Honestly, the title of this article is terrible because it doesn’t really convey any useful information about the article’s contents and I’m not one to bury the lede; this is about scams. Specifically I wanted to share my thoughts on the general idea we culturally seem to have about people “falling for scams”. Even in our shared language around scams, we seem to blame the victim as though they had some kind of failing that caused them to walk into these traps. “They were offering you a deal too obviously good to be true and you fell for it.” “Why didn’t you question the situation?” You weren’t enough, you could have done more, should have done more. There’s a mentality hidden behind these kinds of statements; while the literal remarks can be taken as “you as an individual were too stupid to see the warnings”, we can doctor that up a bit, reverse that double negative, and end up at “if you’re smart enough, you cannot be scammed”. This isn’t true, mostly because intellect alone doesn’t define how a person responds to a scam. Scams in their many flavors are often a combination of factors used to take advantage of a person and often by leveraging factors far beyond simple ignorance, and no level of intelligence can perfectly guard against all of it.
Let’s start off with a nice, light example. Many people in my life consider me exceptionally smart; my coworkers, my friends, my family, and probably a long string of acquaintances that got to listen to me talk about anything vaguely technical. Their assertions may be correct depending on your perspective, and this isn’t a venue to try assessing that so I’ll assume it is for the point of this exercise, but the key here is that if this idea that being a certain level of intelligent can protect you from scams, a lot of people would probably consider me well above that threshold. While it is true that most of the time I’m quite diligent and guarded against scams, the fact of the matter is I did get scammed once.
See, where I work they decided to recruit a firm to structure random phishing tests for employees. This is where they send out e-mails tailored to look like potential real world phishing attempts, except the links they include in the e-mails point to an internal website that informs you that you were caught by the exercise instead of going anywhere malicious. While a lot of my coworkers complain about it because you’re essentially being randomly tested at any point in your workday without warning, I’ve been extremely pleased with the program. The various phishing e-mails they send vary in complexity from very obviously bait to exceptionally well crafted ruses with little evidence at all that they’re malicious, which properly keeps you on your toes. One of those well crafted e-mails got me, and it was specifically because of the circumstances when I received the e-mail.
Scams in their many flavors are often a combination of factors used to take advantage of a person and often by leveraging factors far beyond simple ignorance, and no level of intelligence can perfectly guard against all of it.
The circumstances in my case are pretty easy to present; I was offsite doing training for a certification for work so I was still working but not in my normal setting. In addition, my position at the time required me to actively check my e-mail, but I didn’t want to have my work laptop out during class so I was using a mobile client I didn’t typically use. The phishing e-mail they sent was perhaps targeted, didn’t have any obvious signs it was a phishing e-mail, and the link reported to point back to a trusted internal resource so I clicked it. The things in play that all contributed to this were that I didn’t have access to my normal tools (because I do check e-mail routing information to see if the reported source agrees with the message’s actual source; this functionality was not available in the mobile client I was using and is being abstracted away more and more and I hate it), the link was crafted to point to an internal resource that would not be known by an external party without a lot of research or knowledge of our internal workings but also our internal e-mail security system obfuscates links, and I came across this e-mail while on break in the class, an instance where I was under the pressure of a short time limit. None of these have anything to do with how smart I am and the circumstances were the perfect blend of things to overcome my usual diligence. No amount of intelligence would allow me to make up for my missing tools or defeat the perceived time pressure and the contents of the message were specific enough to my situation that even once I knew it was a scam, finding obvious telltales beyond the link (that was obfuscated, mind you) was still challenging. This was a test, but people do get targeted by these precision crafted deceptions all the time in the real world and unfortunately incur losses for themselves or their employers. It’s not rare, not even a little bit, and these are people that are generally respected in their industries; they’re not stupid, not by a long shot.
While that example works, it’s probably a bit sterile, especially if you don’t work in a corporate setting. I imagine it landed quite solidly on anyone that relies on e-mail to do their job and make things happen; it’s the beating heart of your workflow and knowing that it’s such an open vector for deception can be unsettling. It’s an unfortunate consequence of wanting to communicate quickly and efficiently. To those that don’t have that experience, where e-mails can wait and failing to reply immediately won’t prevent others from doing their job, it probably seems like a farfetched situation, but I didn’t start writing this suddenly because of that experience that was probably around 6 years ago at this point. It’s because of something that probably lands closer to home if you’ve been in the market for a computer somewhat recently.
