Dec 27, 2014

How Xiaxue vs Gushcloud Saga teaches People to Set Up An Investment Scam

Some of my friends are curious about why I am so interested in the recent Xiaxue vs Gushcloud Saga. (Here is a good summary by Online Citizen ). One of my friend even thought that I was part of Gushcloud.

My blogs are not affiliated with any organization even though I somehow got lucky and my SG Unfit Runners blog managed to get into the finals of Singapore Blog Awards.  What I blog about (Running & Finance) is too niche for these social media organization to take notice. When's the last time you hear a financial blogger being headhunted by Nuffnang or Gushcloud? Nerds (There! I said it!) like us don't make very good influencers (We don't look good in our #OOTD) though we do know how to make money from the financial markets.

The primary reason why I interested in the saga is as part of a learning experience on how to manage the marketing and public relations of a business. With the rise of the social media, the rules of media engagement has changed dramatically and any entrepreneurs worth their salt better learn how to harness and manage these new influencers.

One of the item of the Xiaxue Vs Gushcloud saga which tickles me the most, is that Xiaxue set up this sham company called SG Private Trainers in a bid to lure Gushcloud influencers to endorse the company's product.

The trainers do not exist of course and all the pictures are simply stock pictures which can be purchased online.

A search using Dong Chu S.L. reveals that XX purchased the pictures of the trainers
So, how is this shell company which Xiaxue set up relevant to the world of financial scams?

Remember the article I wrote a month ago on How Investment Scams Gain Your Trust ... and Money? These investment scams make use of personality with overwhelming credentials to trick you into thinking that you can trust them. Asians love qualifications and for some reasons, we tend to trust the person more when we see a long list of qualification behind the person's name. Note that Xiaxue's sham training company's trainers have a lot of credentials. I don't even recognize most of the associations and organizations that they are affiliated with but they do look legit to an outsider like me.

I also mentioned in the my Anti-Scam article on how scammers gather testimonial to make their scams look more convincing. In the case of XiaXue vs GC, Xiaxue set out to entrap a Gushcloud's influencers into endorsing the service of an non-existent training company, even without trying out the service. Did she succeed?

Judging from the lady's outfit in sport's attire, the audience will naturally assume that she took a picture at the gym where SG Private Trainers is located. 196 people liked the post. Naturally, her fans will assume that the service of SG Private Trainers is pretty good and many probably emailed the sham company asking for a free one month trial.

And I barely has any likes on my instagrams or facebook after my runs. (Sighs)

Now, we just need to transform all these trainers into professional money managers with suits (There should be plenty of stock pictures of successful men in suits), make the website look a lot nicer and pay a few actors to do up a few testimonial videos and hire a few online personalities who are greedy enough to endorse the investment product without actually knowing what they are getting into and Wala! We will have a professional money scamming website ready to accept your investments via credit cards and paypal.

That's what Profitable Plot did when they engaged English Premier League's Legends Bryan Robson from Manchester United and Steve McMahon from Liverpool. Many people bought into the message since legendary footballers should be smart with investing and since they both live in UK, they should know UK land like the back of their hands...

How many Singaporeans even know how much you need to pay to buy or lease a piece of farmland in Lim Chu Kang... 

The moral of the story for influencers, especially the younger ones:

Please do your research well before accepting any advertorial or fees, even if they have been vetted by your agency. Make sure that the companies and the products that you endorse are legit and does not bring harm to consumers. Your influencer career may be destroyed for good even though you may think that you are an innocent party. During the Lehman Brother's Mini Bond saga, many relationship managers careers were permanently ruined for selling Lehman Brother's product, while the financial institutions which were supposed to have done their research carefully before asking their bankers to sell the products, were let off lightly with only a light fine. As a financial adviser, I select my product pool carefully these days, when recommending financial products to my clients and I seldom trust the recommendations given by the financial institutions. Their job, afterall, is to convince the financial advisors (who is the client), that they have the best product in the world.

The moral of the story for consumers: Don't always believe what you read (This advice is so old... but still good!). Marketing is a war to make a product seems better than it is and the job of a marketeer is to make use of the fear and greed of consumers to get people to purchase their products.

But you should trust whatever you read on this blog and trust no one else...

Or you should not...

P.S. By the way, setting up a investment scam website is an capital offense to humanity. Please do not get inspired by Xiaxue for the wrong reasons! 

1 comment:

  1. haha! i really like how you explained it so well. yes you are absolutely right there. most of these sotes are scam and nothing else. well thankyou for bringing all this to our knowledge.


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