The small print

It’s not the big things that will hurt you, it’s the little ones.

We all know that the most dangerous mammal in Africa is the hippopotamus, don’t we? Except that it’s not true. The most dangerous mammal in the one you see in the mirror every morning. Human beings are much more likely to kill you than any other two or four-legged creature. Even more dangerous are the critters with six legs such as the mosquito. Even more dangerous are the ones even smaller with no legs at all: bacteria and viruses.

As consumers, the same rules apply. The big, obvious, “in your face” things like advertisements, special offers and fancy displays of goods in windows are seductive but it’s not them that will end up hurting you. It’s the little things that will do that. The little words in the contract you sign. The words you either didn’t read or didn’t understand.

Despite being a passionate believer in the liberal, free market this is an area where my former radical left-wing opinions still sometimes appear. The capitalists are screwing us, the workers. That’s because they can afford lawyers and we can’t. Or perhaps they can just afford better ones than we can. They can write contracts that exploit our ignorance, naiveté or laziness.

Mmegi readers will know that the leader of Tibetan Buddhism, Tenzin Gyatso, the 14th Dalai Lama was due to speak in Botswana, probably right now as you are reading this. However, following his “exhaustion” he was forced to cancel his appearance just a week before he was due to arrive. I’m not going to comment on the politics of this. As you’ll all know the Chinese government were very angry with us and our government for permitting him to come here and exercise his right to speak his mind on such dangerous topics as spirituality, Botho and Ubuntu. No, I’m really not going to comment on their bullying tactics, colonialism and contempt for our tradition of free and open speech. No, I really won’t.

Instead I’ll avoid such sensitive subjects and talk about the contract that applied to anyone who was planning to attend the event and listen to him speak. Several people have asked for our advice following the cancellation and how they should address the organisers who have apparently said that the money people paid to be there either won’t or can’t be refunded. Is this reasonable, they ask?

In fact, what matters most is not whether their refusal is reasonable or not, what actually matters is what the contract says.

In the contract that apparently applies to this event, there is a clause that says:

“The Organizer reserves the right to modify the program without prior notice. The Organizer may announce possible program changes on its home page and/or at the venue of the event.”

Yes, technically speaking, the non-appearance of the key person at the event, the keynote speaker, the (almost) universally respected leader of a global religion is a “program change”, in the same way that KFC without chicken, a bar without beer or a bank without money would be a “program change”. And yes, the Dalai Lama was only one speaker at the event, there were plenty of other people scheduled to say their thing. But can you name even one of them?

KFC can give you chips without chicken, a bar can serve you lemonade or wine and a bank can pester you with Know Your Customer information demands, but a Dalai Lama event without the Dalai Lama is different.

But regardless, there’s no refund and that’s probably understandable. The organisers have already paid a deposit for the venue and the catering, bought flights for the other people who were going to speak and paid staff their salary for persuading people to stand up against a foreign government determined to tell us how to run our country and dictate who can speak their minds here. Whoops, I went there again, sorry.

So they’ve incurred costs and a full refund probably isn’t morally possible but the small print is what matters most. In fact, it’s the only thing that matters. But maybe the organisers should have followed the advice offered by a member of our Facebook group. Why didn’t they take out insurance against this happening? It would have added to everyone’s costs but it would have enabled them to offer their disappointed customers something instead of just irritation and frustration.

The thing that worries me most is how often we hear from consumers who are faced with financial ruin because they didn’t read a contract. Or perhaps they did read it but they didn’t understand it. It doesn’t matter whether it’s a furniture store’s hire purchase agreement, an insurance policy, a cellphone contract, a banking agreement or a lease, so many people simply sign on the dotted line and don’t take the time to understand what it is they’re committing themselves to. And then they get into trouble.

Perhaps the most unsettling clause I ever saw in a contract was in a hire purchase agreement. After several pages of tiny text, including a mixture of Latin, long words and confusion, it finished with a statement something like “I have understood this agreement and promise never to say that I didn’t”.

