Fool me once – shame on you. Fool me twice – shame on me. That’s how the old saying goes. However I happen to notice that people in PPE tend to make mistakes all over again, and I believe the reason for this is that they don’t see the so called “red flags” – signs that a deal is not genuine and that there is something fishy going on in the background. So to help others in avoid headaches and fake deals, we gathered five red flags that are signs for us to terminate communication with the people that have offered such nonsense.

NCNDA, LOI, LOA, ICPO, POF

I have already discussed these in numerous posts, and other, more experienced people have also called out these malpractices. All these arcane documents you have never heard of earlier are usually clear indicators of a scam. But let me explain this in detail:

  • An NCNDA always indicates that you are in contact with a broker. If a Seller or a Buyer wants you to fill out these, he’s tricking you and he is not real.
  • LOI: LOIs are the least evil of these documents, the only problem with them is that they have zero legally binding effects. They can be useful because they work essentially like a full specification of a request, however they are legally worthless.
  • LOA: That is always so funny when some shady lawyer is attesting something. If you take a close look on these, you usually see that in 99% of the cases, the lawyer only attests that the buyer is willing to buy, or the seller is willing to sell. However they never attest the financial background or the availability of the products.
  • ICPO: A very problematic document. Since these are “irrevocable”, brokers usually want to lay their hands on one of these, because they can go fishing for a “real” seller. And whatever they find, the buyer has to take it, since he issued an irrevocable document. Or at least that’s what the brokers think.
  • POF/BCL: By far the most shady document. Proof of Funds can be sold for money for criminals and these will be used for blackmail, credit fraud, even kidnapping in some parts of the world. Whatever happens, never ever give out any POF to anyone. No real seller will ask you for these.
(Source: Kapsersky)

A2A calls

A2A calls usually lead to two things: a fraudulent individual who tries to impersonate a real lawyer, or a greedy lawyer trying to cut out others. Anyway, A2A calls are only needed if the payment method is escrow (since escrow is released when three lawyers, the sellers, the buyers and an escrow attorney agree and mutually release a fund). If you see TT, Direct Wire or LC as payment method, and the SOP requires an A2A call, it is an immense red flag. (And if someone says A2A is needed to verify the other party, they are mistaken – lawyers don’t need a call to do that in general.)

Seller / buyer without corporate e-mail address

Let me translate the clear meaning of this for you: “Look at me, I’m a big shot with millions of dollars yet I cannot afford to buy a domain name for $10/year.” If you see a seller or a buyer (or even an attorney…) without a corporate e-mail, run. They are scammers.

LinkedIn profile with something like “Seller Mandate for Oil, Bitcoin, CBD, Real Estate and PPE”

No, no, and again, no. The last polyhistor was Leonardo Da Vinci, not you. All of these products require a certain knowledge and experience. If I see something like this, it roughly translates into the following:

I will harass you with every “wonderful offer” I come across on the internet. I don’t know anything about these industries, and I don’t care if the offer is real because I want to become Jeff Bezos overnight.

Wonderful people to do business with, huh?

The magic words: “It came from a trusted source”

I have encountered so many nice people falling into this trap. A trusted source, huh? For me the concept of “trusted source” doesn’t exist in the PPE world. Either someone can show proofs or they cannot. And that is the core difference. It doesn’t matter if it is a long-time partner, a childhood friend or even a family member – everyone can be tricked and they will involuntarily drag you into a scam. So please, if your only evidence about the genuinity of a deal is that “it came from a trusted source”, double-check it. You will be shocked how many of these are indeed scams.


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