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Classic tricks by financial con artists

Classic tricks by financial con artists (Thinkstock)
They're the type of sales tactics you see on Fair Go nearly every week. Whether the person is selling, financial products, beds, vacuum cleaners, life insurance, or even mobility scooters, they use the same underhand tactics to part people from money.

Here are some classic tricks from these slimy financial salespeople:

Prepare to be softened up

Slimy salespeople typically take time to get to know you. Really they're finding out personal details and how much money they can fleece you for.

Dazzling performance

They show you graphs that make it look like your money is going to grow exponentially. Yet they fail to factor in tax and inflation — so the reality is that you'll be disappointed with your investment, by which time the nice salesman is sunning himself in Bali or Barbados.

Your new best mate

This person who has cold called you or even arrived on your doorstep suddenly becomes your best mate, chatting and laughing and pretending to be on the same wavelength as you. He or she may use some standard body language techniques, such as mirroring what you do, which makes you feel at ease with him or her.

Same-day sales techniques

Sign today and you'll get the deal of a lifetime. Yeah right! If you're pressured to buy on the same day, it's a bad deal and the salesman doesn't want you to find this out.

Friends and family

Pyramid schemes and multilevel marketing salespeople often use what they call "warm contacts" to do business. They approach friends, family, or even members of their church to recruit new people to the pyramid because you'll be more receptive to their rip-off than a stranger.

Introductory offers

They give you something for free or "cheap", cash back, or even scratch cards, to hook you in. It may be a free seminar, a free DVD player or whatever. These are classics of companies trying to sell you anything from rental property to timeshare. The seminar will simply be a sales pitch and the DVD player is to make you feel indebted to the company or salesperson.

Praise

The financial salesperson will say that it's up to you, but they highly recommend this product. They want to make you think you're smart to buy whatever it is they have on offer. "You'd be crazy to turn this offer down," they suggest. Pull the other one.

It's free

Advice from financial, mortgage, and insurance sales people is "free". The company pays these advisers, which means they're not always offering you the best product for your circumstances.

Concern for your wellbeing

If the salesman earns commission or has targets to meet, their concern is for their pay packet, not your welfare.

Supersize my insurance

Life and health insurance sales people in particular con you into buying a new policy because it's "better" or "cheaper" or whatever. They get commission every time they sell you an upgrade and have a vested interest in finding you a "better" policy every two to three years. It's not uncommon for people to find that the new policy doesn't cover illnesses the old one might have.

Don't let these points get in the way of investing. Just be on your toes before handing money over for anything.

The harder the salesman tries to get you to sign on the dotted line, the more likely it's going to be a poor buy. Ask yourself 'am I fresh meat for these sharks?' Their products may be legal, but are they in your interest to have them?

Finally, make sure your adviser or insurance sales person is listed on the Financial Service Providers Register and be wary of anyone who isn't.

Your say: what's the worst sales technique you've been subjected to?

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