So what should we do? How can you and I protect ourselves? The first thing is simple. Never, under any circumstances, sign a document that you haven’t read and understood. Secondly, always ask to take an agreement away with you so you can read it at leisure. Go back the next day and sign it if you think you commit to it. If a store won’t let you take the agreement away then ask yourself what it is they’re trying to hide.

Another thing you can do is take control. Just above your signature, write something like “I do not agree to clause X”, or “I have not read or fully understood this agreement”. Maybe even cross out and initial any clause you don’t like. Always write “Not inspected or tested” on any delivery note you ever see.

Above all, understand the importance of your signature. If you sign it, you’re committed and there’s often no way out.

UPDATE: The organisers have stated that refunds WILL be available to those who request them. Good news!

The Voice - Consumer's Voice

Where’s my ring?

Hi Mr Harriman. I bought a ring worth P4300 in a certain company and it got damaged the upper part detaching. Their policy says they can either repair or replace or refund. I took the ring to them and they said they can repair in 2 weeks. Two weeks is over and they called me to say they haven’t found the parts to repair it and I should start counting another 3 weeks. I don’t agree because I have waited too long. The ring was 3 months old. Do I have the right to ask for an exchange or refund because I can’t wait for another 3 weeks. My marriage is new and it pains me to live without my ring.

I agree with you entirely. You’ve waited too long. You spent a huge amount of money on an item that was incredibly important to you, something of enormous sentimental value. A wedding ring isn’t the same as a watch or a necklace, it’s meaningful and the delay that this company has caused you is completely unacceptable.

The store is right that they are required to offer one of the three Rs, a refund, repair or replacement. They’re also correct that it’s up to them to decide which of the three they offer you. However there a limits. They had three weeks to repair the ring and although I’m clearly not an expert on jewellery, I can’t imagine why it should take so long to repair a wedding ring. I think you have the right to escalate the situation a bit. I think you’re entitled to tell the store that they’ve had more than enough time and that now you expect a solution within a week.

I suggest you tell them that a repair or a replacement are now the only solutions you will accept. We’ll also get in touch with them and see if we can’t get them to accelerate things a bit.

Is Helping Hands International ok?

Please help. Is Helping Hand International with its money pyramid a genuine NGO and is it registered in Southern African countries?

Helping Hands International is a pyramid scheme. The people marketing the scheme have described it as a “non governmental organization” attempting to “empower the less privileged people and orphanage homes”. They also claim that joining the scheme will offer a variety of things, including “passive income”, new cars, laptops, a “house of your own”, free trips abroad, loans of up to P500,000, scholarships and “residual income for life” but none of this is true. Not a single thing.

Unlike Multi-Level Marketing schemes like Amway and Herbalife, Helping Hands International has no products and its business is based entirely on recruiting people beneath you and those recruits recruiting people beneath them. Everyone joining is promised the prospect of money magically flowing in their direction. That’s what we call a pyramid scheme.

Some months ago I had a WhatsApp conversation with someone who was busily recruiting people into Helping Hands and I asked him “So you earn money by recruiting other people? I don't have to sell anything, just recruit more people?”. His answer was simple. “Yes Sir”. See, the scheme’s own recruiters even confess it’s a pyramid scheme.

They’re also liars. Their advertisements claim that they are “in partnership with Bill Gate Foundation, Hyundai Motors, Apple Corporation, HP” but in reality there are no such partnerships. Reputable people and companies like these don’t endorse pyramid schemes like Helping Hands International.

In summary, this is nothing more than a pyramid scheme run by people who tell lies. Like all pyramid schemes Helping Hands International will eventually collapse, leaving its victims disappointed, embarrassed and poorer. Do you really want to be a victim? Please warn everyone you know about them. Let’s spread the word and help protect our family, friends and neighbours.

Are we all pirates?

I caused some disturbance in our Facebook group last week when I posted the details of a conversation I had with someone who posted an advertisement in the group. His advertisement offered a range of technology services including “Laptop repair(any problem)”, “Theory Test Software(for Laptop/Desktop & phones” and “*asswords removal both pc & phone” but the one that interested me most concerned Windows.

