“I would never fall for that,” You tell yourself confidently as you watch the local news share a story about yet another unsuspecting victim being scammed by a clever con artist. However, it’s rarely that simple.
Although some scams seem easy to spot, there’s a growing number of scams that are becoming much harder to identify. The truth is, nobody is immune to fraud, and this is in part due to the clever psychological tactics used by scammers.
Stay informed and alert by building on your knowledge behind the psychology of scams.
A theory on why people fall for fraudulent scams
‘Optimism bias’ refers to the tendency of individuals to underestimate the likelihood of falling victim to a fraudulent scheme. People often believe that they are less likely to be deceived or affected by scams compared to others, which can lead them to ignore warning signs and take unnecessary risks.
This cognitive bias can make individuals more vulnerable to scams as they might not take the necessary precautions or be as vigilant in assessing potential threats. As a result, they may overlook red flags, such as unsolicited contact, believing that they are too smart or well-informed to become victims.
It is essential for individuals to be aware of this bias and adopt a more cautious approach when evaluating potential opportunities or offers.
What are the main psychological tactics that scammers use?
There are three main psychological tactics that scammers use in order to trick their victims:
1. Time pressure
As humans, when we’re forced to act quickly, we tend to make poor decisions. On a day-to-day basis, we make hundreds of decisions without reflection. A scammer wants to take advantage of that.
One example is when a scammer impersonates a bank and tells you that someone has access to your bank account, and you need to take action immediately. To feel in control of the breach of privacy, your brain feels comfortable in taking action right away.
2. Authority bias
When we are approached by someone impersonating from a position of authority – such as a bank manager, a police officer, or member of the government – we tend to feel like we can trust them more.
For example, receiving a work email from a manager or senior member of your company who urgently needs you to purchase some gift cards under the promise you’ll be reimbursed once you send through the gift card details.
3. Greed and status
Nothing comes freely. We know this, and yet we can fall into the trap of FOMO (Fear of Missing Out) or the lure of getting something that nobody else is.
These types of scams are apparent with the Ponzi scheme debacle, a type of financial fraud. The scheme led investors to believe that profits were coming from a genuine, successful enterprise, when in reality, the money was simply being circulated from new investors to earlier ones.
Protect your brand with FraudWatch
Think you’ve been the target of a scammer? One of the best things you can do is stop and ask yourself: “Does it sound too good to be true?” If the answer is yes, then it probably is. You could also sense-check with a trusted friend or family member, who can give you a third-person read of the situation.
When it comes to your business, prevention is better than cure. Defend your business against scams with FraudWatch. From social media scams to phishing, our experts can recommend specific actions to help mitigate any potential threats. We can also provide your employees with training on psychological tactics relating to scams.
Get in touch with our team today to learn more.