The circumstances around this are unfortunate; a friend died recently and he wanted his oldest son to inherit his computer. Uh, problem was that when another friend went to turn on his computer after his funeral and things had settled, it wouldn’t turn on. He brought it up to me to check out after he was unable to get it running with his limited ability to troubleshoot and I was unable to figure out what was going on remotely, I cleaned it out, pulled apart the GPU for maintenance, and found that the thermal paste on the die was a nice, solid chunk. I cleaned it off, applied new paste, put the GPU back in, and it still wouldn’t start, but it started right up when I put in a known good GPU. So okay, computer needs a new GPU before we can pass it on, no big deal.
Since I’m the tech person, I decide to handle everything and just tell him how much he owes me when everything’s in and done. Since the kid’s still young, I confirm with my friend and the kid’s mother that going for an older but competent GPU is okay so that the price tag is relatively low but he has a decent amount of power available (more than the previous GPU even). I start shopping around, find the model I want at the price point that I want, but before I pull the trigger, I shop around some other well known models as a pulse check to see how prices are and see if I can’t find a better deal that isn’t too terribly much more. I plug in another model number and the first few results are at the price point I expect to see based on their actual performance, except the sellers all have 0 reviews. That naturally strikes me as odd but that’s because I shop around for used hardware a lot and am often dealing with vendors that sell old enterprise gear with thousands of products coming and going, so alright I scroll down the list a bit and find listings that look to me like people, individual owners, trying to flip their old GPUs. They tend to have between 0 and 50 reviews, profile pictures kind of all over the place, so probably real people. The problem? The prices on these GPUs was double the entries that were all at the top of the list.
So what’s happening here? Well, because it’s in this article and this article is about scams, you probably already assume that these are scams, but without that context and if you were the one shopping for parts, it may not be as obvious. It most certainly wasn’t to a non-trivial amount of people:
There were 3 sellers when I was looking around and this was the only count I looked at, but I’m sure the other two had similar or higher numbers going on. This seller stood out to me because of the feedback you see there which is why I pulled up this entry specifically; we’ll come back to that. What’s happened here is as I mentioned before; there’s a confluence of circumstances going on which is probably slightly different for each individual buyer which led them into this trap, and while ignorance may play a part, it’s far from the only factor at play here, and what upsets me about our mentality around scams is that’s the single factor that’s typically highlighted in our current social zeitgeist. So if that’s not it, what else is involved? Let’s explore.
First, and honestly probably the most impactful factor here is that I was doing this shopping at the beginning of December. Christmas is a big time of year, many people are shopping for gifts for friends and family. This naturally means more transactions in general; people with stuff like old GPUs are going to want to sell because they’re likely to be able to sell at higher prices due to the increased demand and people buying more than other points of the year getting presents for their loved ones and family. These conditions are the foundation of creating an environment ripe for abuse; you have unfamiliar sellers with unknown or poorly known credentials and people wanting to buy gifts digging around in unfamiliar environments trying to dredge up what they perceive as good deals. On the part of the sellers, there are 2 important tricks here that gave them the appearance of legitimacy; they paid to have their entries promoted as “Sponsored” ranking them higher in common search results and there’s multiple of them at similar price points giving the illusion that it’s a fair price point. So just by searching the model and seeing those results all up at the top, we’re already in the trap.
That’s where that ignorance comes; it’s very possible that some of the people that purchased these didn’t look any further because they’re not familiar with the hardware and just clicked one and pressed “Buy Now”. This is a scenario where you could plausibly say that veritable smart shield would have protected them; if they were more familiar with the products they were dealing with or did some research or knew what signs of scams were around, they could have avoided it…but it’s hardly the only possible scenario. And even if that’s exactly what happened to some of these people, there are still more factors we’ve yet to consider that probably pushed them into making that choice. The factor that I think is the most overlooked is trust.
We generally don’t think about it, but a lot of practically blind trust is required for society to function at all really. We have to trust that when we order something by mail that the seller is honest about the product, that the seller is responsible and will package the product with the appropriate amount of protection, that the delivery people moving the package from point to point are honest and don’t tamper with your product or package, and that your neighbors or random passers by on the street won’t just swipe your product once it’s delivered. That’s a lot of trust in a single transaction, and this happens everywhere, like we have to trust other drivers to adhere to our commonly understood rules of the road to maintain a safe environment while using boxes of metal moving at high speeds for quick transportation (an inherently unsafe activity), we have to trust people preparing our food have taken appropriate precautions so the food does not make us sick, etc. The platform I was on is an old and established marketplace, so when people buy or sell on the platform, they trust the platform’s systems to protect them from harm like an obvious scam, and in fairness I’m sure the platform routinely shuts down obvious scams, but it’s most certainly not infallible, and there are known ways to game the platform’s systems so you get out with the money.
