Scams Spread In Wake of Ebola Fears

This piece was posted on November 6th, 2014 on http://freep.com by Ziati Meyer, Detroit Free Press Staff Writer. Telemus Capital Partner and Senior Advisor, Lyle Wolberg, comments on how to react to the current Ebola situation.
(This Opinion piece presents the opinions of the author. It does not necessarily reflect the views of Telemus Capital, LLC)

Scams Spread In Wake of Ebola Fears

Hey, have I got a stock tip for you! It’ll make you millions of dollars in no time.

There’s this drug company that has discovered a cure for Ebola —

Stop right there. It’s a scam.

Experts are warning the public not to fall for get-rich-quick schemes like this, or for pitches by fly-by-night charities, claiming to aid Ebola victims.

The North American Securities Administrators Association found about 1,200 websites included “Ebola” in the domain name — from hotebolastocks.com and ebolafutures.com to ebolainvesting.com and fundsforebola.com — and about 15% of the organizations have identified as suspicious.

“What the scammers are looking for is to convince people they’re going to make a lot of money in a short period of time. Our thought on this is if it’s too good to be true, it probably is,” said Lyle Wolberg, partner and senior adviser at Telemus Capital in Southfield.

“Scammers rely on the fact that emotions and money usually are tied together and the greed factor is big part of these get-rich-quick cons.”

And even if there were a major Ebola breakthrough about to rock the pharmaceutical world you wouldn’t find out about via your junk folder.

“There are laws and regulations regarding insider trading. If an established company has a cure for some sort of disease, they’re going to publish that as soon as possible to get their stock price to go up. It’s not going to be a secret inside spam or an e-mail alert from a stranger,” Wolberg said.

Attorneys general in several states have issued warnings about scammers exploiting the public’s fear — or greed.

For example, in Illinois, people are getting offers for $29 “surplus personal protection kits,” which purport to protect people from contracting Ebola, particularly emergency responders.

In August, the U.S. Food and Drug Administration warned against buying supplements, alleging they protect those who take them from contracting Ebola to help cure it in those already infected.

Fake charities are popping up, too. Charity Navigator has found hundreds of them, so it’s advising would-be donors to give money only to vetted, known not-for-profits that are helping Ebola victims.

According to president and CEO Ken Berger, con artists use the vast expanse — distance and information — between the U.S. and west Africa to get people to open their wallets, plus the speed by which the illness spreads add a time element for them to pressure potential suckers to give without researching the charities first.

“Avoid telemarketers, crowdfunding sites, social media and e-mails. It’s the Wild West out there,” Berger said Oct. 31. “Just because something says Ebola or someone says they’re appealing for funds for someone suffering, err on the side of caution. … The scammers and thieves know the American public is the most generous in world and whenever there’s a disaster or crisis, millions and millions, sometimes tens of millions are being raise, so there’s a huge bucket of money. A lot of times, people give on impulse based on a photo or a story someone tells. They know it’s an opportunity to exploit the event.”

Contact Zlati Meyer: 313-223-4439 or zmeyer@freepress.com. Follow her on Twitter @ZlatiMeyer.

How to avoid Ebola scams

■ Think logically. If it were such an amazing stock tip, why would you be finding out about it via spam?

■ If it is a good information source, beware of insider trading issues.

■ Don’t open any e-mails with the word “Ebola” in the subject line, as it could contain malware.

■ Don’t suckered by a sad photo or story.

■ Report any Ebola treatment claims to the FDA.

■ Verify a charity by looking it up on www.charitynavigator.org or www.charitywatch.org or give only to well-established charities.

■ Don’t give your credit card information to any telemarketer claiming to be calling on behalf of a charity for Ebola victims.

Source: Free Press research