The Dust Bunny Emporium

Yaacov Apelbaum - Olga The Dust Bunny Fairy

Is your artistic potential inhabited by a lack of talent, financial resources, or ideas? Don’t despair! Read-on and find out how you too can fully realize your creative dreams—and even make some money in the process—without the need to attend the Royal College of Art.

Several years ago, I noticed that everyone seemed to be selling something on Etsy. To the uninitiated, Etsy is a sort of a hybrid between Facebook and eBay. You can find almost anything there, from handmade jewelry to vintage items to second-hand 1960s underwear.

Yaacov Apelbaum - Etsy Old Shoes              Yaacov Apelbaum - Etsy 1960 Underwear

Etsy promotes itself as an eco-friendly marketplace, a commune of collaborative artisans who use poetic language to describe their goods. For example a seller offering a bunch of torn out pages from an old book describes his product as:

A beautiful selection of over 150 gorgeous leafs from inspirational vintage manuscripts… to be used for absolutely anything! These antique sheets are in a lovely aged condition and I include a generous range of different colors of patina and intriguing imperfections. From mysterious dark latte to beautiful French cream to a enchanting country antique white! Oh they’re just gorgeous!

This got me thinking, how much of this phenomenon was attributed to memetic propagation and  groupie Theory? Or was this just a question of using hip langue to dump your used inventory?

I decided to open an Etsy store to find out for myself. The first problem was what to sell. I like all of my old stuff, but I thought maybe I’d find some vintage items I could part with for the sake of the experiment. In the process of looking around the house, I noticed some dust bunnies behind one of the doors and it suddenly hit me…this was it! I would create a store dedicated to the fine art of house dust, lint, and miscellaneous cat hair.

I launched my “Dust Bunny Emporium” store under the nom de plume of “Olga Schematova”, a middle aged retiree from one of the former soviet union Republics. To comply with the terms of service and agreements, I composed all the required store policies such as About, Return & Exchange, and FAQs. To achieve the right balance of art, prose, and mystique, I dialed-up my Russian accent by a few notches.

Yaacov Apelbaum - Olga's Dust Bunny Fairy Store
Store Keywords: famous Russian general portraits, hair, lint, dust, crumbs, ear wax, petroleum jelly, anti freeze, dust, Vaseline, grease, belly button fluff.

About Olga’s Store:
Welcome Friend! No job too big for Olga!
My name is Olga Schematova. After many years working in the Bolshoi Circus as as deputy manager of sanitation department, I now have own Etsy shop!

Olga’s philosophy is simple; I produce best possible reproductions of famous historical Russian generals using highest quality dust bunnies available.  Each piece is hand made and lovingly crafted with great attention to details.

Few artists in entire world have touched lives of fine art collectors like Olga’s creations do. My mission is to become leading creator of works of fine dust bunny art, magnificent objets d’Art, and treasured collectibles not only will bring you joy, but enhance your life as you share their beauty with family and friends for many generations to come.

Return and Exchange Policy
Olga prides herself on the quality and artistic composition of her dust bunnies. If you are not satisfied with your purchase for any reason, I will gladly exchange your dust bunny for another one of similar value.  Just mail back the dust bunny in its original zip lock bag. 

Unfortunately, I can’t afford to pay for your shipping, so you will have to do it yourself.  All returns are also subject to a 15% processing fee.

Q: What exactly is a dust bunny?
A: Dust bunnies (or dustbunnies) are small clumps of dust that form magically under furniture, in corners of rooms, and behind doors. They are made of hair, lint, crumbs, dust, and debris. Dust bunnies are held together by static electricity and felt-like entanglement. They can actually be harmful if swallowed by your pet and are excellent breading grounds for house dust mites and other parasites.

Q: What is the difference between dust bunnies and the contents of any vacuum cleaner bag?
A: Some enterprising and unscrupulous dealers sell cheap, imitation dust bunnies using the contents of vacuum cleaner bags (there is a thriving black market in the U.S.A). You can tell the high quality dust bunny by its fluffy texture, good clumpinees, and low DtH (Dust to Hair ratio). Some other indications are lack of foreign objects like dental floss, buttons, nail clippings, cat whiskers, and small change.

Q: Is your art for real, or is this just a bad joke?
A: Yes it is, I consider myself to be an artistic trail blazer and an innovator (perhaps years ahead of my time). Before criticizing my creations, consider that Jackson Pollock and Andrew Warhol were also initially treated with disdain and mockery before becoming very famous (and rich).

