It’s Consumer Fraud Week

 

3 Kinds of Fraudsters

It is National Consumer Fraud week. It appears we are wising up. According to the ACCC scam reports have doubled from 2009 to 2010 but money reported lost has decreased slightly. This is good news. But that doesn’t mean other kinds of fraud have decreased.

You should report a suspected scam to scamwatch.

When we think of scams we usually think of smooth talking professional predators peddling investment schemes and stealing identities. Or we think of badly worded emails.

The truth is business fraud is most often committed by employees taking an opportunity. This can be by shoplifting, padding expense accounts, pocketing sales proceeds or stealing customer credit card numbers.

However, there is more to it.

I have identified 3 kinds of fraudsters:

1)      The Predator – who makes a career of taking your money dishonestly

2)      The Opportunist – generally an everyday person who will take advantage of an opportunity. It might be as “Australian” as offering or accepting “cash jobs,” it could be applying for flood relief when they were not really inconvenienced or could afford to replace their own perishables, they might discreetly remove the tip on a restaurant table before the waiter returns.

3)      The Cracked Egg – These are the people who are good, decent people but circumstances in their lives create pressure that causes them to compromise their values. These could be someone with a gambling addiction or drug habit. It could be a battered wife who has no resources. It’s often someone who sees no other way out.

Solutions

Be vigilant. Create or adopt systems and accountability in your business and in your personal life that protect you. People do not do what is expected, they do what is inspected.

Be aware of areas in your own life where you could be vulnerable to pressure or temptation. If you think you are immune, you are immediately vulnerable to either being ripped off or compromising your own ethics or morals.

Customer service is the best strategy against shoplifting. Knowing your employees is the best strategy against their ripping you off. Have a “care” program that supports them. It might be checking on them when they are “sick” or being flexible with single parent pressures. In a less formal light, get to know them as people, care about them so that you are aware of the pressures in their lives and can help. Maybe YOU will prevent them making a decision that ruins the rest of their lives!

If you would some direction in this area you can contact me.

More detailed keys in fraud prevention and recovery are in my book “Dangerous Wealth.” Purchase a physical book for $25 plus postage or save time and $ by ordering the eBook or audio book here for just $20.

If you would like me to talk to your group about Powerful Perspectives for Business and Life please visit my contact page.

Wedding Plans? 11 Money Saving Tips

 

Would you pay $33,000 for your wedding? According to a survey on  www.i-do.com.au that is the average investment couples are making these days! 

That’s as much as you’d pay for a brand new family car or even a house deposit!

Planning a wedding is a wonderful, exciting time but excitement can blow your budget if you are not careful. Here are 11 strategies that will help you avoid spending too much or being taken advantage of.

 

1) Remember, the Number One Rule in investment or business applies to weddings as well…

 “Never invest more than you can afford to lose”

 

 2) Time frame. The earlier you plan, the better. Pencil in check-in dates with your providers to keep them on track. Last minute short-cuts create potential disasters such as dress seams coming apart.

Early planning gives you time to compare quotes so you don’t get overcharged. Remember, as soon as you say “Wedding” a premium is added to the price, even for a blow-wave!

 

3) Recommendations: Ask your friends, family and workmates about who they used for various services providers and were they happy? Often venues or providers will provide recommendations too.

 

4) Due-Diligence: How long have they been in operation? A “combined 10 years experience” means nothing if they have 6 people involved including their mother and the family pet. You want to know the experience of the actual person serving you.

Can you speak with previous clients? (Remember, they are not going to refer you to the unhappy ones)

See if they are listed on ASIC’s banned director’s list.

Google them for reviews.

A wedding planner can be a helpful resource because they usually have established, reliable providers. Of course the wedding planner could be dodgy too.

Ask for their resume or CV as well as examples of their work. Fly-by-nighters will not have these or wish to give them.

Remember, you are employing these people, even if only for 1 day.

Ask them to provide a statement of solvency from their accountant.

 

5) Budget. Don’t spend more than you can afford, but also don’t expect great quality from a budget provider. At the lower end, talent is a bonus. Deposits are usually non-refundable so choose carefully before committing. Do not pay in full until required.