When people are shopping for those holiday deals, seeing what looks like a good deal on a platform they consider trustworthy is another condition that can lower typical defenses. Also, those other factors I pointed out? The results being “Sponsored” and showing up as the first few entries you see on the list? Multiples of them around the same price? It’s all about generating that delicious trust, and it all being on a platform considered inherently trustworthy as to allow easier transactions between people? More sources of trust being added to the equation. Calling people stupid for “falling for scams” is a narrow-minded way to look at these situations. Somebody saw all the puzzle pieces lying around, put them together to carefully craft an environment to take advantage of that inherent trust and the systems in place to defend against that bad behavior failed, leaving individual judgement as the last line of defense. In my biased opinion, the platform is just as equally culpable as the individual for creating that environment in the first place, but to be clear I also generally consider trying to hold either of them as somehow entirely responsible for the dupe as…well not great either, at least without looking into the details first (it’s a discussion far beyond the confines of this particular topic, but clear and repeat disregard for obvious problems on the platform such as with Amazon and the lack of quality control should be seen as willful negligence, and while that could be argued here, it’s not exactly related to my point).
Somebody saw all the puzzle pieces lying around, put them together to carefully craft an environment to take advantage of that inherent trust and the systems in place to defend against that bad behavior failed, leaving individual judgement as the last line of defense.
I feel like something often left out of these conversations is that we have systems in place to defend against scams. In this specific example, they are built into the platform itself. Remember that -1 positive review?
This is somebody that should be praised in my biased opinion. When you realize you’ve likely been subjected to a scam, contributing that knowledge in a way to protect additional people from walking into the same trap really should be the least you can do, but that takes a level of humility that’s uncommon in my experience. Our culture of shaming people that fall victim to these schemes also discourages them from speaking up when they realize their blunder even if they would otherwise have enough humility to admit it, but without them speaking up, others are deprived of additional protection that makes that individual judgement unnecessary. That -1 positive review? Massive red flag and a barrier for others to see that didn’t exist before all because one person took the time to leave a pretty detailed comment once they realized there was cause for concern. This person contributed their time to making sure the systems we have in place to protect people would continue working, and their reward for it was probably not getting their money back; I’m sure there were a number of people that read that comment and had some kind of negative perception of that person assuming they were just not as smart as you, the person reading the comment providing your little bit of mental snark as the morally and intellectually superior one in this exchange.
But as I have and will continue to stress, a lot of conditions were there to lower those usual defenses people have against being scammed, and it was just enough to reach a sizeable audience of people. Those GPUs, by the way, were just over $100 so if you want to mental math that against the number sold, that’s around $10,000; not bad for a low effort seller entry on a trusted marketplace and probably a pittance of money for the site to actively promote it.
Also keep in mind that I said ignorance is but one of the possible reasons why somebody may have purchased from one of those sellers thinking they were legitimate. There are other possible scenarios I can consider just right offhand, like a parent asking their tech savvy kid to buy the part because they’re not familiar with the hardware; the parent is doing their due diligence by deferring to somebody familiar with the hardware space, but the kid may not have the eCommerce experience to identify a scam. A theoretical victim could be a single parent trying to do some online Christmas shopping after getting home from their second job. Every moment they spend shopping is sleep they’re missing out on and they have an early day at their first job again tomorrow, so they perhaps don’t exercise their due diligence when clicking that “Buy Now” button, but this was the only free time they’ll have to get this shopping done in like the next week and if they wait too long to order it, it won’t make it in time for Christmas. Maybe you even catch somebody like myself; I know the performance of this hardware, and those prices the scammers were charging line right up with what I would expect. Except the market doesn’t operate on performance; it’s all about how much people are willing to pay for the product, so while I can point out the disparity between the price and performance all day, it doesn’t change the fact that the brand and model is easily recognizable and understood by the average person and they don’t want to dig into all these charts and graphs to understand if they’re getting a good deal, so they’ll pay a higher price if it seems fair to them, and in this case they’re not that old but considerably cheaper than new models. Somebody with my knowledge and in my position may have clicked one of those “Buy Now” buttons because the values lined up with their expectations.