The ad offered “Operating system Windows 7,8,8.1,10”. I messaged the guy and asked him how much Windows 10 would cost me. “p100”, he told me. Given that Windows 10 currently costs about ten times that much if you buy it directly from Microsoft, I’m sure you can understand that I was suspicious. “Is this legal”, I asked? “What's legal??upgrading your machine??that's ur laptop u do whatever u want...”, was his response. I asked if this wasn’t software piracy and he said “No sir if you know IT that's not a piracy”. My final question was “Are you paying Microsoft their licence fee?” and that when he lost patience.

“Old man get your facts together then talk to me when ready I got no time to argue with u let me help those who want my service”.

I posted this exchange as well as a copy of his original advertisement so everyone in the group could see it and the reaction was mixed. The overwhelming majority expressed surprise or shock at what was clearly software piracy but a vocal minority had different reactions. One member of the group said “Leave the guy alone, why are you trying to disturb his hustle”. Another asked “How are you ripped off when he sells a software worth more the P1500 to you for P100?” Someone else suggested that “That's how the world works, until then, let the guy be, hes trying to make cash akere”.

I should state that I admire small entrepreneurs, those people who try to make some money the hard way, by hitting the streets (or Facebook) buying and selling things, trying to make a profit. But I don’t admire hustlers. My dictionary defines the word hustle as “to obtain illicitly or by forceful action” and that’s an approach we shouldn’t accept. I also don’t admire thieves.

And yes, I do think this guy is a thief. The simple truth is that the only way he can afford to sell people copies of Windows 10 for on tenth of its normal price is if he is selling pirated copies of the product. And selling pirated copies of anything is a form of theft. The fact that it’s common is no excuse. Many people exceed the speed limit when they’re driving and drive through red lights but does that make it right? Does the frequency of a crime excuse that crime? No, it doesn’t. It also doesn’t matter that someone else might have done the same thing. That doesn’t excuse you doing it.

The fact that the person or company having its products stolen is fabulously wealthy is also irrelevant. Software pirates aren’t modern-day Robin Hood figures robbing from the rich to give to the poor, they’re keeping the money for themselves.

It’s also important to know that they’re selling you a product that probably won’t work properly. Companies life Microsoft are smart enough to build protections into their technology to ensure that piracy is difficult for its consumers. Sooner or later the computer running the pirated version will connect to the internet and then will declare itself to Microsoft’s servers and will then start the process of shutting itself down. One member of the group appears to have that problem, posting “My software is not genuine. My laptop keeps on popping that message whenever am using it”. Eventually the software is going to stop working completely.

Not everyone was sympathetic to our pirate. One member of the groups suggested that if “you are comfortable buying pirated software, then you might not mind buying a stolen cellphone or tv.” Another described his customers as “being ripped off by unscrupulous crooks masquerading as businessmen”. Yet another correctly suggested that his services should be avoided because “he's breaking a handful of laws in doing so and making the recipient a criminal as well.”

And that’s a very good point. Section 317 (2) of the Penal Code says that:

"Any person who receives or retains any property knowing or having reason to believe the same to have been unlawfully taken, obtained, converted or disposed of in a manner which constitutes any other offence, is guilty of an offence and is liable to the same punishment as the offender by whom the property was unlawfully obtained, converted or disposed of."

Meanwhile I also acknowledge that Windows 10 is an expensive product. It comes already installed on almost all personal computers but if you need to buy it new, you’ll need to pay about P1,200 online and more if you go to a computer store. If you add the price of Microsoft Office on top that’s roughly the same price again so it really can be an expensive business.

But the irony is that you don’t need to spend any money at all to get a computer working. You don’t need to spend a single thebe on Windows or Office if money is tight.