Q: What do you use dust bunnies for?
A: I have always been interested in sanitation and rubbish disposal. Since I was little, I enjoyed taking the garbage out. I am fascinated by objects like used toothpicks and incrustations of various sorts.  I am an expert on organic discoloration ( I authored the
“The Russian Guide to Food Stains” ) and believe that recycling dust bunnies is beneficial for our planet. As my friend Alexi Steponitovich the poet once said, “Переработка кролика превращает растение в зеленый мед” – Recycling a bunny makes the plant a green honey.

The Collection
Once the store was up and running, it was time to create the inventory. I collected some dust bunnies and lint, mixed it with petroleum jelly and used it to enhance the appearance of my collection of 18th-19th century Russian generals. In addition to a new coiffure and upgraded mustache, each General also received an enhanced personal biography and a brief description of the artwork.

Yaacov Apelbaum - Dust Bunny Fairy Etsy Listings
The dust bunny art catalog and pricing

The Collection
The following is a sampling of some of the masterpieces from the gallery:

Viscount Vladimir Eczemanov Petrovitch
Viscount Boris Eczemanov Petrovitch

Wonderful reproduction of Viscount Vladimir Eczemanov Petrovitch,Tsar Nicholas II’s beloved Chief of Staff. This artistic masterpiece captures the cunning courtier and his love of life, beets, and large parties. Viscount Eczemanov’s accidental invention of borscht and his introduction in 1905 of adult jokes into the Russian court has won him a special place in Russian folklore.

The hairpiece is made of a large and rare imported (from Uzbekistan) hair ball and is reinforced with petroleum jelly. The mustache is made from a clump of drain hair I recovered from the bathroom sink on the train on my way to the farm animal exhibit in Vladivostok.

This magnificent portrait edition is numbered and comes printed on acid free card stock.

Admiral Evgeny Stphanivich Raskolnikov
Admiral Evgeny Stphanivich Raskolnikov

This magnificent likeness captures the essence of imperial majesty of Russia’s Far East Fleet commander in 1905. Admiral Evgeny Stphanivich Raskolnikov, who in real life never set foot on a vessel prior to the famous and short marine battle fought against the Japanese fleet, is presented here with a replica of his original toupee.

The hairpiece is made of a mixture of lint clumps that came from my friend Sasha’s bellybutton and a large and fluffy hair ball that I found on the floor mat in the entrance to the youth center where I also work as a part time cook.

This magnificent portrait edition is numbered and comes printed on acid free card stock.

Duke Gregory Alexander Samovarov
Duke Gregory Alexander Smearvarov

This portrait perfectly captures the image of one of imperial Russia’s greatest cavalry heroes, Duke Gregory Alexander Smearvarov, the hero of Kazakhstan, Turkistan, and Uzbekistan. The hairpiece of this fascinating portrait is made of a large dust bunny I found in the communal laundry room of my apartment building.

The mustache is made of a hairball I got from my black cat Lenin.

This magnificent portrait edition is numbered and comes printed on acid free card stock.

General Boris Michail Schmatanovich
General Boris Michail Schmatanovich

This portrait perfectly captures the genius of one of the most capable and well connected military strategists, General Boris Michail Schmatanovich. The winner of the prestigious white neck medal and 2 chest medals was known for his passionate love of life as much as for his well known book “Introduction to Cassock Dancing.”

The hairpiece of this intriguing portrait is made from an aged and hard to recover dust bunny under the radiator that I got by using a straightened coat hanger. The mustache is made of drain hair I found in the town’s Stalin Youth Center swimming pool shower room.

This limited edition, numbered portrait is printed on acid free card stock.

Count Vladimir Ivanovich Smarkovsky
Count Vladimir Ivanovich Smarkovski

This enhanced portrait is an excellent and clever rendition of the famous military philosopher, Count Vlamimir Ivanovich Smarkovsky, who was the first one to introduce the finger pointing style of command to the Russian imperial army.  He is also the only general ever awarded the three vertically overlapping medal set.

In the creation of his new and magnificent coiffeur, I used a combination of several dust bunnies and some drain hair.

This limited edition, numbered portrait is printed on acid free card stock.

