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	<title>Skepticblog &#187; scams</title>
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	<link>http://skepticblog.org</link>
	<description>The official blog of the Skeptologists</description>
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		<title>Are You a Grounded Person?</title>
		<link>http://skepticblog.org/2010/08/12/are-you-a-grounded-person/</link>
		<comments>http://skepticblog.org/2010/08/12/are-you-a-grounded-person/#comments</comments>
		<pubDate>Thu, 12 Aug 2010 09:00:39 +0000</pubDate>
		<dc:creator>Brian Dunning</dc:creator>
				<category><![CDATA[pseudoscience]]></category>
		<category><![CDATA[science and medicine]]></category>
		<category><![CDATA[earthing]]></category>
		<category><![CDATA[grounding]]></category>
		<category><![CDATA[scams]]></category>
		<category><![CDATA[woo]]></category>

		<guid isPermaLink="false">http://skepticblog.org/?p=9564</guid>
		<description><![CDATA[Quite often I&#8217;ll get an email suggesting some new woo topic, and some of these are so absurd that I have to laugh and say &#8220;There&#8217;s a new one.&#8221; I got one such email last week. There is a practice called Earthing, of which I had never before heard. The idea is that you connect [...]]]></description>
			<content:encoded><![CDATA[<p>Quite often I&#8217;ll get an email suggesting some new woo topic, and some of these are so absurd that I have to laugh and say &#8220;There&#8217;s a new one.&#8221; I got one such email last week. There is a practice called Earthing, of which I had never before heard. The idea is that you connect yourself to the Earth, usually with some sort of wiring and electrodes. The obvious result: Improved health, of course.</p>
<p>Why should this be expected to have any kind of therapeutic value? It&#8217;s quite simple. Here is the explanation on the Earthing Institute&#8217;s home page:</p>
<blockquote><p>In an age of rampant chronic disease, reconnecting with the Earth’s energy beneath our very feet provides a way back to better health. We are bioelectrical beings living on an electrical planet.</p></blockquote>
<p>I hope that clears it up.<span id="more-9564"></span></p>
<p>There seems to be a fundamental disconnect within the Earthing community. Half of the descriptions of Earthing say that it&#8217;s about transferring the Earth&#8217;s &#8220;energy&#8221; to your body; while the other half say the exact opposite, that it&#8217;s about electrically grounding yourself. Oh well, perhaps the research is still in its nascent stages.</p>
<p>So what&#8217;s the angle? Well, obviously, the sale of goofy products and services. They sell bedsheets costing hundreds of dollars, bands and straps to connect to your body, pads and mats to sit on or lay on, travel kits, and my favorite, a pad to lay on your car seat that you sit on (it &#8220;neutralizes micro-electrical charges on the body&#8221;). And don&#8217;t forget your pets: They also sell pet beds, in case Rover is not feeling quite in touch with the Earth&#8217;s &#8220;energy field&#8221;. If you&#8217;d like to get in on this action yourself, here is a nifty service offered by the Earthing Institute:</p>
<p>The Earthing Institute is pioneering the research and application of safe and effective biological grounding systems. The institute has unique expertise to test the validity of products designed for consumer or specialized usage. Products submitted to us will undergo detailed testing procedures. Upon approval they will be certified by the institute and manufacturers be authorized to use our &#8220;Bio logo&#8221; on their products. Costs vary depending upon the level of expertise required and the time needed to test individual products.</p>
<p>But of course, one shouldn&#8217;t simply assert that a new idea is goofy based on its face-value silliness. One should look at the research. A cursory search of PubMed did, indeed, turn up an impressive sounding study (&#8220;The biologic effects of grounding the human body during sleep as measured by cortisol levels and subjective reporting of sleep, pain, and stress&#8221;) with the following abstract:</p>
