On 30th August 2022, a bank’s anti-scam team narrowly prevented a Singaporean from transferring over $1 million to scammers. On 24th October 2023, a Singaporean father of two lost over $1 million to scammers in just 15 days. On 19th March 2024, an 82-year old man was targeted three times in two months, losing $3.7 million. On 2nd May 2024, a Singaporean man lost $2.9 million after a scam phone call.
While age and family backgrounds vary, there’s a common thread here – and I’m sure you can see it. All of these scam victims were in the single digit millionaire category. A demographic that, by the judgment of the public and often the authorities, are more “sophisticated” with money. There’s a latent assumption that, if someone is able to earn, save, or win that single digit million, they also have the savvy required to avoid a con-job. But clearly, the repeated incidents prove otherwise.
The truth is, single digit millionaires are just as vulnerable as their less wealthy counterparts. Single digit millionaires seldom have the assets to justify a family office, a dedicated private banker, or the various teams of professionals that fiercely protect the assets of their multi-millionaire / billionaire counterparts. And due to the size of their bank accounts, they’re even more attractive targets compared to the average person.
In light of that, let’s look at the tactics used to target single digit millionaires:
Scams that are better tailored toward the single digit millionaire crowd
We’re going to leave off the methods that you already know about, like romance scams. These are generic methods applied to just about everyone. Instead, we’ll look at the factors that are especially pertinent to single digit millionaires:
- Tax-and-lawsuit approaches
- Charity-based scams
- Frog-boiling scams
- Pretexting and framing scams
- Alternative investment deals
1. Tax-and-lawsuit approaches
Accusing someone of tax evasion, or claiming you’re filing a lawsuit against them, is more likely to work against single digit millionaires. This demographic tends to have the wealth / income level to reasonably be the target of a civil suit, or potentially draw the attention of a body like IRAS.
Using this approach, you’re pressured into making immediate repayments for back taxes, under threat of legal action (sometimes to you, but just as often toward your business). For lawsuits, it usually manifests as a claim that someone wants to sue you, but the scammer is in a position to settle it for a fee. This is usually accompanied by legal sounding documents, and sometimes forged letterheads.
2. Charity-based scams
Single digit millionaires, particularly business owners, are known for grass-roots activities. This is especially common in Singapore, with regular features in local media; credit it to Asian culture in general, where we tend to place communities above the individual (or perhaps to religious beliefs like Buddhism and Taosim, which motivate altruism).
This is also fertile grounds for scammers who target single digit millionaires. People who give to charities seldom check the results. If you’ve ever donated money to wildlife preservation, for example, I’ll bet you never followed up a year later to see what sanctuaries they built or how many animals they saved. Likewise, people who donate to an alleged temple seldom bother to check on construction, or improvements to the building.
We’ve already got the endorphin hit and reassurance from our good deed – no need to appear ngeow and check up on people. And this is, of course, why scammers love charity as a cover: they’re much less likely to get caught.
3. Frog-boiling scams
This is based on the myth that, if you put a frog in a pot of water and gradually turn up the temperature – just a bit at a time – it will eventually boil to death without jumping. Whilst frogs are not actually that stupid, some people can be at times.
Single digit millionaires are seldom scammed for large sums all at once. It happens from time to time, but it’s risky: first, because you’re more likely to double-check when asked for a large sum like $1 million. Second, because the bank’s anti-scam protocols will likely catch it. Any attempt to transfer a huge sum, like a single digit million, to a strange account is bound to cause the bank to intervene.
So rather than do that, the preferred method is to slowly extract bigger amounts. First a small amount like $50 for an administrative fee, then $150 for exchange rate reasons, then $300 for some other excuse, then $500, etc. This slows detection by banks, and gradually raises your willingness to comply.
There’s also a bit of sunk-cost fallacy here, as you may think that – because you’ve already spent so much – you’d better not stop now.
4. Pretexting and framing scams
Single digit millionaires tend to rely more on word-of-mouth referrals, because you’re probably cold-called to death (if you haven’t already put your name on the PDPA do-not-call registry). Scammers can actually use this against you, since you lend much more credibility to this sort of introduction.
One approach would be to befriend, seduce, or outright bribe an acquaintance of yours to introduce the scammer as an expert of sorts: a guru, a healer, a genius investor, etc. When someone trusted tells you that “X is a top investor,” that hits with a lot more force than the scammer saying it about themselves; or from what you see on social media.
This is much more involved and takes more effort from the scammer, but it comes with a big bonus: you might fall for it and introduce the scammer to others as well, thus allowing their con to spread like a cancer. This is how Ponzi schemes (and coincidentally, cults) tend to start.
5. Alternative investment deals
By now, you’ve probably heard the advice to “keep five per cent in alternatives,” or something of the sort. Perhaps you use a barbell method, with 95% safe assets and 5% high-risk.
Scammers know your attitude toward those high-risk alternatives: you’re already braced for a loss, and are willing to buy into more exotic things. Even better, you may not come after them when their “invest in Siberian squirrel droppings” or whatever scheme fails. Hey, you knew it was an exotic and volatile bet, right?
Truth is, it’s very hard to tell between a genuine scam and just a crazy gamble – and this is precisely why scammers love it. They’re also leaning on the fact that, because they’re investment scheme is so weird and exotice, you can’t fully comprehend it, or find a relevant expert to guide you.
How do you avoid all this?
Besides being aware of them, the simplest method is this: never trust in urgency. The hallmark of a scammer is to describe everything as an exaggerated emergency: if you don’t do something now, you’re going to miss out on millions, end up in jail, see the world literally end, etc.
In reality, how many hugely impactful decisions in your life (buying your first home, having your first child, deciding on your degree course, etc.) have had to be made on the spot? Those things were all life-changing, but you made them just fine in a slow and progressive way.
Remember that you probably have more time than you think, when it comes to many major decisions – and always act with caution toward those who phrase everything as an emergency. Or if you have doubts about something, reach out to us on Single Digit Millionaire.