Brigadier General Sergai Vasili Booboyvitch
Brigadier General Sergai Vasili Booboyvitch

A rare portrait of Imperial Russia’s greatest military sanitation engineer, Brigadier General Sergai Vasili Boboyovitch. His numerous contributions to the modernization of sanitation in the Kremlin include: the abolishment of the usage of office curtains for personal hygiene and the introduction urinals and zippers in military uniforms (portrait predates his invention). For these and other important contributions Brigadier General Boboyvitch was awarded posthumously (after his death) the 8 corner and four cornered medals, two very important medals!

The hair piece is made of a mixture of dust bunny, dust, crumbs, and premium filler materials. The mustache is made of a mixture of drain hair and antifreeze I received as a gift from my good friend, Mischa, who works in the cooperative glue factory.

This magnificent portrait edition is numbered and comes printed on acid free card stock.

And for the do-it-yourselfers and creatively inclined, I even added a listing for some bulk raw materials:


Premium Closet Dust Bunny Supplies
This 12” x 6” Zi-p-loc bag of high quality dust bunnies is the perfect gift for any craft lover. It is made from perfectly balanced mixture of hair, dust, crumbs, and lint. This extra large and luxurious dust bunny has been perfectly aged for over 6 months and has smooth, and slickly texture.

If you are looking for bulk dust bunny supplies, look no further!

The quality dust bunnies is second to none and it has beautiful form and luxurious texture. Great for your home made hair, beard, and mustache extensions, or general weaving projects.

Within one week of opening my store, I showed up in dozens of treasuries. An Etsy treasury is a collection of 16 listings. These listings may be your favorite things or maybe items that relate to a particular theme, say, dust bunnies or birds or the color red. You can then share this list with the larger Etsy community on the treasuries page. That was a good sign of traction…

Then came the recognition, in no time, I became the rave of the Etsy artistic community. 

Yaacov Apelbaum - Etsy Feedback
Sales and feedback

After comments such as “Olga’s dust bunnies are a fresh marriage of art and utility”, I knew I was on my way to commercial success. Or as one comment stated:

I find Olga’s work menacing/playful because of the way the mechanical bunny hair and the gesture verges on codifying the distinctive formal juxtapositions of the figures.

So, there you have it. In the end, I didn’t rake in the millions, but still, it was an interesting exercise that proved that even sarcasm in its extreme form can be interpreted as artistic genius depending on who you ask.

© Copyright 2019 Yaacov Apelbaum, All Rights Reserved.

Mortgage Refinancing Shysters II

Yaacov Apelbaum-The Shysters II

In Mortgage Refinancing Shysters, Part I I wrote about some suspicious refinancing solicitation letters I got from the Intercontinental Capital Group (ICG). After writing about it, I got several interesting comments. One cryptic comment came from what appeared to be a former employee who wrote: “I agree with your assessment on ICG and know this for a fact…” Now my curiosity was piqued. What was it that this individual knew?

I performed a detailed search on the term “Intercontinental Capital Group and Fraud” but this time, the search returned many more postings about unscrupulous dealings. There were many negative comments regarding ICG, but I noticed that there were also a few positive ones written by apparently satisfied customers.

The details of the pro-ICG postings were interesting. They appeared to have come from bona fide customers. On the one hand, the language seemed to be unbiased acknowledging some bad online press while on the other hand the writers claimed that they were very satisfied with the quality of service they received from ICG and that the company was entirely above board. One example read:

…I previously cancelled an appraisal appointment that I had scheduled with this company because I read something online that got me nervous especially being a single mom that just got back to work after being injured. I checked out these links and feel a lot better. I am going to give them a call and hopefully the rates are still low because I really would like to get rid of this adjustable rate mortgage and lower my monthly payments.
by educatedconsumer August 6, 2009 5:13

Then last week, I myself received a similar comment on my blog posting from a user who identified himself as “Joseph.” He wrote:

I received one of their letters and refinanced with them. They did a fine job and got me a good rate. I agree that maybe it wasn’t the best way of soliciting business, but it’s a tough market. Either way, they did the job they promised to do.
by Joseph October 28, 2009 13:33

Now, I don’t know about most people, but I certainly don’t spend my free time posting positive comments on blogs trying to sway other readers to believe that allegations of fraudulent or contentious services are unfounded.

