Thwarting Con Artists Looking to Prey on HNW ClientsThwarting Con Artists Looking to Prey on HNW Clients

If your clients are part of a family business or if they’re well-known, they’re up against a disturbing fact. They could be targets for predators who are after their money, prestige, contacts, company secrets or maybe their scalp.

While run-of-the mill phone and online scammers are, sadly, an increasingly common trouble for clients of all stripes, those involved with high-net-worth families or enterprises are open to attack on even more axes.

Fortunately, forewarned is forearmed. Sharing with your clients these four principles could save them time, money and heartache.

Con Artists Can Be Anyone

For a start, no one should imagine that they’re immune to personal charm and charisma. Remember that Bernie Madoff and Elizabeth Holmes were able to con some of the savviest investors in the world.

The problem your clients will be up against is that the con artist who’s targeting them may appear to radiate trustworthiness. As my late father, the co-founder and president of the Sheraton hotel chain, used to say, “If a con man looked like a con man, he wouldn’t be a con man.”

What can your client do to counter the charismatic predator?

Here’s what Frank Perdue used to do. Before hiring someone or buying someone’s products or services, Frank would typically check their references–but with an unusual twist.

Let’s say the person’s name is Albert. Frank knew that Albert might “line up his references like myna birds, ready to tell me whatever he wanted me to hear.”

Frank would call each of the references, but he also asked each of the references, “Who else knows Albert?”

If the decision was an important one, Frank would talk with these additional people, but he’d also ask them, “Who else do you know who knows Albert?” Frank told me that he’d often talk with 12 or more people before making an important hiring or investment decision.

Mirroring, Designed to Loosen One’s Guard

Your clients also need to know about mirroring. This is a technique designed to get people to let their guard down.

Wendy Craft, chief of staff of Fulcrum Equities LLC, a single-family office, gives an example of how mirroring works. “Let’s say you’re on the phone, being pitched by a woman—we’ll call her Adele—whose product interests you,” Craft begins. “The conversation starts with a few pleasantries, and then Adele asks in a warm, engaging tone, ‘Tell me about yourself!’”

In Craft’s experience, “Tell me about yourself,” is a common phrase used to set you up for “mirroring.” Adele may be trying to get information on your habits, interests, charities or politics.

She may be doing this so she can mirror back to you whatever you care about. You love modern art? She adores it. You’re a morning person. So is she!

Adele is establishing commonalities, so you start feeling, “She’s like me! I can trust her.” If you’re not aware of this technique, you may let your guard down and make decisions that aren’t in your best interests.

How do you counter it? Craft recommends, “Whether on the phone or in person, get used to not sharing personal information about yourself with strangers. You don’t need to be paranoid, but keep in mind that real trust is established gradually over months or years.”

Friending, a Cover for Industrial Espionage

Friendship can be a perfect cover for industrial espionage. Your clients need to be aware that “friending” can be used on anyone with trade secrets.

Sam Levy, president and CEO of Condor Security Enterprises and YOOSEC Technological Solutions, has an example of the lethal but invisible security threat a confidence person might pose when friending your clients.

“Industrial spies love to attend conventions,” says Levy. “They’re there to target people with proprietary information.”

According to Levy, “When they’re targeting someone, they study what kind of men or women they like, what their hobbies are and what their home situation is like. In the course of months or even years, the industrial spy becomes good friends with their target.”

In Levy’s experience, the way this con works is, after a while the target no longer has their guard up. Bit by bit, the target unintentionally divulges to his “friend” information on products or patents or strategies.

According to Levy, if your client is involved with a multi-billion-dollar company, there could be a dozen professionally trained, highly paid spies at work, wanting to make friends with your client.

Counter this by letting your client know that if they have valuable proprietary information, malicious competitors don’t have to practice cybertheft. They can get the information using the technique of friending.

Stalking

Unscrupulous individuals try to attend family office events where they can interact with high-net-worth individuals. Craft points out that people who run these conferences do their best to police them and to keep predators out.

Still, here are some precautions your clients could take.

Your clients will need to find the right balance between trust and paranoia. My own view is that trust needs to be earned. I love to remember what my dear late father used to say, “All my life I have been paranoid, and it has made me pots and pots of money.”

Mitzi Perdue is a businesswoman, speaker, and author of The Frank Perdue Way, Simple Steps. Super Success. If you have personal stories about confidence men or women, share them with her, [email protected]