<blockquote><p>OBJECTIVES: Diurnal cortisol secretion levels were measured and circadian cortisol profiles were evaluated in a pilot study conducted to test the hypothesis that grounding the human body to earth during sleep will result in quantifiable changes in cortisol. It was also hypothesized that grounding the human body would result in changes in sleep, pain, and stress (anxiety, depression, irritability), as measured by subjective reporting. SUBJECTS AND INTERVENTIONS: Twelve (12) subjects with complaints of sleep dysfunction, pain, and stress were grounded to earth during sleep for 8 weeks in their own beds using a conductive mattress pad. Saliva tests were administered to establish pregrounding baseline cortisol levels. Levels were obtained at 4-hour intervals for a 24-hour period to determine the circadian cortisol profile. Cortisol testing was repeated at week 6. Subjective symptoms of sleep dysfunction, pain, and stress were reported daily throughout the 8-week test period. RESULTS: Measurable improvements in diurnal cortisol profiles were observed, with cortisol levels significantly reduced during night-time sleep. Subjects&#8217; 24-hour circadian cortisol profiles showed a trend toward normalization. Subjectively reported symptoms, including sleep dysfunction, pain, and stress, were reduced or eliminated in nearly all subjects. CONCLUSIONS: Results indicate that grounding the human body to earth (&#8220;earthing&#8221;) during sleep reduces night-time levels of cortisol and resynchronizes cortisol hormone secretion more in alignment with the natural 24-hour circadian rhythm profile. Changes were most apparent in females. Furthermore, subjective reporting indicates that grounding the human body to earth during sleep improves sleep and reduces pain and stress.</p></blockquote>
<p>And moreover, a <a href="http://radianthealthtoday.com/GroundingReport.pdf" target="_blank">paper</a> on an alternative health web site briefly described several such studies. Wow! Pretty impressive, isn&#8217;t it?</p>
<p>Well, not so much. First, the above study was published in none other than the <em>Journal of Alternative and Complementary Medicine,</em> which means that it was either not submitted to, or was rejected by, journals that have any sort of legitimate reputation. I didn&#8217;t purchase the article, but going by the abstract and by the descriptions of other studies in that PDF, all of these studies suffer from the same fatal flaws: <em><strong>No blinding at all, and no control groups at all</strong></em>. This means that the test subjects might as well have been wearing paper hats, and if told it would reduce their stress, it probably would have had the same effect. The small size of the study, 12 people, renders any result statistically useless; and my experience in such matters suggests there&#8217;s a good chance that these 12 people were very possibly employees and friends of the company selling the products.</p>
<p>Is it true that grounding yourself to absorb the Earth&#8217;s peaceful energy will cure all your ills? Maybe, but we wouldn&#8217;t know from these studies. <a href="/2010/03/11/i-was-a-skeptic-too-until-i-tried…/" target="_blank">Maybe we should all buy the products to find out</a>.</p>
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		<title>Home Energy Scams</title>
		<link>http://skepticblog.org/2009/04/06/home-energy-scams/</link>
		<comments>http://skepticblog.org/2009/04/06/home-energy-scams/#comments</comments>
		<pubDate>Mon, 06 Apr 2009 12:43:06 +0000</pubDate>
		<dc:creator>Steven Novella</dc:creator>
				<category><![CDATA[scams]]></category>

		<guid isPermaLink="false">http://skepticblog.org/?p=1866</guid>
		<description><![CDATA[I was recently asked about a device for saving energy costs at home &#8211; a device for power factor optimization. I checked it out, and it indeed does have all the red flags for a juicy scam. Techno Scams One flavor of scam is to overwhelm a potential customer with technical information that sounds superficially [...]]]></description>
			<content:encoded><![CDATA[<p>I was recently asked about a device for saving energy costs at home &#8211; a device for power factor optimization. I checked it out, and it indeed does have all the red flags for a juicy scam.</p>
<p><strong>Techno Scams</strong></p>
<p>One flavor of scam is to overwhelm a potential customer with technical information that sounds superficially impressive but which the customer is sure not to understand. There may be a kernel of truth to the science, but it just takes one technical fatal flaw to doom an otherwise plausible scheme. Examples include special audio cables that cost thousands of dollars, but do not produce any audible difference in sound quality.</p>
<p>A subset of these scams is to take a technology that actually has some advantage in specific industrial applications and then adapt them for residential or personal use, where they have not benefit. An examples of this is filling tires with pure nitrogen &#8211; this has a small but real benefit for trucks and large vehicles, but not for your family car.</p>
<p><span id="more-1866"></span>Sometimes part of the scam is to come into the home with some gizmo and then give an impressive-looking demonstration. Home water filter salesmen are known for this.</p>
<p><strong>Protect Yourself</strong></p>
<p>There are some very useful rules of thumb to follow when someone is trying to sell you such a  device. Do not purchase of device if you do not understand the science behind it. Do not let a slick salesmen dazzle you with technobabble. If you don&#8217;t understand the claims well enough to judge them for yourself, then consult an expert before making a purchase.</p>