I suspected that Joseph had some vested interest in ICG. From the crux of the comment left by him, it seemed that he was so moved by his mortgage refinancing experience that he became overwhelmed with the desire to spread the good news about ICG to the rest of the world.

When I examined the comment source, I noticed that the e-mail associated with it was Now it is possible that Jennifer, following the romantic style of George Sand, was using a nom de plume. But on the other hand it was also possible that Joseph was Jennifer’s darker side, I have heard of stranger things before. So I did some more research, then I slipped into my feminine persona and contacted her via e-mail asking for mortgage refinancing advice.

It did not take to long before I received the following ICG e-mail:

Hi Brittney,

Intercontinental Capital Group can probably give you a good rate and fast service. Their website is:

http : //

You should contact Brad Allen over there, he can give you the information you’re looking for. His phone number is 212.485.9655. His direct e-mail is

I hope they are able to help you!


Jennifer Margulis


I am looking into refinancing my home mortgage and would like to get more information about your services and rates.

Can you please provide more information about your offerings?

Best regards,

Brittney Darcey

A quick identify search confirmed my suspicions that Joseph and Jennifer Margulis were indeed one and the same (see image below). It also turns out that Jennifer was in fact an ICG marketing employee on a company mission to rehabilitate the ICG’s public image. Apparently, she found my posting about her company and decided to sprinkle some fluffy propaganda comments. To make them look more credible, her comments were disguised as coming from little Joseph, your all-American, happy and satisfied mortgage customer.

 Yaacov Apelbaum-Jennifer ICG Yaacov Apelbaum-ICG Margulis-1

Deceptive solicitation letters, whitewashing negative customer feedback and impersonating legitimate users in order to lure customers have no place in any business, even less so, in financial organizations that above all should uphold integrity and honesty.

Caveat Emptor

© Copyright 2009 Yaacov Apelbaum All Rights Reserved.

The Financial Advisor

You can’t miss him. He’s the guy with the freshly pressed $1000 suit, designer silk tie, and imported Italian shoes. His stylish attire is elegantly complemented by an expensive fountain pen, a standard issue Rolex, the latest cell phone, and a brand new luxury car. His physiognomy is unmistakable, styled hair, white teeth, and a nice tan; a modern day Cary Grant.

He’s a natural, standing out at every social gathering—in the fitness club, on the golf course, at church and synagogue. He is jovial and funny, the toast of the party, a real screamer.  Always the first to introduce himself, reaching across the room with a friendly and firm handshake.

He loves sports and works out regularly. Which one is his favorite? Well, he loves them all.  If you let him, he’ll talk to you for hours about the Super Bowel, the NBA, or the US Open.

If sports are not your thing, that’s ok, he’ll talk politics. But don’t get him started! He has an opinion on all matters domestic and foreign, and he’s not afraid to share them with you. He has strong convictions about capitalism, socialism, the government , the environment…you name it.

After just 10 minutes talking with him, you think “Wow, is this guy connected to the hilt!” He just got back from Washington D.C (important meetings with policy makers and various other movers and shakers). And then, there is his story about the White House—and check this out: a wallet sized group photo with the local congressman/senator/governor. And did I mention that he’s on texting terms with several high profile celebrities?

He’s not a loner; he frequently travels with the wolf pack. The lovely spouse is always nearby, ready to lend a hand. She will strategically join the conversation and make a joke or a teasing observation on his account (“Oh, my husband! He is such a Neanderthal. Ha, ha, ha!”),  while your own wife whispers in your ear to check out his adorable son: “He’s only 7! Doesn’t he look mature in his tailored suit!”  The kid, as if suddenly activated by some homing device, makes a B-line towards you for a handshake. “That’s my dad. He’s a financial advisor!” he says proudly.

By the time you’re done shaking hands with the kid, you realize that he’s dad has moved on.  You watch him mingling with other guests working the room like a cowboy in a rodeo, quickly branding the fattened calves for follow up. Than he’s back, telling you a joke about a CEO who signs a contract with the devil. Next comes the debriefing. What do you do? Who do you work for? Where is your office? Before you can say “Pocahontas”, he’s punching your e-mail and cell number into his Smartphone.

A few days later, as you are getting ready to grab a bite to eat, your cell phone rings. “Hey, how’s it going?” says the friendly voice “Who is this?” you answer confused. “It’s the CEO and the devil guy from last week,” he continues without skipping a beat. “Hey, I happened to be in your neighborhood and I’ve got something for you. Do you wanna do lunch? It’s on me.”  “Sure,” you reply, wondering what he can possibly have for you.

