Free Lunch?

Other topics that are not covered in the sections above.
Stevemul
Resident
Posts: 260
Joined: Fri Nov 23, 2012 2:43 pm

Free Lunch?

Postby Stevemul » Sat Jan 28, 2017 9:33 am

About 2 years ago, some very good friends came to us rather distraught because they appeared to have been victims of an investment scam. They had invested a large sum before the recession with a Financial Advisor recommended through the friend's golf club. For the past 8 or so years since making the "investment", they had continued to draw 7% " profit" annually from their fund and were devastated to find that their "pot" was now virtually worthless. Whilst being sympathetic to their plight, I did wonder how they ever thought that they could blindly continue to draw this "return" through the massive downturn in interest rates and poorly performing stock market through the recession. Their attempts to get recompense from their Financial Advisor for mismanagement of their money came to nothing as he was unregulated.

Yesterday, the husband of the couple came around to ask my advice on opening a web based banking exchange rate account. He wanted to change a substantial sum of Euros to Dollars to send to a U.S. based "Futures" Fund.

After a little digging and prompting he disclosed that the Fund had promised a 170% return on his investment! I offered to Google the Company to examine it on line but he said I couldn't because it was " by invitation only". He said he would " prove" to me that it was true by me giving him €100 Euros which he would return to me in 12 weeks along with €170 " profit". He said he had already done this himself so he knew it was genuine!

No amount of my disbelief, " no such thing as a free lunch " , do not believe it, etc etc would convince him to beware so I fear he will do this. What should I do?

User avatar
peteroldracer
Andalucia Guru
Posts: 7774
Joined: Wed Oct 13, 2004 5:56 pm
Location: Los Alcázares, Murcia

Re: Free Lunch?

Postby peteroldracer » Sat Jan 28, 2017 10:16 am

"What should I do?"
Nothing. We have friends who got into something sounding similar. When they tried to get us to join in I told them firmly that we were not interested, and that it would be a scam. They kept on every time we met until I just said they had two choices - either stop seeing us, or simply never mention this scam again.
Since then, we still see them, him working as a jobbing builder, she cleaning houses, driving a 1990s 4x4 and perpetually broke or almost so, rather than the "holidays in Bermuda, second house in Turkey" lifestyle they had convinced thenselves they were going to have.
Just keep away from it yourself, as it sounds you will do.
I used to cough to disguise a [email protected] I f@rt to disguise a cough.

Unicorn
Resident
Posts: 1670
Joined: Sun Jun 30, 2013 5:06 pm
Location: Estepona

Re: Free Lunch?

Postby Unicorn » Sat Jan 28, 2017 10:32 am

Sounds to me like a pyramid scam.

The MO is to get you to put a bit in and give you a quick return and then entice you to put in more and eventually it collapses.

Playing Devil's advocate, your mate could be a part of it, knowingly or unknowingly - but obviously I do not know the person (as far as I know)...................

Stevemul
Resident
Posts: 260
Joined: Fri Nov 23, 2012 2:43 pm

Re: Free Lunch?

Postby Stevemul » Sat Jan 28, 2017 10:40 am

I have no intention of joining! I told him that I subscribe to the theory that the definition of a Stockbroker is " someone who invests your money until its all gone"
My question What should I do? relates to how do I stop HIM from a doomsday?

Unicorn
Resident
Posts: 1670
Joined: Sun Jun 30, 2013 5:06 pm
Location: Estepona

Re: Free Lunch?

Postby Unicorn » Sat Jan 28, 2017 10:55 am

Steve, you can only say your piece. He is an adult. You can take a horse to water etc.

Maybe, if he is insistent say to him to keep putting 100 in and getting 170 out and the minute that stops he should stop.
(People get drawn in by the con person saying you have to do such and such immediately or by a date.)

Maybe that is the best advice you can give him?

I think it is a bit like taking sides in a divorce, if you stop him and it allegedly makes money it will be your fault.

Why not say that you are no expert in dollar dealings and suggests he asks elsewhere, otherwise the friendship will go west.

