In this interview with radio journalist Debora Rosciani (working at Radio24, Italy’s top financial radio station and part of the IlSole24Ore group), Andrea returns to the topic of financial scams and focuses in particular on a key question: how to recognize and avoid them?

In his long career as a trader and trainer, Andrea has received lots of messages and emails from scam victims seeking help.

To understand how to recognize scams, he collected these testimonies and analyzed them for commonalities. This analysis revealed several valuable aspects for defending yourself against scammers.

Here are some of the themes discussed in the interview:
• Why we are all at risk (regardless of social background or capitalization)
• Why so many people trust scammers
• What to do when you receive suspicious phone calls

Enjoy the video!

Transcription

Introduction

Debora Rosciani
How can you recognize financial scams and defend yourself?

We discuss this with Andrea Unger, a 4-time World Trading Champion who has collected a dossier of real cases over the years.

Welcome back. Today we're going to be talking about scams, in particular financial scams.

The aim is to make the public aware of the main scams to which so many small savers have fallen victim over time and which are still widespread in the world of investment, especially in the world of trading.

Although more and more is written and discussed, the number of victims of these situations is constantly increasing.
So, what can we learn from the past? How can we protect ourselves to avoid these scams?

We discuss this with Andrea Unger, the only person to have won the World Cup Trading Championships four times in the Futures category.

Andrea, welcome back.

Andrea Unger
Good morning, everybody. Hi Debora.

A dossier of real cases

Debora Rosciani
Andrea, you have seen many financial scams over the years, also because it’s important for you to be aware of what’s going on in the market and how this world of financial scams affects the reputation of those who trade professionally instead.

As a result of your efforts, an articulate dossier has also emerged. As you told us in another interview, "So many people write to me asking for help, but I honestly don't know what to do."

It happens to us, too, at Radio 24, and honestly very little can be done beyond giving helpful advice and suggesting that they go and make a complaint to the Postal police and to the authorities.

But please tell us about this dossier of cases, of experiences, and stories. How did it all come about? Because really some of the stories you’ve collected are unbelievable, also because of the amount of money that so many people have lost.

Andrea Unger
Yes, I started doing this after I had received emails from several people reporting these types of scams. People who were unfortunately victims of these scams. At that point, I collected all these emails, inserted them together in a file, and tried to discover if there was some common denominator.

I also tried to discover the name of the fraudulent broker, who unfortunately constantly changes, so it is difficult. If it were possible, it would be very easy, you could just tell people "not to trust the Joe Schmo Ltd that scams you." That's it, but unfortunately, it's not that simple.

Here’s what I saw: numbers, really big numbers, hair-raising numbers.

And people who might be... Retirees who have lost all their assets, their pensions, their life savings, in the hands of these crooks. We’re talking about cases of even hundreds of thousands of euros, even more than a million of euros for more wealthy people.

Since these scammers can also figure out how far they can go with different people. I mean, they can guess who is in front of them and thus how much they can get out of the unfortunate person.

The thing that scares us the most is that, as I mentioned earlier, there are people from all walks of life and of course different cultures too.

As I said before, you don't have to only think of those people who say, “Poor me, I’m uneducated, I can be easily fooled”. No, because there are graduates here, there are lawyers, engineers, people who don’t have a financial background but still have studied and should know how things should work, and people who fell into the trap instead.

Always because these traps don't look at the qualification. They look at that side of human nature that wants to get rid of that feeling of dissatisfaction that many people have, believing that a lot of money can maybe solve their problems.

Unfortunately, that isn’t the case. Because if I tell you that a person has lost a million, you can hardly say that this person was in a miserable condition before, right?

So, it's greed, which now doesn't have to be an insult to those who have lost money, but a level of greed that we probably all have, leading us to stumble over such an obstacle here.

It’s a dossier that unfortunately grows. I don't want to say daily, but continuously.

I keep getting emails, maybe even as a result of the conversations that we've had together, so people who have listened to us, they write to me and present their case.

And that saddens me because no matter how hard you try, I see that you also do so much and other news channels try to inform their audience, warning them against these scams, there are still people who fall for them.

And even those people who had already contacted me get to the point where they say, but then maybe, no, no, no, he wasn't right, they're right, and then they fall for it.

I feel sorry for those people, then of course, as you said before, the reputable profession is also the one that’s affected because it's all from those who don't know the industry. It's all subject to the same scam.

You are in the stock market, in cryptocurrency – then you’re a scammer. Period. There's no way to argue, right? And it becomes sad because, okay, aside from resenting how you are considered, but there's also the fact that this makes clear how the financial background of the average citizen is very low, and the situation is the same all over the world. Scams are everywhere, and they all stem from not knowing how to recognize what isn’t real from what is serious, and what is clearly a scam.
And that’s pretty serious, too, I’m afraid.

Why you should always ask questions

Debora Rosciani
On the subject of Bitcoin, we’ll get to that in a moment, but I have this file we’re talking about in front of me right now.