During lunch, he goes over more of the same routine. You discover that he either knows some C Executives in your company or knows someone else who does and he hints that he can pull some strings for you. After lunch as you are preparing to leave, he springs a few expensive tickets for some sporting event and tells you that he and his significant other would love to have you and your significant other over in their private booth to watch the game. “Come on, its going to be fun!” A few days later when you come home from work, you discover a few boxes of toys and a bunch of CDs and DVDs on your dining room table.  “What’s this, Honey?” you inquire.  “Mr. CEO/devil’s wife just dropped them off. She said that their kids just love them and she thought ours would too!”

This goes on for several months, with lunches, family get togethers, tickets to see a Broadway show and offers to use his timeshare in Disneyland for free. You eventually let down you guard; clearly these are such nice people.

Then one lunch, your newfound buddy, with an intense look on his face, tells you about this amazing 3-month, double digit return investment opportunity – But you have to act immediately! “How much are we looking at?” you inquire. “Oh, not much,”  he says, “just $100K.”  You politely decline, telling him that you don’t have that kind of money to invest. He says, “can you borrow it from someone?” Sensing a high pressure sales tactic, you say that you don’t feel comfortable borrowing money from people. Your dining companion loosens up and assumes his collegial persona again and says  “Hey, that’s not a problem, I’ll keep my eyes open for other opportunities for you, but I don’t know if they’ll be as good as this one.”

Then the conversation turns to your company and he starts debriefing you about acquisition plans, mergers, strategy, etc. His questions seem strangely reminiscent. Oh yeah, you just recently went over them in the corporate anti-trust and insider information certification course.  Now you realize that he’s actually fishing for insider information.

In a moment of complete mental lucidity, you suddenly get it. This guy is a professional shyster and he’s been playing you like a violin. Now would probably be a good time to end lunch and this relationship. But its not as easy as that. By now, he has woven himself into your social fabric. Severing the relationship now would cause you and your family mental anguish and would probably require some form of unfortunate confrontation. And what about mutual friends; what do you say to them?

And then there is the doubt issue. Even though now you know he’s dishonest and deceitful, shouldn’t you give him a break? After all, he’s just a another guy with a family and a mortgage trying to make a living, isn’t he? So, what do you do?

The moral of the story is that this is all a scam. Don’t let your emotions get the better part of you.  These individuals and their accomplices are cold blooded opportunists. They could care less about you, your family, or your financial well being. Their interest in you is purely financial and short term.  As far as what you perceived to be generosity (the free tickets, lunch, gifts, etc.), they’re just a device to make you feel indebted and emotionally dependent. 

Unfortunately, as many have discovered, few of us are immune from this type of relationship and manipulation. If you think that being scammed financially only applies to fools, check out the Who’s Who on Bernie’s list.

The majority of independent financial advisors\planners operate as one man shows and are not dissimilar to the elixir and snake oil salesmen of the Old West. To compensate for the lack of  breadth and depth of financial knowledge and operational know how, they rent an office at a respectable address, contract with financial service processor like Investors Capital, and purchase an off-the-shelf website that comes pre-loaded with content and functionality like whitepapers, newsletters, and financial calculators. The rest, is pure social engineering.

Despite the aura of legitimacy the financial advisor/planners industry is trying to assume through meaningless certification and NASD regulation, the fact is that it is riddled with dishonest, unscrupulous confidence artists. If you need financial or investment advice, go with a large non-contractor or commission based company like Fidelity. They won’t be able to guarantee double digit returns, but they won’t lose your investment overnight either. If you are new to investing, do yourself a big favor and carefully read the information on the FINRA site. You can also use some of their tools to check out your prospective broker buddy.

Good financial advice is hard to come by. Since most of us are not savvy enough to distinguish between the legitimate advisors and the Madoff wannabes, you should stay away from all independent financial advisors\planners, regardless of how smartly they dress or successful they appear. This especially applies to the ones you know through your social circles.