Lack of specific knowledge, time pressure, expectations. Other possible reasons one might bypass their typical checks, none of which has anything to do with how “smart” or “stupid” the individual might be. Just because you know little about this specific product in this niche field doesn’t make you a fool, especially if your knowledge is concentrated on other things, especially around the areas you work in or dabble in as a hobby. People set up these traps hoping those conditions manifest and push you into them, and our cultural problem is we’ll blame the victim for landing in the trap instead of trying to remediate the conditions that allowed the trap to be set in the first place.
I feel like an important consideration that’s removed from these conversations along with addressing the scammer is the fact that they’re a person too, and that “veritable smart shield” also contains all the signs you would need to paper over an operation to make a scam seem legitimate. The complexity of a scam depends on the amount of effort and knowledge the scammer puts into it, and understanding which signs people will look at to generate that trust gives you levers to pull to create the appearance of a legitimate operation as a scammer. What this means is that knowledge component works both ways; an informed person will have a list of signs to check when approaching a situation, but an informed scammer will have already prepared solutions to those problems ahead of time. In this case, that knowledge of what a scam looks like is now a double edged sword because all those signs you’re looking for have been tailored to what you would expect to see with a legitimate operation, generating more trust. While this GPU shopping example I stumbled into was a relatively unsophisticated example, these scams can get pretty comprehensive.
I feel like something often left out of these conversations is that we have systems in place to defend against scams.
Recall this comment I made from earlier, we have systems in place to defend against scams, but what happens when a scammer uses those systems to bolster the appearance they’re legitimate? This is another lever that can be manipulated to build that ever so valuable trust if you understand how to pull it. Once again, I have personal experience with this scenario even if I wasn’t the victim; it’s a situation I could have prevented if I had spoken up when my intuition screamed at me that something was wrong, but I didn’t and would find out that my intuition would have been the only thing that painted the operation as a scam.
Once again, we’re dealing with GPUs; my friend’s GPU died at around the start of the pandemic and he was in the market for a new one. How I prefer to operate is to buy hardware myself and get reimbursed for it later for a few reasons, but at that point in time, I didn’t have the cash to do that, especially considering the meteoric rise of GPU prices, so I told my friend to shop around and ask me questions. I gave him…actually the same known good GPU I used again in the computer at the start to use temporarily until he could buy one for himself and sent him on his way. While fishing around online, he found what he felt was a good deal and asked me all the pertinent questions a good, diligent buyer would ask somebody familiar with the market and hardware. He checked forums for reviews, dug into the history of the company he could find, everything seemed legitimate, so he pulled the trigger and made the purchase. And waited. And waited…
While he was asking questions to feel more comfortable with the purchase, I did get the sense that it was wrong, and if you ask me why now of course I can explain; the times were turbulent and this company that was unheard of before was suddenly in the spotlight with a perhaps too polished image. Everyone makes mistakes, every record has a blemish or few, and this was too clean; every answer my friend came up with to his questions seemed doctored to align with your expectations. It’s very challenging to let that hesitation win in a situation where all the other signs say “this is fine”. So how did this work? What pieces were put into place to work up that ever so important trust factor?
Once again, we have a situation where the company bought their position in search results. If you searched for specific GPU models, this company showed up with a bunch of the advertised results before the normal results from the search, and presumably because of that ranking, their pages received enough traffic to also be the first ones in the normal search results too at some point. You pull up the site and alongside those GPUs they have Personal Protective Equipment (PPE). This was in COVID times so selling these specific in-demand products at that time was reasonably a massive red flag; my friend understood this, mentioned it as a concern, but when he went looking for evidence they had done business, everything seemed legitimate. What I would review myself later was that there were forum threads and other places that mentioned the company favorably, and these reviews and testimonials were from accounts that had a history of posts that seemed authentic. They could have been scam accounts that were established for the long haul and accurate enough to give that air of legitimacy, they could have been legitimate accounts that were compromised, they could have even been specific targets that were duped, some of a select few actually given products because, in their research, the scammers could reasonably expect a glowing review and recommendation from these otherwise legitimate actors. What made this situation even more difficult to divine through was the fact that their PPE sales were business-to-business, so the typical venues a normal consumer would use to confirm purchases were not available, and there wasn’t much information on those PPE sales outside of the few forums you could find referencing them with posts that were present long before the situation really developed.
