's taking all that money out of that exclusive investment platform and flying to Singapore?

3:39- [Rusty] Gotcha. So how do you spot one of these scams?

3:42- [Danny] Look for the telltale signs. If they ask you to tell your family and friends, or if they tell you, "Here's what your bank doesn't want you to know." Or if it reads, "DM me to learn how," it's a pyramid scheme. There are no secret ways to legally make money.

3:56If they worked, they wouldn't be secrets.

3:58- [Rusty] Amen to that. - [Danny] What's the next scam?

4:01- [Rusty] I want to talk about check cashing scams.

4:04- [Danny] Our bread and butter. - [Rusty] Many different ways to run this con. One is the "bank error in your favor" scam.

4:10- [Danny] Like the "Monopoly" card. - [Rusty] I did this once to an old guy in Tampa. He had put up a beautiful office chair for sale on an online marketplace. I wrote him and I went, "Aw man, that is the perfect chair for my office. I'm out of town right now, but is it okay if I mail you a check from my business account?"

4:26The guy goes, "Sure, that's fine with me." I mail him a check, but it's $200 more than the asking price of the chair. And it's a fake check, but it looks legit.

4:36- [Danny] You sent him too much money? - [Rusty] Baiting the hook. And the guy goes, "Hey, you sent me too much money." I say, "Oh geez, Cynthia in accounting must have made a mistake. Why don't you go ahead and deposit the check, you can send me back the difference.

4:49I'll be back after this weekend and I'll pick up that chair from you." Guy goes, "Yeah, fair enough." And he deposits the check and sends me $200. The weekend comes and goes, I don't show up, the guy's bank tries to process the check and realizes it's not legit.

5:05The guy's bank reverses his deposit. - [Danny] So now he's paid you 200 bucks.

5:10- [Rusty] Yeah, and all I did was send him a piece of paper that looked like a check. Now a false sense of urgency is the trick here.

5:18- [Danny] Why is that? - [Rusty] The bank will say, "Hey, that sounds suspicious. Why not void the check and have him send a new one?"

5:24- [Danny] Smart move. - [Rusty] You wanna. You wanna tell them about the phishing?

5:28- [Danny] Yeah, and that's phishing with a PH.

5:30- [Rusty] All right, how will we teach this one?

5:32- [Danny] Easier if I show you, Rusty. (cellphone vibrates)

5:34- [Rusty] Ooh, I got a text message. - [Danny] Yeah. Who's it from?

5:37- [Rusty] Unknown number. - [Danny] What's it say?

5:40- [Rusty] "Amazon order confirmed. 80-inch television on its way. To see ordror status, click here." Ordror? Click here and then there's a link.

5:49- [Danny] You're gonna wanna open that link there.

5:50- [Rusty] Am I? - [Danny] Oh, yeah. - [Rusty] All right, it looks like just a standard Amazon page, wants me to just log in with my email and password.

5:59- [Danny] So that looks like the standard login page, but it isn't. Enter your password.

6:02- [Rusty] Why would I do that? - [Danny] Just do it. (keyboard clicks) (bell dings) And now I've got them on my device.

6:10- [Rusty] Got what? - [Danny] Your login information. Your payment information.

6:13- [Rusty] What about my 80-inch TV? - [Danny] There was no TV. Did you order one?

6:17- [Rusty] No, but I thought I was maybe getting something cool by mistake.

6:20- [Danny] That's how they get you. It's called a phishing scam, and the goal is to get your login information, because then I can get access to your credit card and order myself all the stuff I want.

6:32- [Rusty] Devious. - [Danny] Yeah, change your passwords.

6:34- [Rusty] But what's up with the typo? I think it said ordror?

6:37- [Danny] Yeah, that's pretty common. Throw in an obvious typo, so you filter out the people who are naturally suspicious.

6:42- [Rusty] People fall for this stuff? Like, smart people?

6:45- [Danny] Every day. Great scams leverage trust and institutions and get people. The trick to this one, just like with the check cashing scam, is to pull it off before your target has a chance to think about the message too hard. A good scammer strikes while the iron is hot.

6:59If you get a suspicious email or text message with weird misspellings, confirm with the person who sent the message via another method. You get a weird email, call that person and make sure they sent it.

7:09- [Rusty] Trust, but verify. - [Danny] Uh-oh.

7:12- [Rusty] You hear that too, right? - [Danny] It's all right, we got what we came for. Close the connection.

7:16- [Rusty] You can learn anything. - [Danny] We're out. (upbeat music)