I would like to see your description of 'financial advisor' or, indeed, 'life coach'!

User avatar
costakid
Andalucia Guru
Posts: 5754
Joined: Sun Feb 13, 2005 11:55 am
Location: malaga este

Re: Free Lunch?

Postby costakid » Sat Jan 28, 2017 10:58 am

Some people never listen. I have a friend who on more than one occasion has asked " what do you think of this", i have said I wouldn't get involved and he has ignored my advice. Why ask?? Beggars belief.

User avatar
Devils Advocate
Andalucia Guru
Posts: 5597
Joined: Tue Mar 06, 2007 2:38 pm
Location: Sierra Tejeda and England

Re: Free Lunch?

Postby Devils Advocate » Sat Jan 28, 2017 10:59 am

Probably best to let them get on with it Steve if you've already warned them. We had very similar with what we considered good friends a couple of years back and still do to an extent. Too much advice to people who are obviously clueless or at best naive can backfire and you may end up being branded as jealous for putting a damper on their money making plans.

At the end of the day if you are drawing a heady 7% pa from a fund without checking the status of the investment then that rings alarms bells for me.

Surely you'd look at your investment via the annual statement and "cream" a bit off the profit it had made if you so wished. If no profit was made you'd leave as is and let it fight another day...........or at least that's how my mind works.

Anyway these friends of ours, the chap always said to us he did not need a portfolio or any other investments, he was adamant the way we were going with our property and other investments was "too hard work" :mrgreen:

Reason being his pension pot was worth 2 million quid, drawable in the near future and guaranteed.
So this went on for a while, the "pot" was brought up almost everytime we met. :mrgreen:
Anyway, I told the Mrs. (who is a lawyer and quite often cuts through the crap for me) about this and she reckoned it did not stack up unless he was paying a massively huge premium, I took that on board and asked the guy what his payment was............50 quid a month was the answer, with a genuinely serious face too :roll: Apparently he'd been paying it for 15 years. OH rolled in laughter when I told her,or rather gave a wry smile of disbelief.

So, one rainy Sunday the 4 of us were in our house and the "pot" got mentioned by him again when the conversation turned to the future and life after work.
OH asked what he paid for this 2 million stash and the 50 quid was the reply.
Then the bombshell came, OH says "Dave, how many others share this "pot" with you", "Just me" came the reply.

My Mrs then was feeling a touch uncomfortable and said as a friend that the numbers simply didn't stack, it was then his Mrs. made a very veiled comment which amounted to us maybe being envious........a million miles away from the truth.

He said he'd bring his last pension statement around and in fact jumped in his car and fetched it in a bit of a agitated hurry.
That was that, a couple of hours later the realisation set in, and the following week after finally speaking to the carers of the fund he got his pension forecast, it was peanuts, genuinely peanuts.

Now this guy on the face of it is not daft, very good management position, company Beemer, detached house in rural settings and not what you'd call a plonker, however he'd miscalled this one in a massive way. They never cared about frittering money away as this 2 million pot was to provide a yearly income more than matching what he was on now when they retired.

Sad really as it was a huge bombshell for them. Hard to believe but 100% true story. He went after the financial advisor who he swears told him that the figures were what he thought and what he'd receive, and sure enough his pension statement did say the fund topped 2 million.

The "free lunch" thing is relevant here too, how does 50 quid a month over 20 years turn into a 2 million equity?
I don't think in this case he was mis sold or scammed, just very gullible and not able to see for himself his figures never stacked, or maybe didn't want to.

It has changed their lives, we take no pleasure from it whatsoever and can now feel a touch of "semi resentment" whenever we do meet up .
I just know it was better for them to find out now than the day the pension was ready to draw and the final figures sent.

A funny old world that never ceases to amaze.
Last edited by Devils Advocate on Sat Jan 28, 2017 12:43 pm, edited 1 time in total.
Property owner in Andalucia since 2002. How time flies.

flyeogh
Resident
Posts: 287
Joined: Sun Jul 15, 2007 9:07 pm
Location: Puerto de Santa Maria (and Asturias)
Contact:

Re: Free Lunch?