I noticed that those who fall into these traps don't really know what investment instruments they are buying because, in this regard, let's say, these alleged brokers, who later turn out to be scammers, don't give much detail.

It can be currencies. I’ve read that someone even invested in commodities, aluminum, and other investment instruments that they really don't even name because to tell you the truth, that’s something that’s never stated.

So, with great ease, transfers are made to the bank accounts of strangers, without having the slightest idea of how that money is then invested.

These scammers are so skilled that you don't even hear a single question about it. And that’s unbelievable, Andrea.

Andrea Unger
It’s unbelievable. And they’re also riding the wave of the moment. I still remember back in 2001, before I had even started trading, but I was already interested in the sector. I got a phone call from the United States from someone who was pitching an investment on the Nasdaq.

And this person, in this case, an American, was raving about the potential of Nasdaq. When I pointed out to him that the Nasdaq had lost 12% the day before, he said that now was a good time to invest, that Nasdaq would bounce back and so on.

And so, even then, they were riding the wave of the moment.

Recently, I received a phone call from another person pitching oil investments.

It was the time when there was a lot of talk about gasoline. Unfortunately, there’s still talk about it now, but at that time there really was a lot of talk about gasoline and oil. So, he explained to me how you could make money in oil by following OPEC meetings and so on. Okay?

And I had...That’s when, I listened to him to see how far he wanted to go. I started asking him questions, right?

So, that’s when he felt slightly stung, and he got puzzled. They were sensible questions, so much so that he couldn't even answer them. However he was very good, because he started saying things like, eh no, if you want those answers you have to go to the paid service because I've already told you a lot for free. If you want to know more, we have paid consultants, because obviously, we can't give you everything for free.

In short, he turned it around like this. Later, when I pointed out to him that I had serious doubts about the honesty of all his plans, he went so far as to threaten me and said, "Look, I have your phone number and I also know where you live." I mean, we even went to a dangerous level if we want to see that.

Of course, I didn't fear any direct consequences, but, I stopped the conversation then and there. He said, "If you want, I can call you back." I replied “No, don't ever call me again”.

And so, they come -- and obviously, the most fertile field today, after the Amazon period, is now cryptocurrencies, Bitcoin.

And you know that there are many articles about fabulous returns with cryptocurrencies, particularly Bitcoin. So, assuming that most people don't understand how Bitcoin really works, what really happened. All they know is that Joe Schmo made a fortune, and then that's when they go and say, “You can also do what that person did there, just rely on us.” And then, you receive the IBAN code to make a payment.

Debora Rosciani

I also happened to get a phone call regarding this operator. When I started asking questions, the person on the other end of the phone got a little suspicious, given the number of questions, which were typical questions that maybe everybody should be asking when they receive these phone calls, he immediately started to threaten to sue me because the press, in his opinion, was harming this whole world, especially this somewhat “easygoing” brokerage.

Dream vs. Reality

Look, Andrea, going back to the cases of people who sometimes even experience drama on top of that. I’d like to point out to those following us that you also have in your file, for example, the case of a person who lost €800,000.

You just reminded us that there are also much higher amounts involved. But sometimes there are also cases of people with a much more modest budget, maybe a family budget, and even a loss of €1,000-€2,000 makes a lot of people go into an emotional tailspin.

When they write to you and think that maybe by taking a 1-month, 6-month course with you, they can get the tools they need to make up for those losses.... Again, we have to be very realistic there as well.

Your job is a job that you do from morning to night, not with the purpose of speculating, but it’s the job that allows you to earn your income, of course.

These people maybe have a little bit of a different idea of the world of professional trading. And that’s where you might also have to make a couple of points.

Andrea Unger
Yes, it’s crazy. They go off believing precisely that they can go and recover with the proper training. Of course, I try to turn away people who have been affected by this and who face this world on the emotional wave of what they've been through. I try to turn them away, not from me, but from the world of finance in general.

I try to convince them that what’s lost is lost. They need to forget about it all and resume their everyday lives.

In general, they don't listen to me. But let's just say those who have lost these amounts...It happened to me. I met this person who had lost, if I remember correctly, €150,000. He had €1,000 left and he wanted to win the money back. Now he doesn't write to me on Facebook anymore.

He would say, “But look, I can pay you well. We can split the earnings 50/50.” He was convinced that I didn't want to help him because I wanted to make more than that.... I don't know what he had in mind. I mean, he was.... And that's the other point, the fact that if I say that a clever guy can make 25-30% a year if he’s serious about the stock market.

Yes, of course, some make 80%, others make 90%, and there are those who do lose. I mean that that's an average, an annual average that one could work for, but seriously work to build this thing.

With those numbers, if they do the math, they’re going to realize that they’re never going to regain what they lost, right?

Then they hear about the barker on duty or the scammer on duty promises 100% profit per month, and they start to doubt what I’m saying.

