The Psychology of Scams: Why People Fall for Them & How to Protect Yourself

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According to the Federal Trade Commission, Americans reportedly lost almost $8.8 billion to scams in 2022, a more than 30% increase from the previous year. One reason for this epic growth is the increasing sophistication of fraudulent activities, making them ever more difficult to anticipate and detect.

But one thing is for sure—scammers do not discriminate. Anyone can fall victim, regardless of their gender, age, location, race, profession, or education level. You likely have an equal chance of encountering fraud as the person next to you.

Despite the alarming statistics, you may feel confident that you will never get entangled in a deceptive scheme. But the psychology of scams tells a different story. Let’s explore this further.

Why Do People Fall for Scams?

Humans are highly emotion-driven, and given the right context, their sense of logic and rationality could easily evade them. Knowing this, scammers devise a variety of manipulation techniques to trigger emotion-led decisions that make you susceptible to their ploys.

Here are the common strategies they can use to influence you:

Creating familiarity

When you think you are dealing with a familiar individual or organization, you are more likely to believe what they say and put your guard down. In other words, familiarity builds trust. It is why con artists use impersonation tactics to defraud victims.

For instance, they could imitate your bank to get their hands on your bank account information and online account passwords. Or, they could even mimic a loved one in trouble to steal money from you.

In all these instances, a sense of familiarity makes you less suspicious or wary that something is amiss. This makes you more prone to fall victim to fraud.

In some cases, deceptive individuals may also adopt various other tactics to put you at ease and make you more trusting. If you have children, for example, they could pretend to have kids of the same age. By creating a false sense of shared experiences, circumstances, values, and interests, they can come across as relatable and familiar and, thereby, easily win trust.

Exploiting your fear of losing out (FOMO)

Many people can act irrationally when faced with a fear of losing out.

Take, for example, a product promoted by a celebrity on social media. When they claim to have sold millions of inventory, you may feel reluctant to miss an opportunity to be part of an emerging trend. But, in fact, it could be a scam that uses deep fake technology to recreate a famous A-lister.

Greed is another offshoot of FOMO. It frequently causes many unsuspecting people to fall for investment and cryptocurrency scams that promise once-in-a-lifetime opportunities to make extraordinary gains.

Using time pressures

Limited-time deals and discounted offers that last until stocks are available are common strategies marketers devise to sell products. Scammers are no different. They regularly use similar pressure tactics to get victims to provide personal information or transfer money to enjoy special offers and benefits.

These often prove effective since you are less likely to ask questions, seek advice, or verify information when acting in haste.

Exploiting your authority bias

Fraudsters could also take advantage of your inclination to believe, accept, or follow authority figures. They may, for example, impersonate the IRS and call you demanding an overdue tax payment. Although you may not recollect any unpaid taxes, you will be more inclined to accept what they say without questioning their motives.

Leveraging empathy

Compassion is a powerful human emotion, typically manipulated by scammers.

Remember, during times of disasters and distress, people are more likely to come forward to help fellow citizens and local communities. Charity scams also surge during these periods to mislead caring and empathetic individuals.

Creating hope and anticipation

Optimism can make you forget rationality and consume you with emotions. This explains why many victims fall for fake lotteries and sweepstakes when offered high-value prizes in return for a relatively small payment. It is also why people buy into fraudulent medicines and treatment plans that promise cures for critical illnesses.

Misusing your reluctance to say no

The people-pleasing nature of humans can often prevent them from saying no to others, whether it is a charity seeking a donation or a telemarketer selling a subscription.

Beating the Psychology of Scams: How to Protect Yourself

Exercising good judgment and adopting deliberate measures to remain safe is critical for avoiding the various manipulative tactics deployed by scammers.

Here are practical steps you can adopt:

• Probe for more details

Despite their reassuring storylines, most fraudsters will fail to provide in-depth and consistent information when probed. So, by being inquisitive and asking questions, you can extract details that could help identify scams.

• Research and verify

Whenever an organization or individual reaches out to you, remember to verify their identities, no matter how convincing they may seem. For instance, if a charity contacts you for a donation, research them online to confirm the information they have shared with you. Check their phone number on PhoneHistory to see who owns it. If they appear to be a legitimate organization, contact them again using their regular hotline to authenticate the earlier call.

• Avoid hasty responses

When you are required to make a decision, take time to assess the information, weigh the situation, and determine the best course of action without giving in to undue pressure.

• Keep personal information secure

Protect identifiable and confidential personal details using strong passwords and two-factor authentication. Avoid posting them online or sharing them with organizations without a justifiable reason. Protecting your devices from malware threats is equally important.

• Be wary of unusual payment requests

Practice caution when dealing with anyone asking for a monetary payment—whether it is an IRS official demanding a pending tax or a lottery board requesting a processing fee to claim a prize.

Unusual payment methods should raise alarm bells, too. These can include cryptocurrency, gift cards, wire transfers, and prepaid cards.

• Ignore unsolicited communications

If a call, email, or message is unexpected, it is best to tread with care. Avoid following prompts from automated messages, clicking links shared via SMSs, or downloading email attachments.

To Sum Up

The manipulative psychological tactics deployed by scammers can take a variety of forms. These can include creating a sense of familiarity, urgency, hope, or anticipation and exploiting your authority bias, fear of losing out, empathy, and innate people-pleasing nature.

However, avoiding fraud and minimizing its threats is possible by adopting sensible and deliberate security measures. A cautious approach and using your best judgment will also go a long way in keeping you safe from fraudulent advances.