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Margin Trading Scam...

First post First post
Author
Idicious Lightbane
Garoun Investment Bank
Gallente Federation
#81 - 2013-06-06 06:07:43 UTC
Margin trading scams are generally very obvious if you know what you're looking for, generally follow the rule if it looks to good to be true it most likely is. Why would someone create a contract undervaluing an item that he could sell for more directly on the market?
Mara Rinn
Cosmic Goo Convertor
#82 - 2013-06-06 06:10:59 UTC  |  Edited by: Mara Rinn
Yup, there is a margin trading scam. Now you know how to spot one, as will the people who bother to read the forums.

Edit: and those players with enough common sense to realise that if an offer looks too good to be true, there must be a catch.
Kaarous Aldurald
Black Hydra Consortium.
#83 - 2013-06-06 06:11:17 UTC
Honestly, "how to spot a margin trading scam" needs to be in the manual, I am starting to think.

"Verily, I have often laughed at the weaklings who thought themselves good because they had no claws."

One of ours, ten of theirs.

Best Meltdown Ever.

Sevastian Liao
DreamWeaver Inc.
#84 - 2013-06-06 06:11:37 UTC  |  Edited by: Sevastian Liao
Curious anecdote in no way related to the OP:

In my part of the world, largely due to lack of governmental oversight a variety of loan - providing "businesses" offer loans with interest rates almost 4-5 times that of a legal financial institution. They provide loans to startups and small businesses in need of liquid cash, the type that larger banks and finance companies would not consider financing. Now, whenever someone defaults on a contract signed with such below - the - table companies, the companies in question typically resort to hiring thugs to intimidate the defaulter into making good on his promise. At which point said defaulter has learned to run to a local politico, who in turn relates the entire sob story to the local media always keen to take the side of the poor, bullied small man.

I'm acquainted with a few characters behind such operations, and a few of their clients. The clients who made good on their promise have generally held the opinion that even though the interest rates are excessive comparitively, the loans have proven life - saving at times - and that the people providing them are rough but will leave you alone as long as you uphold your end of the agreement. Interestingly, even if they had trouble coughing up the cash for a particular week/month, usually it is probable to negotiate some sort of settlement - Longer period with a reduced interest rate, for instance. Much like any other legitimate financial institution. The loan providers don't view themselves as bad people (who does?) but have also related that many of the defaulters had no serious intention of making good on their promise right from the start. Such providers are doing business, in their own words, and would rather take a significantly reduced profit from giving concessions to the defaulter rather than having to go to the trouble and cost of calling in bully boys on top of losing the entire loan itself.

So basically - Where shady business practices meet unbridled greed, you get lots of finger pointing, no small amount of tears, and little to no assumption of personal responsibility. Usually, from the first one to claim the moral high ground.
Cannibal Kane
Viziam
Amarr Empire
#85 - 2013-06-06 06:45:35 UTC
Falling for scams it not a new player thing.

Being in channels where I see people get ripped old and young is amazing. I never really understood how it is possible for to fall for them as I watch the convo going.

The only thing I actually hope from this is that people learn from that mistake.

"Kane is the End Boss of Highsec." -Psychotic Monk

Kaarous Aldurald
Black Hydra Consortium.
#86 - 2013-06-06 06:49:07 UTC
Cannibal Kane wrote:
Falling for scams it not a new player thing.

Being in channels where I see people get ripped old and young is amazing. I never really understood how it is possible for to fall for them as I watch the convo going.

The only thing I actually hope from this is that people learn from that mistake.


Out of curiousity, what is a good policy in this instance? (I ask you because, if anyone knows the dirty side of this game, it's your esteemed self)

I simply tend to go into paranoia mode, and assume that anyone posting in local is a scammer.

"Verily, I have often laughed at the weaklings who thought themselves good because they had no claws."

One of ours, ten of theirs.

Best Meltdown Ever.

Mr Epeen
It's All About Me
#87 - 2013-06-06 07:12:58 UTC
The ol' margin trading scam. I remember it well.

The only scam I've fallen for ( well I have bought 6.5m shuttles but that's just plain stupidity).

I still don't like that mechanic. The skill is there for no reason but to scam and all margin scams are not that obvious. They can be pretty subtle and for a new player, impossible to catch. They have enough on their plate just trying to learn the basics. Expecting them to understand advanced trading is simply pushing it.

There really should be something in the tutorial about it.

Mr Epeen Cool
Abraham Nalelmir
Viziam
Amarr Empire
#88 - 2013-06-06 07:23:47 UTC  |  Edited by: Abraham Nalelmir
My first days of EVE... made some good iskies, saw that stupid I'm giving away all my stuff for 1 tritanium and I was about to fall for it if not for the colors on what to take and what to give on that contract

Now, I got natural resistance against any type of scam, not only that tritaium one (though sometimes I lose good deals because I was like 'this is a scam don't go for it' and it turns out to be an awesome deal of ore or ships bpcs...)