They say, excuse me, this guy does the same job as you and makes 100% a month. You’re only making 30% a year? I say, yes, but I am telling the truth. He probably isn’t.

And then I had this conversation with a young boy who really wanted me to say you can do this.

And I said, “No look, I’m never going to tell you that, because....” And he replied, “Oh, you may have a certain technique, maybe it's a little bit outdated, but these new trading techniques are capable of..." So, I have always been wrong. So, I said to him: “If you want to hear what I’m never going to tell you, go somewhere else. I can't tell you something like that, because it's absolutely out of this world for me”.

If you want to believe me and you’re on the right side, fine. If you want to deceive yourself, as long as it's deception, that's fine. Or if you want to hurt yourself by putting your money there, well that’s your fault.

So, people tend not to want to believe the truth because the truth ruins their dreams. It destroys their plans and that’s it.

If I were told tomorrow that I have the elixir of youth, some people would fall for it, and they would want to become young again like in the movie Cocoon. Here, they would like to conquer the powers of 20-year-olds, but we know that isn’t possible, right?

And if you were to say to a doctor, "but maybe you studied years ago, and you are not up to date," the doctor would probably even go into a rage, and he would be right. This is the same thing here. The expectations, I repeat, 25%-30% per year, which may be more, for a few years, but not on average. Just look at the best hedge funds in the world, and what they’re doing right now.

It's not because they’re better. No, the good ones make those numbers, but the outstanding ones.
And so, let’s ask ourselves two simple questions.

It can't be the person who calls us at strange hours any better than the global asset managers, who do precisely that.

Then the usual know-it-alls come along and show that the Joe Schmo fund has gained 80%.

Yes, it did this year, but how much has it done on average throughout its history? And there's never the information because you only see what you want to see, right?

And that’s where it stops. And unfortunately, there’s a little bit of anger there because, as I’ve said, I've been working on this for 20 years. It could very well be that I'm the dumbest guy in the world, so I didn't realize what huge potential is out there. But I have some doubts that maybe what I think is more realistic than what's being told for other purposes. Maybe these people should straighten things out.

The correct approach to trading

Debora Rosciani
Andrea, now we’re coming to the end of our interview. Let's now explain what the Unger Method is. In other words, what is the right way to approach the world of online trading? Even though it’s a market, a world, a field that is certainly mature and populated by qualified professional traders. In reality, there are also a number of traders in this sector that trade following rules that are just their own. We can classify them in this way. Above all, there still is the belief that has been repeated throughout this interview, which is that just by taking a few steps in this world you can get rich easily.

So, let's repeat what are also the criteria for your business, namely, the fundamental pillars of your business.

Andrea Unger
Yes, I initially chose systematic trading because I didn’t understand what was going on in the markets.

So, I chose to let the computer work for me and then rely on algorithms to do my work. The algorithms are based on my own decisions. So, I tell the computer what to do, and I do it based on research made on historical market data.

What I do is I take the historical data, study what works in the various markets, and how those markets move, and then translate that into a system that automatically does what I want it to do.

All of that means that the operation that I set up, but that all professionals set up in some way, is the reaction to what’s happening, to what you see.

Mind you, there is no one who can predict the market or knows in advance where the market is going. Everyone determines based on certain things that statistically, if the market does this, then it will do that.

Statistically, it isn’t 100%. But you can build your operation on that basis. If the market usually goes up for 2 days, then I’ll enter a position for a market that goes up. But be careful. If I’m wrong and the market starts to fall, I’m going to close the trade with a loss because I was wrong.

You know, "wait and hope" is another one of those things to avoid in the stock market or "until you close the trade, you haven't lost." No! If you have a loss, you have a loss, period.

And so, the Unger Method is nothing more than a step-by-step approach to developing these strategies. From studying to creating the rules, to implementing the system, along with so many other systems, because, as you said earlier, diversification is the key.

No matter how strong it is, a single horse can never get to where many horses can get by helping each other.

So, many strategies and many systems. But don't think this is NASA stuff. These are very trivial systems and written in an even more trivial programming language, so anyone can build these kinds of systems if they approach them step by step with the humility and the study necessary to understand these basic concepts clearly, right?

Because to say that it's super simple would be a bit of an exaggeration. And it would also detract from what I’m doing. But you certainly don't need a scientist to understand how markets work from that perspective.

And hey, it can also be fun to build these systems. I mean, I enjoy it, otherwise, I wouldn't be doing it at some point either because I’m still doing it today after 20 years.

Debora Rosciani
Andrea, thank you for this interview, and, of course, I wish you the best.

Andrea Unger
Thank you, Debora, goodbye everyone.

Debora Rosciani
Before we say goodbye, here is one last piece of information. For those interested in the Unger Academy and who would like to explore further the concepts we’ve listened to in this interview, Andrea's book on the Unger Method can be ordered from the Unger Academy website.

It’s free and you only have to pay the shipping costs. So, enjoy the book!

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