The alternative is to be radical. Go for an entirely legal, safe and free alternative to Windows. Yes, I did say “free”. Install a version of Unix such as Ubuntu or Linux which you can download for free and it even comes with the equivalent of Word, Excel and Powerpoint and is really easy to use. Better still it even runs on the older, lower power computer you might have. I’ve done it several times and I have computers at home and in the office running Linux right now. Even better still, like its distant cousin, the Mac, a computer running Unix is almost immune from viruses and malware?

If money is short (or even if it’s not) the alternative is there. You don’t need to spend your precious, hard-earned money with Microsoft or even a hustler selling you stolen goods.

The Voice - Consumer's Voice

Must I pay so much?

Kindly assist me with information and possibly solution.

Someone borrowed P5,000 from a motshelo. I had referred him to the lady. He did not pay as per agreement. It took long but I ended up paying P13,000 for this P5,000. The lady insists that she is owed P27,000 for this P5,000.

What help can I get if any and where can I get the help? Please note this is not a registered micro lender.

I would really appreciate your assistance with this.

I think the lady should stop smoking whatever has driven her insane.

This is nonsense. The “in duplum” rule, a piece of common law applicable in Botswana says that when a debt is settled, the interest charged may not exceed the capital amount outstanding. If the original amount borrowed was P5,000, the interest at the time you settle the debt cannot legally exceed that amount. The lender can charge a modest amount for administration costs but they can’t use that to avoid the in duplum rule.

Also, although motshelo schemes are “informal”, they are nevertheless covered by NBFIRA, the Non-Bank Financial Institutions Regulatory Authority. I suggest you call NBFIRA tomorrow and ask for their advice. Their numbers are 3102595 and 3686100. If you can’t get through to the right person let me know and I’ll find someone there for you.

Is this loan genuine?

I received an email from a company called African Loans offering to lend money. I applied for a loan of 15,000 Euros and they have asked me my banking details and a registration fee of 215 Euros. They say they will lend me the full 15,000 Euros and I must pay them 638 Euros monthly for 48 months at an interest rate of 2% per year. They say that the total monthly payment will be 15,314 Euros.

I’m concerned because I have also lost a lot of money through the 419 scams by Nigerians.

Could you please check this one out for me?

I think you know this is a scam, don’t you? Given that I can see from your email footer that you work as a finance officer, I’m sure you’ve done the maths already. 48 monthly payments of €638 is a total of €30,624, more than twice what they say it is. Also, I’m sure you will have calculated that interest rate they claim they’ll charge is 26% per year, not 2%. Tell me you noticed that they can’t do maths?

You’ll also have wondered how a lender would claim to lend anyone money at a level lower than the inflation rate either in Botswana or anywhere else, and so much lower than your bank can do.

I also hope that you’ve wondered why a genuine finance company would use a Gmail address ("africanloan@gmail.com") rather than a more business-like one? I’m certain that you’ll also have wondered why a company that says it’s based in Europe would consider lending money to someone in Africa.

Again, I’m sure you’ll have wondered why you need to pay them a “registration fee”. You’ll have tried to remember the last time your bank tried to charge such a fee, wouldn’t you?

Given that you fell for a 419 “advance fee” scam in the past I’m sure you’ll have noticed the overwhelming similarity between that scam and this loan offer? You’ll remember how the previous scammers offered you, a total stranger, something amazing so long as you gave them money in advance. You’ll remember how you didn’t get that money back. You’ll have learned that scammers don’t offer refunds if you complain.

Please tell me that you saw all these things? Please?

The Voice - Consumer's Voice

Can they keep my money?

Hi Richard. I went to a bed shop a month or two ago and saw a bed was interested in but I was told I can laybye it for 6 months. Unfortunately I am no longer working and won't be able to pay my monthly so I opted to cancel the laybye and they are saying they are going to charge me something out of the money I already paid. This was never explained to me when I took the laybye so they just won't refund me.

There were no instructions whatsoever on the laybye regarding the terms and conditions.

Are you sure there wasn’t a form you signed explaining the conditions of the laybye? I’d be surprised if a reputable store didn’t insist on a written agreement for this sort of purchase. If there isn’t how can they expect to know who owes what to who?