Somehow, those systems we have to fight back against scams, customers talking to other customers was compromised, fairly thoroughly too. Everything you would normally check to ensure something was authentic was tailored to appear authentic by some of any number of means, and probably multiple means too considering how easy it was to find information asserting they were legitimate. Even if you went and looked at other information that’s relatively easy to access about the business like their domain registration, everything looked right on the surface. Although even that kind of relatively mild research is far beyond what the average consumer will do already. So alright, we have weird product stack in weird conditions but they covered that in a way that made it make sense. What about other signs? Well the prices of the products were lower than other sources at the time, but not by insane amounts that made no sense, maybe $10 or $20 less than you would expect on a product that was hundreds of dollars. The site itself had all the required markings and information that you would expect from a proper eCommerce site, you could find “reviews” of people receiving the product with pictures across a number of different platforms, all different accounts with different images. Again, these could have been doctored reviews and images, but given the reviewers often had histories built up, I’d find it more likely they were either compromised accounts or users that were legitimately sent products. Every step was taken to paper over what you would normally consider a warning and this whole operation was clearly extremely well thought out. And my friend bought the facade.
After he had made the purchase, I did a search for something and those advertisements came up. And me seeing them is not good for a few reasons, I forget the search and circumstances but the ads screamed “scam” to me, so I started digging around, finding all the signs that had been used to deceive my friend, the questions he had asked came hauntingly back into my mind as I dug more and more following his path, seeing everything that seemed too clean, too doctored, to be real. In the end, the only evidence I could find that it was a scam wasn’t even something I personally noticed; somebody pointed out that the name used on the website registration had been used on other sites that were known scams at earlier times for very different situations. Looking over them, it was obvious that this person (or more likely an organization) had been at this whole scamming gig for a while and their scams were getting more and more comprehensive as their operations matured and evolved. This whole situation with COVID and GPUs hit at just the right time when they had the perfect experience and existing portfolio to make a convincing facade in a hurry that probably stood for months under scrutiny until people with even more specialized knowledge came along to burst the bubble.
That veritable smart shield? Well now for you to not get scammed, not only do you need to be familiar with the platforms you’re using to understand available tools, the products you’re looking for to understand reasonable prices, conditions, and claims, but also you need to be familiar with all the avenues that are used to identify scams and also ways those avenues can be gamed to gain your trust; you essentially need to know about facades that enable bigger and more consequential scams, and our single parent up there really just wanted to get their kid a nice Christmas present before bed. Any reasonable person doesn’t want to do hours of research to buy a single product, that’s why the tools available via these platforms are so important; they enable us to trust that we are protected from these bad actors so we can do things like buy a Christmas present quickly and easily when we’re in a hurry. When those tools fail, laying the blame at the victims’ feet doesn’t help anybody and allows the environment that created that opportunity to survive, primed to generate more victims. This behavior makes that veritable smart shield more necessary, more required when it should be treated as a last defense when all else has failed, and I hope I’ve illustrated how fallible thinking that some arbitrary level of “smart” can protect you is as a defense.
But okay, let’s say that doesn’t have you quite convinced, after all, these people are spending money, and you should put in the time and effort to make sure your money isn’t wasted. While I’ve worked through a number of situations, looking at progressively more sophisticated methods of deceiving people, they’re fundamentally of the same flavor that somebody wants to trick you into handing over your money in confidence unaware that nothing’s actually behind that front counter. The thing is that life is a complication series of interactions; a lot of things we negotiate are societal structures we’ve created and established to give structure and meaning to those interactions. This is to note that while these examples seem relatively simple, they rely on those norms and expectations to accomplish their goals, however those types of scams are far from the only type of scam that can exist. They’re probably the most common because money is an easy vice to understand; obtaining money means power in some sense, as you can use that funding for virtually any common endeavor you seek and even a good number of uncommon ones. Sometimes, in the real world, scams aren’t about money, and may not even start off as scams; they could start out with legitimate intentions but devolve as white lies turn into outright deception due to peoples’ fear of failure or some other motivation to keep up the appearance that things are going fine. What happened with Theranos comes to mind as a possible example, but I don’t really know much about that beyond the surface and don’t really care to delve into it. No, unfortunately there’s an example much closer to home that came about recently and it makes a lot more sense to explore that considering I muck about in the VTuber space; let’s talk about VIRTUX.