Everyone has his first time

In Go.. ECM I trust

Aribeth Fireeye
The Scope
Gallente Federation
#89 - 2013-06-26 17:27:00 UTC
Just got back to eve after a long hiatus. I've played sporadically and never for more than a couple of weeks (character from 2003 and around 7 mil sp) but I decided to try it out again. First thing I do, loose a bulk of my very frugal wealth due to this scam...I'm pretty sure Margin trading skill didn't exist when I last played. Oh well, isk lost is a lesson learned. Hopefully I can find a corp that will finance my losses.
Jimmy Morane
Deep Core Mining Inc.
Caldari State
#90 - 2013-06-26 17:37:32 UTC
[quote=Aribeth Fireeye] Oh well, isk lost is a lesson learned. Hopefully I can find a corp that will finance my losses.[/quote

Do you also have an amazon wishlist perchance?
Aribeth Fireeye
The Scope
Gallente Federation
#91 - 2013-06-26 18:08:55 UTC
Jimmy Morane wrote:
[quote=Aribeth Fireeye] Oh well, isk lost is a lesson learned. Hopefully I can find a corp that will finance my losses.[/quote

Do you also have an amazon wishlist perchance?


You make it sound like it was a lot of money I lost, I lost chips to most people. A new BS would suffice to cover the losses.
Mytai Gengod
Sebees
#92 - 2013-06-26 18:16:06 UTC
Frankly, this and other threads won't stop this from happening again and again and again. I wish they would address it since it relies on inconsistencies in the mechanics but it's no sweat off my back if they don't.

While I've not fallen for this, the fact is new players are repeatedly told that there is isk to be made with ttrading, arbitrage and hauling. Most players who have even a slight interest in trading will at least consider someone's margin trading bait.

Some will research well enough to realize that there is a skill that allows you to screw other players by posting a buy you never ever intended on filling.

But it's allowed. At this point, have to assume it is encouraged. So players who have fallen for this or were about to: consider the fact that this mechanic is still in game after this amount of time as a green light to use this to screw new subscribers to get back your isk.
Frostys Virpio
State War Academy
Caldari State
#93 - 2013-06-26 18:32:21 UTC
The only way they could of made it different is to let the market fish isk out of your wallet if a sales overpassing the limit you already have set away in escrow can't cover the buy. It could neg-wallet some people for some time but they should technically have assets to cover for that with what they just bought.

In the end tho, the rules are the same for everyone so we only have to learn it and deal with it.
RomeStar
Caldari Provisions
Caldari State
#94 - 2013-06-26 20:48:33 UTC
Aribeth Fireeye wrote:
Jimmy Morane wrote:
[quote=Aribeth Fireeye] Oh well, isk lost is a lesson learned. Hopefully I can find a corp that will finance my losses.[/quote

Do you also have an amazon wishlist perchance?


You make it sound like it was a lot of money I lost, I lost chips to most people. A new BS would suffice to cover the losses.



He was calling you Mintchip she has a wish list on amazon its full of pink dildos.

Signatured removed, CCP Phantom

Anti-social Tendencies
Society for Miner Education
#95 - 2013-06-26 21:17:59 UTC  |  Edited by: Anti-social Tendencies
Tub Chil wrote:
didn't read the wall of text but margin trading is a flawed feature and needs to go.


Hardly. Margin trading is a great skill to train that benefits the traders in Eve. Sure there are players that use that skill to create scams but they really are easy to spot.

Using your argument we should get rid of the thermodynamics skill because it makes suicide ganking so much easier. Or get rid of the contracting skill because players can use contracts to scam other players. Or not allow corpmates to shoot each other without Concord intervention because there are some players that use that mechanic to get cheap Corp kills on unsuspecting corp members.

Eve is harsh and not for the inattentive or stupid.

"Patience: n, a minor form of despair, disguised as a virtue." - AMBROSE PIERCE

Anti-social Tendencies
Society for Miner Education
#96 - 2013-06-26 21:34:32 UTC
Mr Epeen wrote:


I still don't like that mechanic. The skill is there for no reason but to scam and all margin scams are not that obvious. They can be pretty subtle and for a new player, impossible to catch. They have enough on their plate just trying to learn the basics. Expecting them to understand advanced trading is simply pushing it.

There really should be something in the tutorial about it.

Mr Epeen Cool


If you truly believe that there is no purpose to the margin trading skill but to scam, then you truly ignorant of a whole portionof Eve economics. I have a trade character that will often have a a couple hundred outstanding buy orders at any one time. They are legit orders which are always covered . I make ISK and sellers are able to sell their goods at what they consider a goo price. As CCP would say... Working as intended.

"Patience: n, a minor form of despair, disguised as a virtue." - AMBROSE PIERCE

Rob Crowley
State War Academy
#97 - 2013-06-26 21:45:07 UTC
Anti-social Tendencies wrote:
Eve is harsh and not for the inattentive or stupid.
Except in case of the margin trading game mechanic you don't have to be inattentive or stupid or even greedy to not know that buy orders aren't guaranteed. Contracts are guaranteed and so are sell orders, it's in no way intuitive or obvious that buy orders are not.

