The Facebook scam

by Tony Levene on 19 May 2012  |  15 comments
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Anyone offering to make you a 'Facebook fortune' is probably a scamster.

It's almost impossible to escape Facebook. Whether you like or don't like the social media site, only those locked away in darkened rooms will have a Facebook-free weekend.

Facebook is all over the news because founder Mark Zuckerberg and his close comrades are about to cash in.

The company is about to float on the US stock market where it's set to be valued at more than $100 billion.

Where the price goes from there is anyone's guess. Some social media valuations have soared after initial trading – others have sunk. But whatever happens, Facebook's founding fathers are fabulously wealthy.

Email

And now the emails have started...

I received one a few days ago headed “Facebook fortunes – now make your own”. I am not too sure about the grammar but the intention is clear. I too can become rich just like Zuckerberg.

Headed “Hi tony” (the writer obviously forgot the shift key in her haste to get the message out so my name lost its capital letter), it quotes a recent article in the Daily Telegraph which says that all you need to do to make a massive mint is to design an app.

I can't find this piece but I am sure the Telegraph, in common with all media, has at some time pointed out the big money some have made from designing applications.

Now I don't have a clue how to design an app and the only idea I have is for one that sends out audible scam alerts (such as a scream or the phrase “don't do it” at 120 decibels) when you receive a dodgy email or text. But even if I could, I know that my chances of a fortune are still very limited. It's like writing a book – huge numbers are published but the chances of a Harry Potter jackpot are infinitesimally small..

This cold reality is at odds with the email which informs me that “apps are selling like crazy at the moment.” A few are – but lots are free, such as the one that finds your nearest hire bike docking station in London.

Now you may be thinking this is leading to an App Builder where, in return for £50,000 or so upfront, someone will take my idea and put it on a smartphone.

Wrong. It even suggests that the “app craze” may not last the year. Sue, who writes this email, admits that no one knows.

Attention grabber

All this stuff about apps and Facebook is just an attention grabber. It all leads up to the sucker punch – you don't have to be Zuckerberg to make a fortune with your computer. You don't even need to have an “app” idea.

Instead with the internet, “the ordinary guy in the street can take charge of their own life and start their own businesses.”

Do you get the feeling that we have moved from Facebook to get rich quick scheme territory? I do.

The email continues: “All you need is a laptop connection and that’s it. You could be sat on the beach…Under the shade in your garden… On holiday somewhere… and be making money.

No boss to answer to. No commute. No office politics. No limit on your earning power. You’re in charge of your destiny.”

Seen words like those elsewhere? Yes, they are all out of the “becoming wealthy is a piece of cake if you follow my recipe” textbook. These are classic warning signs.

So grabbing attention with the Facebook IPO, where do we end up? Stock market trading.

If I go on a short and easy to understand course (it costs £9,999 plus some “relatively inexpensive software” but there's an easy instalment plan) I can become a stock market trading genius.

Why would anyone go to the bother of writing these emails and flogging these courses if they were “stock market trading geniuses”? They should be out there making millions.

High risk

I've looked at this course. It involves high risk, high frequency trading, based on futures and options. These strategies are “geared” - you can turn £1 into £100 if you pick the right deals, but it is just as easy to bet £1 and lose £100.

And if you want to see just how “simple” trading is, take a look at that other big recent financial story of the week which my email, unsurprisingly, ignored.

Investment bank JP Morgan lost $2billion on trading designed to “hedge against risk” . Now if these people with all their resources can drop that sort of cash in a few weeks, it puts your chances of easy quick money via trading into sharp perspective.

Put crudely, it's easier to make money selling stock market courses than trading.