<p>Listen to your common sense. If a claim sounds too good to be true, that&#8217;s because it probably is. Adding a magnet to your fuel line is not going to increase the fuel efficiency of your car by 30%. You have to ask yourself &#8211; if such a claim were true, why isn&#8217;t everyone using such a device. Why isn&#8217;t the government mandating that such devices are added to all cars. Imagine if we could reduce the fuel use of our automobile fleet by 30%.</p>
<p>Don&#8217;t believe testimonials. Testimonials are worthless, they can be invented, they can be given by people who have a stake in the company or the sale, or they could just be cherry picked and misleading. Testimonials are used because people emotionally find them compelling, but they are worthless as evidence. If a company has a link to testimonials, but not a link to published peer-reviewed scientific evidence, or to official government or industry information &#8211; then be wary.</p>
<p>But also &#8211; be wary of links to official government or industry information. This may be legitimate, but ask yourself if the links actually support the claim or are just provided to give the impression of legitimacy. One trick, for example, is for medical device marketers to claim that their device is listed with the FDA. This makes consumers think that the claims made for the device are FDA approved, but this is not true. Again &#8211; if you have dificulty sorting this out, consult an expert or a more knowledgable friend.</p>
<p>And of course &#8211; generic advice &#8211; don&#8217;t let yourself get pressured into a quick sale. Take the time to investigate. Anyone who wants you to make a decision right then is scamming you.</p>
<p><strong>Power Factor Optimization</strong></p>
<p>Now back to power factor optimization &#8211; what is it? This falls under the category of something that is useful for industry, but not for residential use. Companies selling this for the home, will typically impress their customers with a long, and generally accurate, description of the physics. But they leave out the little detail that dooms their claims.</p>
<p>In short, these devices reduce reactive force &#8211; technically volt-ampere reactive power, or var. There are two kinds of loads in an electric circuit: resistance and reactive. Resistance is what does useful work &#8211; turning a motor or lighting a lightbulg. Reactive load results from differences in the current and the voltage and essentially is wasted as heat.</p>
<p>Var devices claim that they balance the current and voltage (using capacitors and other methods) and therefore reduces reactive load, decreasing the amount of electricity that is wasted as heat, and thereby increasing efficiency. This, therefore, will reduce your electric bills by reducing waste electricity.</p>
<p>But here&#8217;s the kicker &#8211; electric companies measure and charge for only the resistance load, electricity that does work. They do not care about the reactive load for residential homes because it is generally minimal.</p>
<p>They do measure the reactive load for industrial use, where certain pieces of equipment may have significant reactive load. They charge a &#8220;penalty&#8221; for high reactive loads for industrial use &#8211; but not to residential customers.</p>
<p>Therefore the savings for a residential user should be minimal to nothing.</p>
<p>Some companies, like KVAR energy controller, appear to make devices that actually work, in that they may reduce reactive load. They have to be installed by an electrician at the circuit breaker box &#8211; the point at which electricity enters the house. The problem appears only to be the application to the home and the claims for electric bill savings, with only testimonials to support these claims.</p>
<p>Even the modest 10% savings they are claiming would be huge if employed nationwide. If it really worked I would think it would either be mandated, or supported by a tax refund or other incentive.</p>
<p>There may also be outright fraudulent products out there also. I recently received this e-mail from an SGU listener:</p>
<blockquote><p>Last year I was visiting my mom and she had an appointment with some people to  come over and check her house because they could &#8220;save her money&#8221; on her  electrical bill.  Of couse when they showed up I was immediatly asking for  specifics about what they did.  They had all kinds of fancy words and equipment,  but here is the jist.  The lady pluged a device with a small LCD screen into the  wall sockett and said, &#8220;Ooohhh&#8230;&#8221; then told me that the current in the line was  jumping up and down really bad.  She also threw in some &#8220;wave&#8221; and Diffrental&#8221;  words   She then pluged a capacitor into another plug on the same circuit and  showed me her little LCD readout witch had droped to neer zero.  She told me  that the capacitor would store all that wasted energy &#8220;noise&#8221; and smooth out the  flow in the lines, then release it later.  Thus saving up to 30% on your energy  bill.  I was astounded, mostly that my mother and stepdad would let these people  within 100 yards of their front door.</p></blockquote>