If you do happen to use an independent financial advisor\planner, you may want to scrub him against the following list of the 7 deadly sins of financial conduct: 

  1. Promising you a high return on your investment (especially ones in the double digit range)
  2. Using a sales pitch to tell you about sudden investment opportunities that require prompt action
  3. Soliciting you for insider information and asking you to act as a reference for other potential investors
  4. Paying you in cash or using proxy accounts (like personal checks from a spouse)
  5. Exhibiting dishonesty of any type (i.e. asking you to attend financial sales meetings masked as social events or having any previous SEC or NASD history of complaints
  6. Showing willingness to spend money on you for no apparent reason (including free lunches, gifts for the kids, etc.)
  7. Having a history of contentious job loss with larger financial institutions and lawsuits or litigation involving trading irregularities

If he fits one or more of these descriptions, it’s probably time for you and your investments to move on.

Caveat Emptor

© Copyright 2009 Yaacov Apelbaum All Rights Reserved.

Mortgage Refinancing Shysters I

Yaacov Apelbaum-The Shysters

It may be true that David Hannum was the first to observe that “There’s a sucker born every minute” (ironically, he himself turned out to be a colossal sucker), but it took the marketing genius of P.T. Barnum, the man behind such novelties as the bearded lady to turn gullibility into fortune. The world has changed significantly since the days of Barnum’s traveling freak shows where access to a new audience required lengthy cross country trips. Today, the Internet provides a virtual big top circus ripe with new ways to reel in and deceive, complete with unlimited seating for millions of new victims.

Eberhart and Kennedy in their excellent treatise “Swarm Intelligence” suggest that deception is quite common in social populations and they point out that all of us regularly practice it to one degree or another.  In support of their argument, they discuss the well documented El Farol algorithm frequently used by individuals to effectively compete in social communities in order to gain material or social advantage.

I recently I had occasion to consider this maxim and even try it on for size.  A practical and logical individual, I am by no means naive, so I was surprised—even blindsighted!—to discover that a certain financial advisor that I know personally is in fact a grade A shyster.  This got me to thinking about the varying shades of dishonesty and gullibility and the gray area that exists between telling “the truth and nothing but the truth” and outright lying especially as it pertains to financial solicitations.

You may have noticed that over the last year as the economy has spiraled out of control, the number of mail offers for mortgage refinancing has increased significantly.  The banks—which in the past were the traditional providers of such services—are still hemorrhaging profusely from the blunt trauma inflicted on them by the collapse of subprime mortgages. (I certainly don’t get any more solicitations for HELOC.) In what is further proof of the principal of horror vacui, it seems that the legitimate banking mortgage industry has now given way to a new breed of entrepreneurial ventures.  These con-corporations have smelled the blood in the water and are aggressively following Mr. Bigweld’s motto: “See a need, fill a need”.

Yaacov Apelbaum-ICG Envelope

Realizing that many of these solicitations were probably rip-offs, I decided to test the waters to see if I could find out who was behind one of them. As it happens, I didn’t have to wait long before receiving another mortgage refinancing solicitation letter. This one was from the Intercontinental Capital Group (ICG) and instead of sending it directly to my circular bin, I opened and read.

On the surface, the language and content of the letters was drastically different from the one I’m accustomed to receiving from my bank.  Whereas previous solicitations were factual and down to business, these were laced with crafty and deceptive language.

Yaacov Apelbaum-Intercontinental Capital Group Letter 1
Intercontinental Capital Group Solicitation Letter 1

Yaacov Apelbaum-Intercontinental Capital Group Letter 2  
Intercontinental Capital Group Solicitation Letter 2

After examining the details I found the following noteworthy features:

  • Disingenuous Claims of Previous Communication—In order to lower suspicions and fake familiarity, the letter claims to be a follow up on an already established relationship and ongoing communication.
  • Design to Deceive—The letter contains what on the surface appears to be a legitimate application number, a “second notice” tag, a recognizable equal housing lender logo and acronyms of well known public and federal organizations.  In fact none of these details has any significance and are there simply to create the semblance of legitimacy.
  • Vague and Deliberately Confusing Language—The letter states that ICG is “unconditionally endorsed by the U.S Department of Housing and Urban Development”.  When I called the toll free number I heard: “Thank you for calling the FHA application processing center”. ICG is certainly not a Federal Housing Administration (FHA) application processing center as the FHA neither issues loans directly nor has an application processing center.
  • Skin Deep Corporate Internet Presence—On the surface the company web site appeared to be fully functional, but when I tried to use some of its key functionality (login, change password, etc.) I quickly discovered that none of it worked.