I don't like this particular game mechanic even though I generally don't mind scams. It could be fixed rather easily without disrupting the regular use of the margin trading skill by checking if all individual buy orders are covered and cancelling the ones that aren't whenever your wallet and/or escrow changes.
Elliavir
Miskatonic Mercantile
#98 - 2013-06-26 22:03:17 UTC
Portia Venetia wrote:
Generally I agree with the sentiment that most scams in EVE are "legitimate" and every buyer should beware. The Margin Trading scam is the only one that I feel is unbalanced far in favor of the perpetrator over the mark, and that the fault lies mostly with CCP.

First and foremost, as has been mentioned here, this scam is perpetrated in what is supposedly a broker-operated commodity marketplace. The impression is given, particularly to the new player, that the market may not offer the best "deals" but is a forum for open and transparent transactions, unlike the wild and woolier contracts or direct trades.

Building on that point, many people likely approach EVE with some working knowledge of trading on commodities/securities markets. But as just about anyone here knows at this point, there is a distinct and profound disconnect between what "Margin Trading" is in EVE versus the traditionally accepted definition of that activity in any other market. Buying on margin is a well established practice in RL markets, and at least in every trading system I've ever seen has this in common: a buy order that is filled will be completed. It will always be the buyer and not the seller that is on the hook for a margin call.

EVE, of course, works completely in reverse. When the margin is called and the buyer comes up short, the seller is left holding the bag (of unsaleable goods).

I would personally like to see "Margin Trading" in EVE aligned with what trading on margin actually is; if you overreach with a buy order and it is filled, then tough luck Charlie you now owe a pile of money to the brokerage. This however will result in negative wallet balances which everyone screams is "completely unfair."

At the very least, it would be nice that "unbacked" buy orders (those buy orders that cannot be completely filled) were highlighted in red text in the market; it would give a clear indication that something was up instead of the (relatively) invisible nature of this scam now.


I agree that it would be great to be able to tell the difference between buy orders that are fully funded and ready to complete right now, and those that are not. I've had perfectly boring transactions at very standard market prices run into the "wait! let us set up a sell order for you because that guy ran out of money!" from the ever-helpful brokers, and it's just effing annoying.

I'd rather see the margin trading risk switched over to the buyer, also... but making underfunded orders visible would be a step in the right direction for market clarity.
Elliavir
Miskatonic Mercantile
#99 - 2013-06-26 22:13:55 UTC
Katran Luftschreck wrote:
CCP could destroy margin trading scams in one day with just a few lines of code... if they wanted to.

How? You know how when people get busted cheating CCP will knock their ISK account into the negative and force them to work their way back out of the hole?

Allow the same thing to happen when people don't actually have the ISK to cover a margin trade. Their ISK balance is now negative. Have fun getting out of the hole. Oh, and you biomass your toon then the bill gets passed to the next one on the account.

Problem solved. Very easy. If they wanted to.

Sad reality, though, they don't want to. Welcome to Sociopaths Online.


The potential for abuse of this is HUGE. You could essentially create free ISK by "selling" overpriced crap to an alt account with an underfunded buy order. And then just let that alt account languish in the negative forever.

I'd still like to see some way to transfer the risk to the person placing the buy order, but preferably without opening up a huge scam potential and without hurting the legitimate traders who use the skill to manage their businesses.
Rob Crowley
State War Academy
#100 - 2013-06-27 07:26:48 UTC
Portia Venetia wrote:
Generally I agree with the sentiment that most scams in EVE are "legitimate" and every buyer should beware. The Margin Trading scam is the only one that I feel is unbalanced far in favor of the perpetrator over the mark, and that the fault lies mostly with CCP.

First and foremost, as has been mentioned here, this scam is perpetrated in what is supposedly a broker-operated commodity marketplace. The impression is given, particularly to the new player, that the market may not offer the best "deals" but is a forum for open and transparent transactions, unlike the wild and woolier contracts or direct trades.
Agreed, except for the thing about contracts. Contracts actually are very open and transparent; unlike the market with its margin trading buy orders contracts do exactly what they say.

Quote:
I would personally like to see "Margin Trading" in EVE aligned with what trading on margin actually is; if you overreach with a buy order and it is filled, then tough luck Charlie you now owe a pile of money to the brokerage. This however will result in negative wallet balances which everyone screams is "completely unfair."
The main problem with this solution is not that it is unfair, but that it is an exploitable ISK faucet. This creates far more problems than it solves because you can't ensure that a character with negative wallet balance ever pays back his debt to the economy.

Quote:
At the very least, it would be nice that "unbacked" buy orders (those buy orders that cannot be completely filled) were highlighted in red text in the market; it would give a clear indication that something was up instead of the (relatively) invisible nature of this scam now.
That would work, though I think just removing those unbacked orders is the simpler solution.