In normal circumstances I can see how a store might want to charge you a small fee because of the minor inconvenience you’ve caused them when you cancel the deal. They’ll need to update their records to show that the bed is no longer reserved for you and they might even have turned away another customer who wanted to buy the bed. This will have cost them some money through no fault of their own.

However, if there isn’t such a written agreement then I can’t see how they can demand that they keep a portion of what you’ve already paid them. They can’t just make up conditions to suit their interests. Section 15 (1) (e) of the Consumer Protection Regulations says that a company fails to meet minimum standards of performance if, when a deal is cancelled, they fail to pay back a down-payment or deposit “promptly”. Section 17 (1) (d) also says that they can’t cause “a probability of confusion or of misunderstanding” regarding your legal rights” by just making up conditions when they feel like it.

I suggest you go back to the store and ask them to show you where you agreed that they could deduct any amount from your payment. If they can’t then they have no right to do so.

How much interest can they charge?

I wanted to ask if it's within a Shop's right to charge one interest in a store card that is way more than what that said person owes them? E.g. Maybe I owe them 5,000 and I don't pay them for 1 year because I'm not working can they charge me interest monthly and then the amount I owe becomes 15,000?

Yes, they can. There are no limits to what a lender can charge you with one exception. That’s the so-called “in duplum” rule which says that when a debt is settled, the interest cannot be greater than the capital amount that is remaining. So if you go to them owing P5,000, they can’t charge more than P5,000 in interest. But that’s only at the time you settle the debt in full. If you’re paying the interest over an extended period then there’s no limit. That’s why if you buy something using hire purchase or have a long-term bank loan the interest could exceed the capital amount.

Meanwhile you’re entitled to a full statement of your account that should show you every payment you made, every charge they applied and the penalties and interest they applied when you were in arrears. I think you should ask for such a statement and check that their records are correct and that their arithmetic is correct.

As for the numbers they’re quoting they seem possible to me. The costs of using store cards and buying on hire purchase are enormous and if you get into arrears they can be even greater. Our advice is to avoid hire purchase and store cards like they’re an infectious disease. While store cards are sold to us by stressing their convenience and the ease with which you can buy things, the real reason stores want you to have them is that they make separating us from our money so much easier. If you do ever get one please make sure that you read and understand the terms and conditions before you sign the application form. If by any chance the store won’t let you take the T&Cs away to think about it, then you know they have something to hide!

We're ignorant

Last week I asked whether we’re stupid. This week I’ve been wondering if we’re ignorant. The answers are very different.

No, I don’t think we’re stupid, at least not all of us. Yes, we’ve all heard stories of consumers doing things that can only be described as stupid, like lending large amounts of money to total strangers without a written agreement but most of us are smarter than that, aren’t we? Most of us know to sign agreements that we’ve read and fully understood and that don’t screw us, don’t we? Please tell me that’s true?

Let’s assume that only a few of us are stupid. So that’s ok. I think that there’s a threat just as dangerous as stupidity and that’s ignorance. Don’t get confused, they’re not the same thing. Stupidity is the lack of ability to think properly, ignorance is just a lack of information. I’m fairly ignorant about the electrical systems in motor vehicles but that doesn’t mean I’m stupid. I also know almost nothing about gardening, dress-making or the traditional religious belief systems in Mongolia. But that doesn’t make me an idiot.

The problem is that ignorance threatens consumers just as much as stupidity. It puts us at the mercy of suppliers who don’t have our interests at heart or those who are actively trying to deceive us. The simplest example is with modern technology. Most of us know very little, perhaps nothing at all, about the technology that surrounds us. We don’t know how our cellphone or laptop works, how messages travel through the internet or how that video connection to our cousin in a faraway country happens. So long as it works we’re happy.

You might ask if it even matters? So long as it works, my emails arrive, I can chat to cuzzy and I can make that call, who cares how it works? That’s true in those cases but what happens when the laptop goes wrong and the company repairing is say you must pay them P2,500 for a new motherboard? Do you have any idea whether they’re telling the truth or not? What happens when you’re buying a replacement and the salesperson just starts talking about kilo-this, mega-that and giga-the-other. Do you understand a word they’re saying?