Being deceitful in marketing is not news (see Mortgage Refinancing Shysters II for more details), so I take it for granted that any marketing campaign will always be laced with a certain amount of dishonesty, Seth Godin event thinks that All Marketers are Lairs. But “ICG” takes this to a whole new level.  This shadowy organization not only stretched their marketing collateral, they actually had some serious run-ins with several state banking regulatory agencies.

It appears that the vacuum created by the retreating lending banks is being filled in by old style confidence and run of the mill Internet scam companies. Be mindful of this and remember that “there’s no such thing as free lunch”.  If the mortgage refinancing offer you received looks too good to be true, it probably is.

Caveat Emptor.

© Copyright 2009 Yaacov Apelbaum All Rights Reserved.

An Afternoon with a Fraudster

Yaacov Apelbaum-The Fraudster

Your Friends at “Account Services”

Having spent a significant amount of time developing fraud detection algorithms and security applications, I have become accustomed to envisioning the common would-be cyber attacker as an inanimate abstract entity completely devoid of human traits; a mere abstraction, a stick figure in my UML and Test Cases. This sterile view of mine however, changed recently when I actually got a chance to spend some time one-on-one with a flesh and blood fraudster.

It started with a seemingly innocuous automated call from “Account Services”. The message informed me that I qualified for a limited time offer to lower my monthly credit card payments. I ignored that first call but shortly afterwards I received a second one. This time I opted to accept the call and was routed to a live representative. I told her that I was not interested in their services and did not want to be contact by them again.

At the tail end of the conversation as I was about to hang up, I inquired about how they got my phone number (it’s both unlisted and on the DNC registry) and to my surprise, the representative said that it came from my bank. When I asked which one, she became evasive, telling me that her company serviced all major banks. That was the moment I realized that I was the target of Credit Card fraud actively in progress.

Suddenly, my stick figure cyber attacker was no longer virtual. Instead, it became a living and breathing human being, an arm’s reach away on the other side of the line. This, I realized, was a rare opportunity to interview an attacker. I asked the individual to call me back on another line and when the phone rang a few seconds later, I raised my foreign accent by a notch, plugged the phone into my MP3 player and hit the Record button.

The representative identified herself as “Michelle. She sounded young, in her twenties. She spoke in a monotonous but confident voice, clearly a veteran of many exploits. The sales pitch was entirely script-based. She inquired about my current balance and asked if I had any interest in lowering my monthly payments. When I said, “I sure do,” she asked me for my bank and credit card information in order to “qualify” me. At that point we began a stubborn cat and mouse game where I was trying to get more information about her whereabouts and identity (real-phone number, e-mail, web address) while she was trying to get my bank and account information. This lasted for approximately 10 minutes all told.

It was only after I played back the recording and listened to it several times that I realized how sophisticated the operation was (you can hear the recording below).

The perpetrators of this scam had thought of the minutest details and prepared for every scenario. Some of the more interesting elements of the call included:

  1. Psychological Usage of Ambient Sound—During the duration of the call, I could hear incoming phone calls and chatter in the background. This recording simulating a response hotline was designed to create the illusion that I was talking to a busy call center. The objective of this subliminal messaging is similar to that used during TV fundraisers where operators are filmed sitting behind desks of ringing phones. All of it is meant to convince us that many others have already taken the plunge and that the water is “fine”.
  2. Call Traceability and Legitimacy—When I asked the rep where her call center was located she successfully identified the state that corresponded to the area code that appeared on my caller ID. I decided to test the number from my cell phone. The phone rang several times but when it was finally answered, I was routed to voicemail and encouraged to leave a message. The fact that the number yielded a response at all certainly made it appear legitimate.
  3. Well Scripted Dialogs—During the conversation, the rep responded in a consistent manner to my questions, reminding me (4 times) that I was being given the opportunity to lower my monthly interest payments. When I voiced my concern about the possibility that this call could be fraudulent, she responded calmly by stating (4 times) that even if this was the case, I would be covered for any losses by my credit card issuer as well as the Federal Consumer Protection Act.
  4. Plausibility—When I asked if I could call her back on another line to verify her number, she explained that hers was an outbound only call center. She also insisted that this was merely a screening call and that I was only a step away from being transferred to an account executive who would be happy to provide me with complete contact information.
  5. Professional Composure and Manners—Even though I asked her the same questions a number of times, she remained polite and composed, always maintaining a businesslike demeanor and projecting a image of a legitimate customer service representative.
  6. Effective Use of Higher Authority—When I insisted that not getting a manned phone number for the representative would be a deal breaker for me, she finally offered to transfer me to her manager. I was placed on hold (listening to Beethoven’s Für Elise) and was soon connected to another individual who identified herself as “LaFonda”, the floor supervisor. She sounded a bit older and more mature. She reiterated the previous sales pitch. When I finally told her that without being able to validate their authenticity I would not be able to give her my credit card number, she gave me the impression that they might deviate from their ‘account information first’ protocol. I was placed on hold again but shortly afterwards my original sales associate was back pitching the same story all over again. Finally, after one last failed sales attempt she quickly wrapped up the call and hung up.

