Smart About Money: “Historic fraud” – when FOMO leads to FOFO

Nick Maffeo Sometimes young people wonder why many relatives and friends in their 40s, 50s, 60s, 70s and beyond are so resistant to The Next Big Thing – like cryptocurrency, for one example.

The specifics always vary but the hesitancy is usually because the older people have “been there” and “done that.” They worry about getting burned. Or getting burned again.

As Holman Jenkins recently wrote in The Wall Street Journal regarding the bankruptcy of cryptocurrency exchange FTX, “The story doesn’t ring any bells for novelty or originality – it was a superficial fascination with a young face and their short-lived, overnight wealth based on gee-whizzery that nobody really could explain.”

In the case of FTX, the promises of “overnight wealth” turned out to be an “historic fraud” according to one newspaper headline, with FOMO (fear of missing out) leading to FOFO and investors’ fear of finding out that their money was really gone.

Nobody wants that. No one wants to wake up one morning only to discover that their money has disappeared, probably forever.

It’s not always a fraud connected to a new idea that leads to “fear of finding out” situations. According to Forbes, PayPal recently faced a backlash for having a line in their Acceptable Use Policy which said PayPal customers were subject to a $2500 fine for spreading misinformation on PayPal.

When the news broke, some people asked, “Can PayPal do that?” Though it does not seem as if PayPal has levelled any fines so far, the answer is, “Yes, of course they can do that.” Customers typically have to accept an online company’s user agreement or not use the company’s service at all.

“Sophisticated software algorithms” can cause problems too. The Federal government recently discovered that the algorithms used by some online/fintech lenders apparently overlooked Fair Lending laws and Truth In Lending regulations. Which means those lenders may have discriminated against some borrowers.

The online and fintech lenders say it was an honest mistake. That may be true. But why is it so often it’s the online hotshots that seem to have trouble with outright fraud, consumer protection and complying with long-established regulations?

Humans are hard-wired to want to try new things. Most people would not want to live without the advances and innovations of our modern world. Most are interested in a genuine opportunity to get in on the ground floor and strike it rich.

Humans are also hard-wired to not want to lose what they worked so hard to get. Which is why it’s important to be able to assess the level of risk you’re taking when getting involved with new ideas and opportunities.

Consider your level of comfort with a company’s track record and their ability to stand behind claims they make. Do as much research as you can so you better understand and fully accept what you’re getting into. Can you actually reach a person to help you if something goes wrong? Can you start small? Can you easily back out of the deal and be made whole?

Consumer protection regulators are always playing catch up, usually after some sort of disaster. Which is why – when the “fear of missing out” is at a fever-pitch – for many that’s a clear sign to proceed with great caution, if at all.

If something feels too risky for you, no amount of “gee-whizzery” should push you past your personal level of wariness. “It was great until it wasn’t” happens all the time. The less “fear of finding out” you have to deal with in life, the better.

Nick Maffeo is the President & CEO of Canton Co-operative Bank – right next to the Post Office – in Canton. Have a question? Email to

Previous Post
“Good Ideas!” e-Newsletter January 2023 – Ways to fight scams and Pie Day Plus thanks!
Next Post
Smart About Money: Easy ways to help scam-proof yourself

Accessibility Toolbar