Firepower scam

To many of us, this scam is about as surprising and the sun rising in the east this morning. What is surprising, but probably shouldn’t be, is the number of people who fell for it. Some of these people should have known better based on what the product was claiming, all should have known better using simple common sense.

When something sounds too good to be true it usually is.

“He said it’s going to be bigger than Microsoft, and I thought Whoa!” – investor (courtesy of ABC four corners)

[This scam: Make claim unsupported by any scientific evidence that you can improve fuel efficiency by a lot, at least 10%, using various methods. Set up a company and sell shares, promising that you have or are about to have valuable contracts from various companies that will use this product. Collect money as people buy shares believing the lies you tell. Run away with money.]

When this happens it is always prudent and wise to spend a bit of time investigating what is actually being claimed. However in this particularly scam it would appear that due diligence was rarely seen. How people can throw around hundreds of thousands of dollars and not have a clue is really beyond me. Perhaps my life experiences are clouded by not having more money than sense. And having more sense is surly no guarantee of gaining more money.

However in this particular case the incredible lack of anyone able to investigate the claims is truly astounding. It would appear that one person, out of the hundreds, if not thousands involved, questioned this company and raised the issue with ASIC. The rest were just sucked in and lost a packet.

The whole issue with fuel efficiency and getting more clicks for your buck really took a leap after the oil crisis in 1973. At this time a whole pile of people tried “inventing”, and advertising, and scamming their way to riches by offering amazing claims over fuel consumption. Lets face it, the vast majority of us use petrol and our cars a lot and it’s a major bill each week. How nice it would be to save 10% or more on petrol bills? There is a huge latent market for this sort of scam and generally most people know only how to operate their car and have no need, or desire, to know how it operates. The fuel efficiency of cars varies from 16mpg to over 40 mpg over the common cars currently on the market. With these figures in mind, literally, it’s not hard to imagine your 30mpg car getting 33mpg, or better. Or perhaps going from 20 to 30 mpg? Let’s face it, who really knows why you get 20mpg in the first place? That level of knowledge (hint: it’s covered in mechanical engineering) simply isn’t common knowledge. As such it’s not too much of stretch to imagine it’s possible.

However, when someone makes a specific claim, ideas move from being unknown or hypothetical into being a testable fact. It’s either true of it’s not. In this situation it is reasonable, in fact compulsory, to expect the person making the claim to be able to justify a claim with proof. And in the case when they want you to hand over cold hard cash, proof that he isn’t simply a lying scam artist. Such a thing has been known to happen.

However in the real world issues like facts usually get second shift to personal stories, anecdotes and friendships. Humans are a social creature and it’s simply natural to trust what someone in your own ‘tribe’ is telling you. This behavior has been very successful and it’s quite likely humans would not be here to be scammed if social trust had not been so successful in our history. However when humans developed this trait our ‘tribes’ had only a few hundred people and it was easy to check up on what people said and expose any freeloaders and liars. Public humiliation worked and it was difficult to be annonymous.

However in the 20th and 21st century this has all changed, radically. Our ‘tribe’ has grown through the millions to the billions and the checks and balances in social trust simply do not work anymore. In such an environment freeloaders and scammers can easily have free reign if people do not do more than they usually would, which is to trust people who are friendly. Which is where critical thinking and skepticism come into play. In modern society being skeptical of claims from strangers needs to be a regularly exercised behavior. This avoids the real problem of getting scammed yourself, along with all your friends you told about it.

Friends don’t let friends get scammed.

Unfortunately is seems nearly impossible to teach people critical thinking skills once they leave primary school. Having such skills relies on having the ability to question other people ideas, being educated enough to know how to ask useful questions and how to interpret information. However our present schooling systems seems hell bent on generating people who don’t question. And once people leave the education system there is very little chance to pick up these skills. It’s like it’s not cool to learn, or to question things or to educate oneself by reading. Compliance and social norm are the intellectual shackles that condemn someone to a passive life of consumer ignorance.

It would be interesting to see how many people who were scammed regularly read…anything. Do they understand that knowledge is basically free and you can find things out? If you have a question like, “Does this work?”, that it is actually possible to find an answer? Or perhaps the question was never asked? Most things in the world do “work” and just assuming yes is generally a good approach for most of life, it sure is easier. And if a trusted friend can give you a quick answer then what more is there to know?

One answer to this question is “The little black book of scams“, put out by the ACCC. It’s free and it’s by the people who pick help pick up the pieces when these scams occur. They are also responsible for trying to minimise these scams but like the Skeptical movement, they too are playing a game of catch up with the woo merchants generally one step ahead.

With hind site, targeting sporting people was a pretty clever idea. Especially putting some of the funds back into sponsorships. That’s a clever way to gain trust, by supporting something these people are passionate about. Generally these people have careers where critical thinking isn’t required and where word of mouth can be just as important as facts, or in this case more so. I think we’d find a larger than average percentage of alpha males, people with strong egos who are not likely to think that they, or their friends, they could be fooled. They also come from a background where playing games and entertainment can lead to a good life. No need for any bookwork,research or investigation into most things. You and I might have kittens anguishing over the details of a white goods purchase or home loan but if you have this amount of money to throw around then I can well imagine that being highly critical of your day to day spending is not high on your list.

And the sad fact is, these are exactly the sort of people who should get coaching on looking after money because they are seen, with good reason as this case proves, as a soft touch. It’s self apparent but worth pointing out, none of them showed enough critical thinking skills to prevent to loss of a large amount of money. They could all start by reading the ACCC’s “Little book of scams”. But if that’s too difficult for only 24 weekly payments of $199.95 I’ll teach them critical thinking for one hour a week. And compared to what they can loose, I think that’s a bargain.

5 Comments on “Firepower scam”

  1. Spanky says:

    Hi CoS, Sorry I didn’t read all of this post. After the first four paragraphs I still didn’t know what the scam being pulled was. Give me context! I’m lazy. :o)

    BTW, whatever happened about you contacting that doctor surgery with the woo pamphlet? I’m keen to hear how that went.

  2. AndyD says:

    I wonder how some of these things make it to the marketplace at all and why ASIC seem so hopeless at preventing them.

    In May, this year, Today Tonight ran a story on the Moletech Device which I assume is a close cousin of Firepower. As usual, the claims were incredible and the vision suggested there was a con taking place on our screens (tying “things” to hoses with zip-locks). The three devices (which look like Firepower pills iirc) were supposed to “communicate” and literally change the nature of the fuel so it burned better. The Moletech website reads like any woo site.

    The story came complete with a thumbs up from a Murdoch U. professor (who also happens to run a detox clinic for children) and anecdotal support from a massive TWO-car test by a local council.

    I saw it but I’d be willing to bet ASIC missed it.

  3. PatroyD says:

    If Firepower was such a scam, why are two of the people associated with the dodgy company on the Board of Goldstar [GDR]

  4. PatroyD says:

    The Goldstar AGM on 25/11/08 was a fiasco with discussion about director’s association with Firepower shut down and points of order ignored.

    I hope ASIC takes notice.
    Why are these people not accountable?

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