Veritable Smart Shield vs. Employment Opportunity
Let me make a few things abundantly clear before we start. First thing being this is not a comprehensive report over what happened within VIRTUX or an investigative piece; I happened to be thinking about scams generally because of that shopping experience when this situation fell into my lap as another possible example, so I’ve gathered enough information to understand what happened without getting too detailed. That plays into the second thing that I want to make clear; this situation with VIRTUX really did happen, and people spent money they otherwise wouldn’t have or offered up a bunch of work the time of which they spent can never be compensated among accumulating losses of other flavors. I’ve remained ignorant on details because while I think the situation illustrates my point quite well, I don’t want people to be named and shamed and avoiding those details means even if everything I say is bang on the truth, I don’t know that and couldn’t possibly affirm it and obviously can’t put any names behind anything. Naturally with all of this comes the disclaimer that what I’m about to say are my limited understanding of what happened with VIRTUX, filling in gaps with plenty of assumptions; the general strokes may reflect reality while details don’t, but the details aren’t necessary to understand the point that I’m trying to make so don’t try taking bits and pieces of information away from here as fact; if you really want to know more about the downfall of VIRTUX, the talents have released statements and generally seem to be open to talking about their experiences. If you must, go ask them about their experiences, but if I may make a personal request should you take that course of action, leave them something for their time be it a donation, a gift from their Throne, some likes and positive engagement on their social media, something; they’ve all been hurt by the experience and deserve some respect for the sitation and support to push them back towards where they otherwise should have been in their content creation voyage.
Starting off, there’s a few things to understand about the VTuber space that makes it somewhat uniquely susceptible to this type of situation (though really a lot of work positions that are handled primarily remotely share this weakness). First off is that typically talents at agencies aren’t hired like a standard employee; I have my own cynical views on why this might be the common practice, but the fact of the matter is that for most agency applications, people should navigate it as contract work with an agreement for specific performance from a person for the company (and specific ways the company will support the talent in this case since it’s often beyond typical compensation). These agreements are different from your typical employment contract in a lot of ways making it an atypical space for people to navigate, especially if they haven’t done other contract based work before like any independent contractor gigs, or if they worked through an agency on those jobs (because the agency would service the contract on behalf of the employee more or less and the actual person doing the work would likely never see the actual contract). Another point that makes these interactions more complicated is often times the agencies will hire talents from different countries. This has always struck me as a weird, complicated money-losing endeavor if you do it correctly because it would require you be aware of any international law governing your country’s relationship with the country of origin of the talent, and often times those agreements stipulate that your employment contracts should adhere to the local laws governing employment in whatever jurisdiction that talent (in this case) resides. The important thing here and part of why I bring this up is because I doubt most talents would have that knowledge offhand and people that are aware likely have some external reason for that knowledge rather than coming across it organically while doing content creation work. And then in addition to being aware that’s how it works, you need to know where to access that information and how to understand it if it’s in some kind of dense legalese. There’s another point related to this; if you are trying to sign on with a foreign agency, if you haven’t had extensive contact with that country for any reason, it would be difficult to verify things like the company is an actual registered company. While I’m vaguely aware of how to check company registrations in my own home country, VIRTUX reported out of Canada and I know very little about their legal systems beyond what it generally shares with ours, so asking me to verify that the company is a legitimately registered company is a tall order and I’d likely have to ask somebody more knowledgeable. Another unique trait that contributed to this situation is that, as far as I understand, signing contracts with agencies doesn’t typically come with any initial compensation. While you may be given a budget to spend on activities performed on behalf of the agency, it would surprise me greatly if the agency handed out the cash and let talents spend it as their own money, mostly because that complicates accounting significantly if you’re doing it right.
To summarize the above points, we have a situation where talents are signing contracts that would be unfamiliar to the average person, working with entities we may need specialized knowledge to interact with, and often times those contracts don’t include upfront payment. What this means for our conversation around scams is that for a contract to feel legitimate to a prospective talent, they only need to appear like a legitimate contract with details they’ve probably vaguely heard about (since contracts aren’t discussed generally, sometimes for Non-Disclosure reasons, sometimes because legal chatter is just plain boring and arduous unless you’re seeking specific information) as the other telltale signs of an employment scam won’t manifest immediately, such as not getting paid.