<p>A device plugged into an outlet would not plausibly achieve power factor optimization,  so this is a scam of a scam. But we see here the typical ploy of doing the in-home demonstration combined with some technobabble and some impressive claims &#8211; 30%, wow.</p>
<p><strong>Conclusion</strong></p>
<p>I had to spend some time investigating this one. The basic concept of installing a device at the junction box to reduce wasted electricity sounds superficially reasonable. There are advancements in effiiciency all the time as the technology evolves. Home appliances and electrical circuits today are generally more effiicient than they were 50 years ago. Just like cars today are much more fuel efficient than those of the past (although in the US they are also bigger on average, offsetting some of the advantage in fuel efficiency).</p>
<p>Also &#8211; the back story of reactive vs resistive loads is all correct. But still, the extraordinary claims and the marketing style set off my skeptical alarm bells. The devil is in the details, and in this case power factor optimization seems to be useless for residential use, although legitimate for certain industrial applications.</p>
<p>I also acknowledge that I am not an electrical engineer, and some of the technical websites I consulted exceeded  my basic knowledge in this area. So if there are any electrical engineers out there &#8211; please add any needed detail or corrections to my summary.</p>
<p>But I followed my own advice &#8211; I consulted the experts, and my summary above is what they had to say.</p>
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		<title>The Ponzi Dilemma</title>
		<link>http://skepticblog.org/2008/12/23/ponzi-dilemma/</link>
		<comments>http://skepticblog.org/2008/12/23/ponzi-dilemma/#comments</comments>
		<pubDate>Tue, 23 Dec 2008 10:00:59 +0000</pubDate>
		<dc:creator>Michael Shermer</dc:creator>
				<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[Bernard Madoff]]></category>
		<category><![CDATA[cons]]></category>
		<category><![CDATA[Ponzi scheme]]></category>
		<category><![CDATA[scams]]></category>
		<category><![CDATA[three-card monte]]></category>

		<guid isPermaLink="false">http://skepticblog.org/?p=739</guid>
		<description><![CDATA[How would the average investor know that Bernie Madoff was running a Ponzi scheme? Here’s a supreme irony for you. About six months ago a colleague of mine named Stephen Greenspan, a psychiatry professor at the University of Colorado, sent me a book manuscript to review and blurb for him (a blurb is one of [...]]]></description>
			<content:encoded><![CDATA[<h4>How would the average investor know that  <br /> Bernie Madoff was running a Ponzi scheme?</h4>
<p>Here’s a supreme irony for you. About six months ago a colleague of mine named Stephen Greenspan, a psychiatry professor at the University of Colorado, sent me a book manuscript to review and blurb for him (a blurb is one of those back jacket endorsements from someone who hopefully knows something about the subject of the book). Greenspan’s book is called <em>Annals of Gullibility</em> (Praeger, 2009, due out in January), and it includes chapters on gullibility in literature and folktales (Pinocchio, Gulliver), in religion (end-of-the-world predictions), in war and politics (the Trojan Horse), in criminal justice (child witnesses), in science (cold fusion), and in finance (Ponzi schemes). It’s a great read and an excellent reference source that, as I wrote in my blurb, “belongs on the bookshelves of skeptics and scientists, not to mention politicians and policy analysts, especially before they go to war.” <span id="more-739"></span></p>
<p>Well, last week Stephen emailed me a query letter about writing an article for Skeptic on Ponzi schemes, based on the chapter in his book, and — here’s the irony — it would recount how he lost a huge chunk of his retirement investments (to the tune of hundreds of thousands of dollars) not to the market collapse (like the rest of us) but by investing in none other than Bernard Madoff’s now-infamous Ponzi scheme. Yup, a psychiatrist who wrote the book on gullibility got taken. </p>
