March 2005 Topics
Click Fraud (PPC Fraud),
Forer Effect (Barnum Effect),
On the Q.T., and Predatory Lending
 

Click fraud costs online advertisers
US$1.6 billion in 2004.
 

Fraud In Other Words: Professional Jargon
and Uncensored Street Slang
By Larry C. Adams, CFE, CPA, CIA, CISA

 

Click Fraud (PPC Fraud)
Click fraud occurs online when special software programs, or individuals, click on advertising links that appear next to search results or articles in order to force the advertisers to pay for the extra clicks. Pay-Per-Click (PPC) advertising lets marketers gain exposure on a Web site and only pay when a potential customer clicks their ads. Advertisers pay an average of 45 cents per click, but some pay US$15 per click. Click fraud costs 20 to 50 percent of the US$3.2 billion paid in 2004 for Pay-Per-Click advertising. The most common method is the use of a clickbot, which is a software program that can simulate clicking on different ads on any Web page, at any URL (Uniform Resource Locator), at predetermined, random intervals, while showing a different IP (Internet protocol) address each time to hide its identity. A growing scam is a “click farm” which employs workers for $100 to $200 per month in China, India, and other countries to click on text links and ads. A third form of click fraud takes place when employees of companies do “drive-by clicks” on rival ads to deplete their competitors’ marketing budgets and skew search results. Google Inc. developed the world’s largest search engine and relies on advertising for 95% of its revenue. Google employs its own fraud squad and proprietary technology to fight click schemes and reduce refunds to advertisers.
Stephanie Olsen, CNET News.com, http://news.com.com/
Exposing+click+fraud/2100-1024_3-5273078.html, July 19, 2004.

 

Forer Effect (Barnum Effect)
Psychologist Bertram R. Forer (1914-2000) published an eye-opening study that he called “a demonstration of gullibility.” Forer found that people tend to accept vague and general personality descriptions as uniquely applicable to themselves, without realizing that the same description could be applied to just about anyone else. People also tend to accept questionable or false statements about themselves if they think the statements are positive or flattering enough. The Forer Effect explains why so many people think that pseudosciences work, like astrology (the study of planet positions and their effect on you), astrotherapy (using astrology to guide a transformation of your personality), cartomancy (fortune-telling using playing cards), chiromancy (palm reading), enneagrams (using a geometric figure to determine nine personality types), graphomancy (examining your handwriting to analyze your personality), biorhythms, fortune telling, crystal ball gazing, and psychic hotlines. The Forer Effect also is known as the Subjective Validation Effect or the Personal Validation Effect. In related studies, psychologist Paul Meehl (1920-2003) originated the expression, “the Barnum Effect,” in deference to P. T. Barnum’s reputation as a master psychological manipulator, museum promoter, and circus owner. Phineas Taylor Barnum (1810–1891) said, “A good circus has something for everyone.” “Barnum Statements” is a psychological term for boilerplate personality descriptions, like those in astrology books. People tend to seriously overestimate the degree to which Barnum Statements fit them uniquely. More Barnum trivia: Barnum did not originate the phrase, “There’s a sucker born every minute.” His bitter rival, David Hannum, made the sucker quote in 1869 when thousands of people flocked each day to see Barnum’s exhibition of the Cardiff Giant, a flagrant copy of Hannum’s nearby Cardiff Giant exhibition. Hannum filed a lawsuit against Barnum and lost, when Hannum confessed in court that both petrified giants were archeological hoaxes carved from gypsum.
Robert Todd Carroll, The Skeptic’s Dictionary, http://skepdic.com/forer.html, October 7, 2004.
Photo: www.uua.org/ info/photos.html

 

On the Q.T. (Strictly on the QT)
Something done in secret. A secret meeting, not open. Secret information told to someone “off the record”, which should not be printed or disclosed to anyone else. The information may involve corporate plans, criminal activity, or political schemes. “On the quiet” is a slang phrase that dates back to 1884. Q.T. is an abbreviation for quiet.
John Ayto, Oxford Dictionary of Slang, Oxford University Press, New York, 1998, page 291.

 

Predatory Lending
Predatory lenders target the elderly, low wage earners, and minority homeowners who have equity in a home and also may have credit problems or need cash. The deceptive lenders charge exorbitant fees, extra points, high interest rates (15 to 20 percent), and single premiums for unnecessary credit life insurance. Predatory lenders use high prepayment penalties and adjustable rate mortgages that increase without regard to market conditions. They flip multiple loans, strip equity from homes, add balloon payments, and lend money without considering the borrower’s ability to repay the loan - sometimes resulting in foreclosure. Twenty states have passed predatory lending laws. Household International agreed to pay a settlement of US$484 million in 2003 for unfair and deceptive mortgage lending practices.
http://www.ag.state.az.us/consumer/Predatory_Lenders_Book.pdf, July 2002.

 

ã Copyright 2005 Larry C. Adams.
All rights reserved.
 

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