Postby flyeogh » Sat Jan 28, 2017 11:40 am

Sadly the people who need qualified Financial Advisers are the very people who do not know what a Financial Adviser is, and refuse to consult one, or consult an unregulated one who promises the impossible (which means they are not Financial Advisers of course), or simple believes what they read in the Daily Mail, or worse openly take the scam bait.

But I've always found friends and money never mix well. The problem is of course the minute you give the slightest hint of an opinion you are in trouble. But if you say nothing you leave a friend wandering into a certain scam :( The ultimate catch 22.

The only advice I think I would offer to anyone is "Do not put all your eggs in one basket" and leave it at that. It has proven to be true throughout history. But I doubt Steve's friend would listen.

So sad the world is littered with broken friendships and broken dreams all down to greed :(
El raton de watford

Unicorn
Resident
Posts: 1670
Joined: Sun Jun 30, 2013 5:06 pm
Location: Estepona

Re: Free Lunch?

Postby Unicorn » Sat Jan 28, 2017 11:59 am

I once put all my eggs in a tray on the roof of the car, forgot about them

With disastrous results!

User avatar
Wicksey
Andalucia Guru
Posts: 5879
Joined: Mon Sep 20, 2004 1:21 pm
Location: Axarquia coast

Re: Free Lunch?

Postby Wicksey » Sat Jan 28, 2017 4:35 pm

I can see your dilemma Steve as you obviously don't want your friend to be scammed. Having already lost one lot of money through what sounds like a Ponzi scheme, if he insists on going for the next dodgy investment what more can you do? How many times can you warn them, if they simply don't want to listen?

There was a man on TV recently that had fallen for these scam investments time and time again, putting more and more money into them in the vain hope of getting back his losses, like a gambler. He was quite elderly, and had previously been in a good profession, but I did wonder if he was getting dementia or something, as I could not believe that anyone in sound mind would throw all their money at these obviously dodgy schemes. But then again I still hear of people that fall for the Nigerian Lottery scam.

flyeogh
Resident
Posts: 287
Joined: Sun Jul 15, 2007 9:07 pm
Location: Puerto de Santa Maria (and Asturias)
Contact:

Re: Free Lunch?

Postby flyeogh » Sat Jan 28, 2017 5:11 pm

Not only Nigerian lotteries but my business partner for some years had an extra daughter. She had to escape from a religious cult her parents had joined. Sell up everything, give all your money, wait for doom, next doom July 17th ****. Even when the date passed and the guy invented a new date did they cotton on? Nope :eh:

But then there is another side. Spoke to a guy a few years ago about his father who trusted no one. Banks, government, insurance, even medical people. He lived a very basic life in old age not looking after himself. When he died the son found bundles of money hidden everywhere: under the floor boards, in mattresses, you name it.

Or people who do not see beyond tomorrow and then retirement or ill health arrive :evil:

But how do you strike a balance between big brother state looking after the gullible and vulnerable, and the freedom most people want to enjoy? No idea what the answer is but the amount of gullibility in society certainly is not small as evidenced by the size and expansion of the scam industry. All very sad

ps: I've bought a vineyard near Cadiz. Just looking for people with £10,000 to invest. Profits in a few years enormous and as much free wine as you can drink. Send cheque to ........................... :wink: My brother spends time winding these guys up. His best yet is to keep the guy on the phone for 1 hour 17 minutes and he always demands that they send him the glossy literature. OK my brother is a little odd but at least he is fighting back. As he says while they speak to him then they have less time for the gullible :thumbup:

ps ps: He doesn't even drink alcohol :lolno:
Last edited by flyeogh on Sat Jan 28, 2017 5:20 pm, edited 2 times in total.
El raton de watford

User avatar
peteroldracer
Andalucia Guru
Posts: 7774
Joined: Wed Oct 13, 2004 5:56 pm
Location: Los Alcázares, Murcia

Re: Free Lunch?