Beware of utilizing Uncle Harry to save money, if it goes wrong it can cause a big family rift.

Don’t get carried away by smooth talking salespeople. It’s called up-selling. Sometimes they will offer something unrealistic as an up-sell. You pay and they cannot deliver. Some providers will say “yes we can do that!” just to get the business and hope they can pull it off.

Who is paying for what? Be clear about this if your family has promised to help out.

 

6)  Trust account: With weddings costing tens of thousands, it would be wise to utilize a solicitor’s trust account until the wedding. This can protect the provider too because they are often ripped off by couples who will leave a deposit and then run out of money.

A wedding or trust account is a good place to put money promised by family. If alcoholic Auntie Sue promises to “pay for the drinks”, get the money well before hand in case it’s not forthcoming when required.

Only ever pay providers a deposit to start with.

 

7)  Backup Plan: Ask the service provider what their back-up strategy is if something goes wrong.

Do they have insurance?

 

8 ) Get it in writing and read the fine print: Be very clear about what you are getting, what you are not getting and any optional extras.

For example, who will be the actual person serving you? Leading photographers sometimes send along underlings in their place. Read the contract, is the person named? What back up strategy do they have if the person leaves the company or otherwise cannot be there?

Is the provider contracting out the job? If so, consider where that leaves you if the secondary company does not perform?

Using a DJ? Choose the songs or check the list to make sure it’s compatible with your celebration.

 

9) Make-up and hair: Have a full make-up and hair rehearsal months earlier so you are happy with your look. If you are happy, get the contact details of the actual consultant in case they leave the salon. Require the salon to give a complimentary 2nd rehearsal if a replacement consultant is required.

 

10) Stick to your plan. If you must change your mind, put it in writing so the relevant provider is up to date with your latest whim. Dressmakers invest in material so if you change your mind or dramatically change your weight, expect to pay extra.

 

11) Be flexible: Not everything is going to go as planned. Have a sense of humour. Often our fondest memories are of things that go wrong. Who knows, you might have something worthy of Funniest Home Videos.

Deal Breaker VS Preference

Remember Jack and the Beenstalk? Jack spent the grocery money on what he believed were magic beans. He wanted them so badly he compromised everything to get them. It’s lucky for him things worked out but he went through some tough battles he didn’t expect before that happened.

Normally a motivational speaker would use this illustration to encourage you to chase your dream no matter what the cost. That’s fine if you live in a fairy-tale like Jack does. However truly successful people “count the cost”.

Successful people decide what the deal breaking aspects of a transaction are and what preferences they might be prepared to compromise on. Knowing which priorities fit where is essential. The only way to do that is to have enough passion for the deal to pursue it, but still keep a cool enough head that you don’t lose perspective.

When buying a property it is important to know what features you are looking for before investing your money. I cannot expect a three bed, 1 bath home on a small block to return the same rent as a larger home unless there were other features to compensate, such as location.

Know what you would like but be flexible. Make a list of qualities that are deal-breakers with another list of preferences. For example, “must have 4 bedroom” could be a deal breaker unless there is room to renovate or turn an office into another bedroom. A particular suburb could be a deal breaker and the individual block or street might be a preference within the essential suburb.

When we buy a house we have a checklist of features and a checklist of warning signals. For example, getting a building and pest inspection warns me of any hazards that I can choose to either A) ignore B) treat or C) exit the deal D) Renegotiate the contract.

Where we come unstuck is when an aspect of a house or deal is so attractive that we compromise too much on the preferences. Given time, what you thought was tolerable could make you miserable and become the reason you sell later. I know people who have fallen in love with the space an acreage property gives them and then sell within a short time because the upkeep was too demanding.

More common is the situation where people borrow to the maximum for their dream house and within 2 interest rate rises or the arrival of a baby, they can no longer afford the repayments.

A business deal or job requires the same delicate balance of essentials vs preferences. Don’t fall in love with one aspect so deeply that you later regret the ground you gave.