So, enter CEO, which is how I’ll refer to the guy at the center of VIRTUX. From what I understand, he had somebody else working with him that he referred to as a COO. If you are unaware, CEO stands for “Chief Executive Officer”; sometimes this position is required in a corporate forum to have in order to meet certain regulations or qualifications to classify the company a certain way or operate in a certain manner or area. Generally what it means within an organization is that they provide the company with strategic direction and guidance, though given VIRTUX was so small, I don’t believe either of these were the case and he referred to himself as the CEO rather than an owner/operator or some other title simply for the kind of prestiege it probably feels like the title confers. As for COO, it stands for “Chief Operating Officer” and is generally the person that handles strategic direction for the daily operations of the company. This can involve a number of disciplines and such, however I’m personally much less familiar with the role that a COO plays within an enterprise since I typically operate under the CTO, “Chief Technology Officer”, so I don’t have much more specific insight to give other than again, the position is for strategic directions so I don’t know that him having this title should imply any specific qualifications. As far as I can tell, Mr. CEO is really the main player here and everybody else ended up along for the ride.
CEO does whatever work he did to create the front of a company; he may have legitimately started an LLC or something of the sort, you can do the same here for like $50 quick and easy so you can appear on the registry properly if people look you up, he may have only created branding and other similar iconography, I don’t actually know. The only thing that matters is that he started soliciting applications from talents to join his agency and he got a few people. They start work behind the scenes laying out plans and details, commissioning work from people outside the agency, and at first things seem perfectly fine. People are getting paid for their work (or at least the talents are being led to believe people are getting paid for their work), but some work isn’t getting delivered. Further and further along in the long process of setting up for a debut, more and more work isn’t being delivered or weird reasons are being given as to why it can’t be commissioned and promises aren’t being kept, eventually the talents organize and give Mr. CEO an ultimatum, he doesn’t respond, they very publicly start sharing their experiences with this “agency”. Obviously this is a very abbreviated overview of what happened, but the key points are there; VIRTUX as an endeavor ended up as something you could essentially classify as a scam, but what all really happened here? Were this dozen of people and change really just “stupid” (lacking that veritable smart shield) or was there something else at play?
This is actually where I get to highlight my favorite point about these things, saying the people involved were “stupid” or whatever is a simple answer. You don’t have to think about the details, you don’t need to consider factors around the situation, you apply this label and it feels nice to have that assessment filed away. I think we, as humans, take great solace in thinking we’ve understood situations, partially because we’re uncomfortable acknowledging we don’t know or understand things and partially because we feel intelligent if we can pose an answer. Problem is that labeling anything a personal failure and failing to look at conditions around the situation one could classify as a personal failing itself; it’s simple, ignores context, removes agency of those involved or limits of that agency, the list goes on. Maybe the answer is that the people involved should have been more guarded or a reasonable person would have identified the situation as a scam, but we can only understand that if we visit all the details of the situation.
So what all was at play? Well I already went over some of the unique aspects of dealing with contracts in the space of a VTuber working with an agency and how I feel it’s a lot to expect the average person to have the kind of knowledge and insight required to properly navigate them. To further compound this issue, many people treat content creation as a hobby, be it an artistic outlet or they’re working towards mastering they’re craft and making enough doing it they can focus on it full time, they often have other work that brings in money so any time they spend on content creation takes away from that personal time they have to themselves. It’s already on a limited budget depending on how much they work, and all the steps that go into creating content are often work in and of themselves, so they don’t exactly have a lot of time to go evaluate those contracts and understand what’s reasonable, what’s normal, the works. I mean, part of the appeal of working with an agency is that you can outsource all of those considerations; the agency retains employees that specialize in these different fields streamlining your work and allowing you to focus on the content creation piece of the pie while you compensate them for handling the other pieces. With all that in mind, if somebody says “hey, I have an agency, feel free to apply”, you go through the application process, it looks and feels like an application process, you’re given a contract, it looks and feels like what you expect a contract to look like, it’s not too difficult to buy enough trust that the operation is legitimate, especially if you’re aware enough of the industry to say the right things when prompted. So back to my earlier examples, if you’re aware of what people look for to identify a scam and give the right answers, that can bolster the victim’s confidence that everything is legitimate.
And to visit Mr. CEO for a moment, given what I’ve heard I don’t know what his motivations were; it really sounds to me like he had visions of grandeur but no business plan to get to that goal, and didn’t have the humility to tell the people that came to rely on him and his words that he screwed up and didn’t have a plan. He very plausibly didn’t intend to functionally scam all the involved people out of their time and effort, especially when you consider he didn’t seem to ask for weird transactions like your typical scammers do and then offer no return; the talents got some things, just nowhere near what they had been promised. It’s too disorganized to be intentionally malicious, however that shouldn’t be considered justification for this mess; if you’re going to assign yourself the title of CEO, you’re going to have people that depend on you and your representations to get work done. That’s why c-suite corporate officers have such high compensation; Mr. CEO obviously couldn’t meet those expectations here no matter what motivations may have existed.