Postby peteroldracer » Sat Jan 28, 2017 5:16 pm

:roll: and these people are regarded as adult enough to vote..... :roll:
I used to cough to disguise a [email protected] I f@rt to disguise a cough.

User avatar
linajeff
Tourist
Posts: 22
Joined: Tue Jan 31, 2017 12:27 pm
Location: United States
Contact:

Re: Free Lunch?

Postby linajeff » Wed Feb 01, 2017 9:57 am

Unicorn wrote:I once put all my eggs in a tray on the roof of the car, forgot about them

With disastrous results!
Very well put!. This was beautifully written, so i just had to quote it!
:wave:

Stevemul
Resident
Posts: 260
Joined: Fri Nov 23, 2012 2:43 pm

Re: Free Lunch?

Postby Stevemul » Sun Mar 05, 2017 12:50 pm

Back to the original post...
This is what he is getting into....!
https://en.m.wikipedia.org/wiki/Binary_option

jhonie99
Andalucia.com Amigo
Posts: 134
Joined: Fri Oct 23, 2009 12:05 pm

Re: Free Lunch?

Postby jhonie99 » Mon Mar 06, 2017 11:01 am

Funny that nobody has mentioned all the idiot immigrants to Spain that have lost anything from 40%-80% of the value of their properties during the last downturn. Let's face it, it was bloody obvious to anyone with half a brain that it was going to happen, lol. All the information was available, but people didn't want to see it!!

Anyway, what should you do.........
Let him get on with it. Not your problem. Most certainly none of your business.
If you want to impart advice, just say that you wouldn't do it and leave it that. I've done exactly that with my spanish sister in law, with regards a business contract, a couple of days ago.
No doubt I will be ignored as all her expert Spanish contacts will say that the guiri doesn't know anything.

Miro
Andalucia Guru
Posts: 3584
Joined: Tue Feb 27, 2007 8:20 pm
Location: Merseyside, formally Torremolinos

Re: Free Lunch?

Postby Miro » Mon Mar 06, 2017 4:36 pm

It's bloody obvious to me that anyone with an absolute certain knowledge of when, and to what extent, the crash was coming, would have made an absolute fortune out of that knowledge. I know I would have...and I've only got half a brain. So I wonder why, sitting there with your millions, you seem so angry with everybody else - Spaniards & expats alike?
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

Pamela1
Andalucia Guru
Posts: 2542
Joined: Wed Jan 08, 2014 3:30 am
Location: Co Durham/ Granada Province

Re: Free Lunch?

Postby Pamela1 » Mon Mar 06, 2017 9:12 pm

jhonie99 wrote:Funny that nobody has mentioned all the idiot immigrants to Spain that have lost anything from 40%-80% of the value of their properties during the last downturn. Let's face it, it was bloody obvious to anyone with half a brain that it was going to happen, lol. All the information was available, but people didn't want to see it!!
I really don't see what's so funny!! but you obviously get a rise out of other peoples misfortunes!! :wtf: :thumbdown:

User avatar
costakid
Andalucia Guru
Posts: 5754
Joined: Sun Feb 13, 2005 11:55 am
Location: malaga este

Re: Free Lunch?

Postby costakid » Tue Mar 07, 2017 11:28 am

jhonie99, Your going to be very popular on here with comments like that.

I can’t wait for the next time you ask for advice, but I guess as you know everything you won’t need to.

Manchesteral
Resident
Posts: 1967
Joined: Wed Mar 12, 2014 11:48 pm

Re: Free Lunch?

Postby Manchesteral » Mon Apr 17, 2017 3:44 pm

People are gullible, ask any timeshare investor how much money they've made on their investment !

markwilding
Andalucia Guru
Posts: 7777
Joined: Fri Aug 14, 2009 11:02 am
Location: Bilbao Spain

Re: Free Lunch?

Postby markwilding » Mon Apr 17, 2017 5:33 pm

What about playing them at their own game?
Give him the 100, get the 170 and don't invest anymore


Very strange as I write this the ad below is offering 7 - 8.5 per cent investment bonds


Who is online

Users browsing this forum: Bing [Bot] and 24 guests