The Mortgage Professor: Internet-based medical scams

Jack Guttentag, The Mortgage Professor on

Published in Business News

Exotic Origins of the Remedy: The most imaginative part of the internet-based medical scam is the origin of the remedy being sold. It might be something used for centuries in religious ceremonies of an isolated tribe only recently discovered in the Amazon. It may have been concocted by a maverick physician, who tested it on his own patients. Information about it might have appeared in an obscure technical journal published in Finland or Bulgaria. Or it may be a common household item that only recently has been found to have special therapeutic powers by a prestigious research organization. The exotic origin explains why the customer hasn't heard about the "cure" before, and also enhances its appeal as something special.

The Remedy Is Only Available Here: Whatever the origin of the cure, the consumer must be persuaded that right now it is available only from the scamster. This is tricky because the components of the cure cannot be drugs, which would subject them to Government surveillance. This means that the ingredients must be freely available to anyone, which raises the awkward question of why a buyer can't buy it elsewhere at a lower price?

The scamster's answer is that although the ingredients may be available in the local supermarket, a version with special qualities is needed for the cure. If the required ingredient turns out to be cinnamon, for example, which was the case for a recent pitch I heard, the cinnamon had to come from Sri Lanka. If the cure is a combination of well-known and readily available ingredients, then either the quality of the ingredients must be extraordinarily high, which only the scamster's version can meet, or the ingredients must be combined in exactly the right proportions, or both.

Concluding Comment: My look at medical scams was partly motivated by a search for better ways to market mortgages. In this market, however, the potential for use of villains, heroes, or committed spokespersons is quite limited.

About The Writer


Jack Guttentag is professor emeritus of finance at the Wharton School of the University of Pennsylvania. Comments and questions can be left at

(c)2017 Jack Guttentag

Distributed by Tribune Content Agency, LLC.



blog comments powered by Disqus