Bad Advice - If it looks too good to be true.
One of the worst, although well meaning, advice regarding scams or frauds is: if it sounds too good to be true, it is. This is utterly pointless as a warning, ineffective as due diligence, and patronizing. Nothing sounds too good to be true until after the scam or fraud is discovered. When did Enron sound too good to be true? After the fact, we discover quite easily why we should not have fallen prey to the sirens of the biz op scammer - but it is before the fact that we need to be attentive. There is no simple one line answer for effective due diligence against fraud -but because fraud grows despite our efforts to contain it, regulators face cognitive dissonance. For a regulator, someone in charge of building markets for reputations, their failure leads them to conclude the that there is a simple cognitive solution: just recognize those things that are too good to be true.
Here is the paradox: it would be too good to be true if a scam or fraud announced in clear and loud sounds that they were too good to be true. And so, following the common folk wisdom, it is false that scams and frauds announce that they are too good to be true. This is why the advice is useless and why it will, despite this, will continue to be offered up as a pancea against fraud.
Technorati Tags: cognitive dissonance, due diligence, fraud, biz op, sounds, patronizing, enron, line answer, scammer, frauds, sirens, scams, pointless, paradox, regulators, prey, recognize, leads
