Fraudsters and your ideal best friend
Imagine that you could invent your own best friend. What qualities would you like in them? No doubt they would be bright, interesting, loyal, friendly, helpful to others, a contributor to the welfare of society, and have a host of other virtues to make them desirable as friends.
Now imagine that you were a fraudster. What qualities would you like to project to your potential victims? You would doubtless want to appear to be bright, interesting, loyal, friendly, helpful to others, a contributor to society, and have a host of other virtues to make you desirable as a friend.
It is obvious that bad guys – particularly in the movies – will be obvious bad guys, but it is our considerable experience that a successful fraudster will rarely seem like a bad guy.
Think of it this way. Imagine that you are walking down the street one evening, having had a few beers with your friends, and see someone playing three-card Monte. You decide to amuse your friends by betting five bucks. When you lose, are you surprised? We hope not.
Now imagine that you have to make a decision about investing your life savings, or a substantial amount of money for a charity, or a large sum of money for your company. Are you likely to do it with someone who gives the impression of being a three-card Monte dealer? Not a second time, and probably not even a first time!
Most of us are comfortable in different situations with different kinds of people. And in general, most of us prefer to deal with people we like, independent of the situation. And in fact, most of us make a big effort to try to deal with people we like. Now, obviously, this is going to mean that we deal with people we like during honest dealings, and people we like in dealings where we are being victimized. Only we won’t realize we are being victimized until after the fact, and we will rarely admit it when we have been victimized, even to ourselves!
Does this mean that we should stop using liability as a criterion for doing business? No it merely means that the appropriate exercise of due diligence is important even when doing business with people we like.
The key to due diligence is to do due diligence.