It’s no different with financial products. Very few of us are sufficiently well-educated to know the difference between different types of investments and we rely on the salesperson to give us the information we need. The same salesperson who is probably paid a commission on the size of your investment, not how well it suits your needs.

In all of these areas we need suppliers of complicated products, whether they’re computers, cellphones or investment policies to educate us openly and fairly, taking our interests into account. But you know they’re not going to do that, don’t you? So we need to force them.

Here’s a simple tip for you. Whenever someone claiming to be an expert in their area tries to explain something complicated to you and you don’t understand, use this phrase:

“Explain that do me again but this time imagine I’m only 12 years old.”

If that doesn’t work, try this one, my personal favourite:

“Explain that to me again, but using different words.”

Anyone who’s a real expert in their field will be able to do either of those things easily. Anyone who can’t clearly isn’t an expert.

There are also areas where we’re ignorant simply because we’ve never experienced something before. Bitcoin is the best example right now. As you might now by now, Bitcoin is a currency, but not like any currency we've known before. There are no coins or notes with Bitcoin, no bits of metal or paper. There’s nothing you can put in your wallet or purse. It exists purely in cyberspace. It’s a “cryptocurrency” and it’s all a bit confusing until you’ve done some serous research. Until then we’re ignorant? The danger is that this ignorance is being exploited by people who have only their own bank balance in mind. The crooks selling “Billcoin” and “Pipcoin” are doing their best to persuade us that their schemes are either similar, or connected to Bitcoin when in fact they’re nothing more than scams. Our ignorance in this area is likely to leave a lot of people very poor.

There are also situations when our ignorance of procedure presents a risk. Until last week, I didn’t know what you were meant to do when someone died in their home. The background isn’t relevant but we recently found ourselves alone in a friend’s house just hours after he’d died, having been discharged from hospital so he could die with dignity at home and surrounded by the people who loved him. Ok, we thought. What next? The first funeral parlour we called, one you all know, was unhelpful. No, we can’t do anything without a death certificate, they told us. But he died at home on a Sunday, we told them and no doctor was present. You need to take him back to the hospital so they can certify him dead, they told us. Can’t you do that, we asked, you’re the experts on transporting deceased people. Not without the death certificate, they said. You’ll need to take him back to the hospital so they can certify him dead, they continued. “Have you got a truck?”, they asked us.

That’s when we hung up and called a more sympathetic competitor. An hour later, a friendly doctor and the competitors’ team arrived and everything was sorted out. Between them, they’d been able to explain and provide some assistance.

I’m not asking for miracles but I think both the hospital and the funeral parlour have a duty to tell those of us ignorant about the technicalities of death how it’s meant to be. Why don’t hospitals produce a guide on what to do for those of us who are amateurs? Why don’t funeral parlours have a link on their web site that explains how the process should work? Why don’t they help us overcome our ignorance?

In this case our ignorance not only caused us some distress but it led to a big company losing business and receiving a formal complaint about their arrogance, lack of sympathy and stupidity.

Yes, I DO mean stupidity, not ignorance.

Are we stupid?

It’s a question I sometimes ask myself. Are consumers stupid? Are we perhaps a bit insane? Should our mothers allow us out unaccompanied?

Some while ago we had a visit from a desperate consumer who wanted our help. She was a mature woman with a long, reasonably successful career in business. Now she was running her own store. She was the sort of person I really admire. She’d saved some money from her mainstream job, had quit and had invested it in a small start-up business and then worked very hard to make a success of herself. Until she made catastrophic mistake.

She had a regular customer, a man who would often visit her store, would have a chat and would then buy a few things. He sounds like the perfect customer.

After several visits the situation changed a bit. He visited the store one day and told the owner about a project he was working on and that he needed some capital. Would she lend him some money? She gave it some thought and because he was a nice guy, spent money in her store and had a nice smile she said yes, he could borrow the money. Off they went to the bank and she transferred the money directly into his account.

