Most financial service providers won’t tell you what is true and precise. Rather, they will convey messages that will sell their products. Having said that, most clients tend to believe what is visualized on charts and statistics. Let this article unveil the lies behind the financial statistics, as well as how the providers deceive, falsify, or exaggerate financial materials.

American writer Darrell Huff, in his 1954 book "How to Lie with Statistics", outlined that illusion of precision is one of the classic examples of deceitful act. They will make a figure more convincing by putting decimals on it. For instance, instead of reporting the US employment declined to 6%, which is the real data, they will write it as 5.4%.

They also use also several percentage tactics. When a provider says their pool of financial advisors expanded by 50% in 2014, that is an impressive claim. Bragging about that is more interesting than merely saying that another full-time advisor will join the ranks the following day. Another example: a firm indicates China is a good investment because inflation rate has fallen from 7.2% to 5.1%. But what if 6.5% is China’s real inflation rate?

Let’s go to charts. They normally confuse people by choosing the start or end point to highlight only a chunk of the process. For instance, providers will begin the graph in a lowest low to emphasize an upward trend. Or to accentuate an upbeat chart, discard the downturn. Applying such schemes can turn a success into failure (or vice versa), or close to bankruptcy into a failure. Well, the truth always prevails. However, the seller might have taken the money and run.

Sellers also use pictograms to mislead buyers. They can make a particular news or data appear bigger than the actual, such as doubling the size of a magnitude or a currency’s value, or bulls dominating the bears (when it is actually the other way around).

Then, there’s also sampling techniques which can affect the numbers. For example, a brokerage firm administers a poll about their clients’ feedback on their services. What if they surveyed only 30% of their entire customer base, or chose the best responses?

Unfortunately, that is the sad reality about providers, and we cannot do anything to stop them from deceiving their clients. No one is safe from this falsification, but we can do something to avoid it. It is important to run a background check about the entity before availing their services. If necessary, obtain recommendations, get second opinions, tap an expert, and double-check, among others. Better be safe than sorry.