<p>What I am skeptical about here, however, is not Madoff and his scam, but the media’s portrayal of his investors as suckers for falling for it. My question is this: how was anyone outside of the Security and Exchange Commission (SEC) to know? What signs and signals were there for the average investor to see? Madoff was head of NASDAQ for three years and his investment company apparently consistently returned annual dividends to his investors in the range of 8% to 14% — healthy but not outrageous (apparently his golf scores were similarly rigged to make him appear good but not great, shooting 80–89 every round). One could make the case that the SEC should have known (indeed, they were warned in 2005 that Madoff was running a Ponzi scheme), or that investment experts who monitor the business should have been suspicious (and some of them were but their voices went unheard). But how would a college professor in Colorado, or Joe the Plumber in Puckerbrush, Pennsylvania, or you and me as Joe Sixpack investors know that Bernie Madoff was a latter-day Charles Ponzi? </p>
<p>Madoff’s deal was especially effective because it was what is called an affinity scam, where you appeal to those in your social group, in this case Jewish investors. It makes you feel like you’re an insider, a member of an exclusive club, and as such you would surely not be scammed by one of your own. If, say, you were working in the entertainment industry and Stephen Spielberg or Jeffery Katzenberg (both clients of Madoff) phoned to tell you about this sound investment opportunity that was by invitation only and that they could get you in for a minimum of $100,000, and that they had been invested for years in this program and had reliably received annual dividend checks ranging from 8% to 14% on their money, what would you do? You’d most likely jump at the opportunity. In fact, in his article in the forthcoming issue of <em>Skeptic</em> (and in <a href="http://www.skeptic.com/eskeptic/08-12-23.html">this week’s <em>eSkeptic</em></a>), Stephen Greenspan recalls that he felt like he would have been a fool not to capitalize on this opportunity. Was he a fool for so doing? Only in hindsight. But what foresight was there?</p>
<p>By way of analogy, in 2000 I co-hosted a television series for the Fox Family Channel called <em>Exploring the Unknown</em>, in which we produced a segment on cons and scams, one of which was the infamous three-card monte. We employed the help of a professional magician named Dan Harlan who set up a cardboard box at a street mall in Santa Monica to show us how easy it is to sucker people into giving him their money (<a href="http://www.youtube.com/watch?v=ooSJ7C_ww-o">watch the segment on YouTube</a>). It’s a relatively simple game. There are three cards on top of the box. One of them is, say, the Queen of Spades (the money card), while the other two are numbered cards. Your task is to follow the Queen as the magician/conman rapidly moves the cards around the boxtop. When he is finished with half a dozen moves, you place your bill ($5, $10, or $20) in front of the card that you think is the Queen. If you are right he matches your bill. If you are wrong he takes your bill. Unless you are a shill working for the magician/conman (who is signaled through an agree-upon sign where the Queen is located so that he can occasionally win), you will always lose. Why? Because the three-card monte involves one sleight-of-hand move whereby when he is rapidly moving the cards about and occasionally showing you the Queen on the bottom of two cards in his hand, he moves his ring (or pinky) finger down a card from holding the top card to holding the Queen, so that when he appears to be tossing the bottom card (Queen) onto the box top, he is actually tossing down the top card and thereby moving the queen to a different spot. You can’t see it. For the show we had to ask Dan to make the move in slow motion for us, and even then we had to slow down the tape in order to see the move. </p>
<p>Would you be fool enough to fall for the three-card monte? Most of us would say no, because we have heard that it’s a con, or we’ve seen shows like the one I produced, or we’ve read about it in a magazine or a book. But if you had never heard of the game and saw one being played, by the information of your senses you would see some people winning (you wouldn’t know that these are shills) and you would not see the sleight-of-hand move. So it would not be unreasonable to believe that you stand a reasonable chance of winning. In other words, what signs would there be that a con was underway? </p>
<p>The analogy holds for Madoff-level investment scams. Short of just being skeptical of all investment technologies (which, obviously, most of us are not and that’s what helps fuel the modern economy), how are any of us to know which investment companies are legit and which are not? The SEC? We’ve seen how well that works, so what’s an investor to do? </p>
<p>My answer is … diversify. What’s your answer?</p>
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