Even though the call only lasted a relatively short time, I could not have wished for a better and more illuminating lesson. My mental image of the on-line fraudster has changed irrevocably. Whereas before I viewed fraud as an opportunistic low tech effort executed by crafty individuals, I now view it as a commercial enterprise, in many ways similar to a legitimate telemarketing niche industry. It employs a well trained workforce, cutting edge BI, telecom technology and a large database of would-be “customers”.

In retrospect, the whole experience was both sobering and frustrating. It was sobering because I finally realized that at its core, fraud is propagated via subtle means and recognizing it requires the aggregation of many nuances which individually may appear inconsequential (note that until its collapse, each individual component of Bernard Madoff’s asset management operation appeared to be entirely legitimate). In my case, the red flag went up because of my experience in the financial industry. As a rule, the association between a specific “Credit Card Service” organization and all commercial banks is unlikely. For another individual however, this certainly could have been a plausible explanation and this applies to everything else that was said during the conversation.

The frustration, on the other hand, comes from the realization that my current toolbox of risk analysis and fraud detection routines (which are primarily based on triggers like transaction frequency, amount, location and history) cannot independently identify this type of fraud and will require for at least the foreseeable future some supplemental human supervision.

© Copyright 2009 Yaacov Apelbaum All Rights Reserved.

Risking it All!

Yaacov Apelbaum-The Wall Street Curise MS
Over the past two years, it has become increasingly clear that the scenes of carnage starring the world’s oldest and largest banks and our 401Ks are merely a symptom of a larger problem. By now, everyone has gotten used to the daily media’s serving of congressional hearings and testimonies showing the pale captains of industry publicly gnawing their fingernails, sobbing and informing us that they ‘did not and could not have predicted’ such an outcome.

Suddenly, everyone (including the FBI) is trying to figure out what happened to the money, why the global credit crunch is so severe and ultimately what is the single silver bullet that will solve the problem. Good questions to which there are many answers but probably no permanent solutions.

The causes of this great turmoil are really simpler than the media portrays them. They have nothing to do with complex derivatives and speculative trading. They can be attributed to the simple failure of the traditional banking risk assessment and mitigation practices. Ten years ago, no bank would lend a dime to someone that is credit unworthy. So why did veteran banks like Chase let down their guard? Because we are all in it for the money, and ultimately the banks can’t resist a good bubble, no more than you or I could.

From the historical prospective, this hysterical investment extravaganza is certainly not new. You can easily find a large number of similar examples—all of which oddly tend to replay themselves every few centuries—like Tulipmania, South Sea Company, Railway Mania, and the ever popular real estate bubbles.

The bankruptcy filing of Lehman Brothers (they lost a whopping $40 billion!) is probably one of the most poignant illustrations of how the toxic fumes of incompetent leadership, the inability to understand risk, and mitigate it have permeated the global economy. Though the handwriting has been on the wall long enough for all professional money managers to have reduced their exposure, surprisingly very few actually have. Even the black prince of finance, George Soros, who ran $20 billion in assets, actually raised his stakes in Lehman Brothers just months before its collapse.

Unfortunately, the tide raises and lowers all ships and due to the tightly coupled nature of the financial industry where trust and risk are easily transferable, the collapse of one bank on the scale of Lehman Brothers will by extension cause other banks to slump over like wet burritos.

Hyman Minsky had struggled with these problems for quite some time before eventually concluding that, for better or worse, our two stroke economic engine is driven by these business cycles and there is not much we can do about it.


© Copyright 2008 Yaacov Apelbaum All Rights Reserved.