Too Good to be True

This morning Wendy and I were discussing scams.  Specifically we were discussing what sort of heuristics you could use to determine whether or not something was a scam rather than a legitimate offer.  This is one of those bizarre situations where it is fairly easy for a objective person to determine what is a scam or isn't given a short description but it is fairly challenging to write a simple heuristic to make that same decision.

The example we saw was a snippet of a newspaper ad from many, many years ago.  It was advertising a writer's group that would test you to see if you had substantial latent writing talent and invite you to learn by correspondence if  you passed the test.  The idea was that they had a staff of professional writers would would mentor you and provide feedback and advice on your assignments.  All for a very modest fee, of course.  It turns out that they passed everybody who wrote their 'exam' and were happy to ship completely generic advice to you that was not at all generated by the actual assignments completed.

More recently I had two different friends fall prey to two other scams.  The first is a 'modelling agency' which finds people at fairs and shows, tells them they stand out in a crowd and should be a model and then fleeces them for tons of money for 'portfolio fees' and whatever else they can get.  Needless to say the fleeceee never does any modelling.  The second is pretty much a straightforward pyramid scheme selling phone/tv/internet services where the fleeceee pays a substantial fee to join the system and then has to both sell and recruit like mad to try to make their money back.

So how can we differentiate these from real opportunities?  As far as schooling goes I suggested the 'They might turn me down' method, whereby if the school will take absolutely anybody then you must be suspicious that the only thing they care about is your money, rather than the quality of the applicant.  This works for universities and 'writer's groups' but fails for most colleges and many other real programs.  The only thing I was able to come up with that actually worked is 'I personally would hire someone who had that institution's name on their resume'.  If someone gets a degree in Medical Biophysics from the University of Toronto, I know it is something.  If they get a writer's certificate from the New York Newspaper Writer's group I would totally ignore it.  You could easily determine the worth of a learning opportunity by contacting recruiters in the industry in question and asking their opinions of an institution before enrolling.

As far as modelling agencies and pyramid scheme sales jobs go, the heuristic is actually extremely simple.  If you are looking at a job offer where the job pays you, it is probably legit.  If you are looking at a job offer where you pay the job, IT IS NOT LEGIT.  There is always good old reliable "If it seems too good to be true, it probably is" which certainly sorts out all kinds of different problems but is remarkably unspecific.  Perhaps the best possible solution is to make use of the fact that people make bad decisions individually but that large groups of people make much better decisions.  If an offer concerns you, ask the 10 smartest, most objective people you know.  If they mostly think it is a scam, it is.  If they don't, it isn't.