Guess what? He didn’t pay her back. My heart sank. But you and I both knew that was going to happen, didn’t we? You don’t lend money to strangers. Don’t we all know that?

A year later she was in my office asking me if I could think of any way to help her get money back.

My first question was simple. You put this in writing, didn’t you? No, she said, it was just a verbal agreement. My heart sank further. How would she ever be able to prove that she’d lent him the money, how much she’d lent him or what plan there’d been for him to repay her?

I plucked up some courage and asked the big question. How much did you lend him? “One point four”, were her exact words. I felt a little better. I was about to suggest that she forget the loan and give up because, well, it was only P1,400, wasn’t it? To someone running a successful store that’s not enough to ruin the business and she’d probably spend more trying to recover the money than the amount she might get back.

But I didn’t say that. I didn’t say it because of the expression on her face. My heart started sinking again. Rapidly. “Exactly how much did you lend him?”, I asked.

“One million, four hundred thousand Pula”, she said.

My heart sank so low that I was close to calling my cardiologist.

I think I was very restrained. I didn’t laugh out loud, my jaw didn’t drop to the floor, I didn’t get up and start shaking her. Instead I sympathized, told her that I suspected that it would be very difficult to recover the money without any evidence that she actually lent it to him but recommended an attorney that I trust who might have some ideas. The problem is simple. If she ever managed to get him in front of a magistrate or judge he’s just going to say that it was a gift between friends or perhaps even lovers and that she’d agreed he didn’t need to pay back the money. He could come up with any story that seemed plausible and she wouldn’t be able to prove otherwise.

I also think I was very restrained because I didn’t ask the women for her mother’s phone number so we can arrange to have her locked in her bedroom until she grows up and develops some common sense.

It’s important to note that this woman isn’t stupid. She had a successful career and then had the intelligence needed to start a small business. But she’s clearly catastrophically naïve.

It’s similar for the people who join Multi-Level Marketing schemes like Amway, Herbalife, Tupperware and pyramid schemes like World Ventures. They’re not stupid but they are gullible. Even when they’re presented with the facts that the companies very quietly reveal in the income disclosure statements they either ignore them or develop complex denial mechanisms to avoid the uncomfortable truth. Almost everyone who signs up for the schemes either makes no money or even loses money from doing so.

And then there are the victims of scams. The scams we’ve all seen about the daughters or widows of West African millionaires who need help transferring money out of their country, amazing job offers in exotic places or expressions of love and desire from strangers on Facebook. Are the people who fall for these scams stupid?

Yes, some of them obviously are but the majority are just gullible. Gullible enough to fall for that initial email of Inbox message. And that’s exactly why these scams are so successful. The scammers actively seek the most gullible people.

Cormac Herley, a researcher employed by Microsoft, wrote a paper (link to 553kb pdf download) in 2012 entitled “Why do Nigerian scammers say they are from Nigeria?” that examined these scams. He wrote:

“An email with tales of fabulous amounts of money and West African corruption will strike all but the most gullible as bizarre. It will be recognized and ignored by anyone who has been using the Internet long enough to have seen it several times. (…) The initial email is effectively the attacker’s classifier: it determines who responds, and thus who the scammer attacks (i.e., enters into email conversation with). The goal of the email is not so much to attract viable users as to repel the non-viable ones, who greatly outnumber them.”

The scammers send these ridiculous emails to millions of potential victims, and they’ve discovered that the best way to maximise their success rate, to get the highest proportion of victims to cough up cash, is to make that first message as ridiculous as possible. If they do that, then only the MOST gullible people will respond. The people likely to respond to those emails are the ones worth the scammer’s time. Make the first email as stupid as possible and the victims will select themselves.

Stupidity isn’t the biggest threat we face and no, most consumers aren’t stupid. But a lot of us are deeply, dangerously gullible. And the only way to combat that is by developing a national skepticism. Are you prepared to be part of the movement?