So back to that application and contract, maybe people initially turned him down because they smelled fish, but as he interviews people and learns their questions, he’s able to figure out what answers he needs to give to placate prospective talents. Beyond that, all he needed was a few people to sign on. As noted in the situations before this, all he really needed was a few people to have circumstances and gaps in knowledge just right to join his “agency”, then you have a very sinister effect come into play; those people who were duped by whatever means bolster the appearance of legitimacy of the agency. Now Mr. CEO has names and numbers he can point to that demonstrates they’re an actual company working with actual talents and in the process of working with those talents, he gets a better understanding of what’s required for specific projects within the industry. That facade becomes sharper as people that simply had dreams of improving their content creation abilities now unwillingly become actors in this fake-it-’til-you-make-it agency. While people may have skepticisms through the interview process, the moment they’re in contact with the other talents within the “agency” who know the industry and are doing the work, the more trust you’ve captured for basically free.
Going back to that veritable smart shield, in this situation it’s functionally your only line of defense as we don’t exactly have systems in place for identifying these kinds of operations and protecting talents that are looking for support from agencies. As far as I’m aware, the only protection is really via word of mouth, so part of that varitable smart shield becomes that tribal knowledge gained from watching others in the industry talk about it over time or finding forums where people have discussed similar scenarios, except if you’re doing content creation as a hobby and have actual work going on, you may not want to put additional time into that hobby following other larger creators that may or may not offer anything useful to your own content creation endeavors and unless you’re already in a forum participating, finding a specific niche like that can be challenging and take time, time you could put into content creation instead. So putting this into video game terms, everybody’s veritable smart shield has a level based on however you want to define “intelligence” here, and when you interview, you’re essentially doing a skill check against Mr. CEO’s facade. Problem is as he interviews more people and learns what is needed to appear legitimate, that Difficulty Class is slowly going up over time, and the skill check represents some days when you aren’t feeling your best or circumstances have you distracted and you fail to identify signs that you otherwise would have. Some people will have a high level shield, but may roll low, while others may have a low level shield, but ask the perfect thing to nail that skill check and get the sense they don’t want to join this ride. And, of course, that DC shoots up once he has a few recruits.
All this in addition to the lack of any obvious gain for Mr. CEO in the situation would encourage the talents to continue with the ride; even if they might have a little voice in the back of their head whispering to them that they need to get out, they now have others depending on them and they’re working together to recognize their hopes and dreams. Keep in mind that these talents were working towards what they felt is the next step in their content creation endeavors; there’s an emotional investment there that likely contributed to keeping a lot of them going even when the facade was cracking and the signs that Mr. CEO didn’t have the chops or funding to properly run an agency were showing through. No amount of logic or reasoning can overcome that emotional investment alone, especially if just enough of the facade is still intact to make one doubt their internal assessments. At that point, you also need to have the emotional fortitude to accept that this endeavor was a failure, except even this point is kind of asinine and an inaccurate characterization of the situation. The problem is you investigated this avenue for growth and it turned out to be a dead-end because what has happened here is somebody took advantage of your goals and aspirations to pad whatever objective they had, but internalizing that as anything other than failure is challenging. All that time, all that effort, all that money is still lost and some of it with no direct way to recouperate it. That feels like failure, even if we can objectively say that’s not what happened. That vertiable smart shield can’t deal with this situation once you’re in because your intelligence is no longer the only factor, especially if you have the pressure of other people depending on you.
Hopefully that exploration helps contextualize my point. We can’t, and shouldn’t, rely on intelligence alone as a defense to scams or assert that other people should just be smarter in relation to circumstances like this. That mentality has no place in a healthy environment that supports and protects creators, consumers, whatever the demographic happens to be and only serves to isolate people as failures within systems that are even sometimes fundamentally broken and engineered for abuse. While looking around at the VIRTUX situation, I came across some statements and situations from Bao and her history with scams and I feel her position is correct; she made the decision to talk about how she was being scammed on her social media, effectively creating a resource to alert and inform others even if she took a hit to her own reputation as a result. I think that should be commended, she took the action required to ensure that people within her reach don’t need to rely only on that veritable smart shield, and I think her corner of the internet is a little richer for it. We should reward this behavior, but culturally we mock it. Hopefully though, if you’ve made it this far, you’ll put some thought into what really happened next time you see something about somebody getting scammed, and at the very least reserve judgement and be comfortable not knowing exactly what led them into the trap.