Why we fall for scams (and it’s not because we’re stupid)

HE WAS a restaurant owner-cum-chef in his 30s, whose business was suffering due to the Covid-19 pandemic. He needed money to pay rent and other overheads, but couldn’t get a bank loan.

Eventually, he found a money lender online, who offered him a good interest rate and assured him that not much documentation was needed. He went to the money lender’s address to see if it was legitimate, but couldn’t find the office.

His next decision proved to be the wrong one – he rang the lender to ask about the office and was told it was closed due to the pandemic and everything was done online. He accepted the explanation and transferred money to pay upfront administration fees totalling some S$70,000. Then, the lender disappeared.

“The victim tried to make a verification by going to the office address – unfortunately, it wasn’t an independent verification,” says Carolyn Misir, principal psychologist at the police psychological services department of the Singapore Police Force (SPF).

You’re probably thinking you’d never fall for something like that.

But the truth is, anyone can become the victim of a scam, and that includes well-educated and savvy folks.

Scam victims who reach out to the non-profit Global Anti-Scam Organisation, for instance, include scientists, professors, architects, lawyers, accountants, auditors, bankers, doctors, geologists, cryptocurrency investors and company vice-presidents. Most had tertiary qualifications.

I not stupid

Is there a typical victim profile?

Misir says there isn’t. Different people are targeted simply because they have different needs or vulnerabilities.

The restaurant owner was in need of money. For others, it could be loneliness, the fear of being blocked from one’s bank account, excitement over finding a supposedly good deal, the need for a job, or simply the chance to make money – fast.

In the case of seniors, it could also be gullibility triggered by fear or ignorance, says associate professor Tan Ern Ser, a sociologist from the National University of Singapore (NUS).

Most people, says Tony Ong, clinical director at Counselling and Care Centre (CCC), are predisposed to certain psychological and emotional states and desires where they are most vulnerable to subterfuge.

For instance, love scams target persons who desire to be connected with another intimately, while investment scams gun for those who want to make big returns.

“These persons who are scammed would usually make decisions based on their emotions without the consultation of others and within a short period of time,” says Ong.

Their relationship with the scammers may also be unknown to their loved ones. And even if their family and friends were to cast doubts over the character of the scammers, these survivors (Ong’s preferred term instead of “victims”) may shrug off doubts because the scammers have targeted their vulnerabilities.

Sometimes, there may have been a recent crisis, which makes someone psychologically more vulnerable, adds Misir.

“Scammers will try to comfort that person and, from there, try to seek a relationship and ask for money thereafter,” she says.

“So, what happens is that in different scams, scammers target different vulnerabilities; different needs from different victims.”

I not old

Police data shows that scam victims in Singapore lost a total of S$660.7 million in 2022, up from S$632 million in 2021. Over 53 per cent of scam victims were between 20 and 39 years old.

“Younger and ‘highly-educated’ people appear to be the most likely victims, and this is probably because they are more familiar and connected with the digital world,” says Jennifer Cheng, director of cybersecurity strategy for Asia-Pacific and Japan at cybersecurity and compliance company, Proofpoint.

Such victims will have different social media accounts, and are very comfortable shopping, banking and communicating online.

A total of 27.2 per cent of victims aged 20 to 29 fell prey to job scams, which typically involve victims being offered online jobs such as liking social media posts or reviewing hotels and restaurants. Victims are lured into providing more funds after initially receiving some commission for their work.

Young adults aged between 30 and 39 also lost money to e-commerce scams – with 18.3 per cent of victims in this age group paying for products that weren’t delivered.

“Younger people have more cyber presence and scams tend to be perpetrated on these platforms,” notes Misir, adding that face-to-face interactions with scammers are very rare, as they are careful to maintain a barrier.

Besides, carelessness and greed, together with a lack of wisdom and discernment, while being obsessed with making it big or doing well at a relatively young age, could also be factors, says NUS’ Prof Tan.

I not target

People need to know the kind of crooks they’re dealing with, and scammers are a seasoned lot who are laser-focused on their goals.

“Their tactics are evolving and threat actors are employing increasingly sophisticated techniques,” says Cheng. “Today’s cyberthreats are successful because they rely on human interaction, not just technical exploits.”

She says attackers use social engineering, where victims are psychologically manipulated (usually through fear and urgency) into performing an action, such as sending the attacker money or divulging confidential information.

Scammers are also excellent listeners who target aspects of vulnerabilities in others. “They base their strategies on the responses of survivors by seemingly meeting their needs,” CCC’s Ong explains. “The relationship would culminate in the survivors giving in to the requests of the scammers, based on the perceived trust the survivors see in the relationship.”

Scammers employ multiple persuasion techniques and cognitive biases which can be used on virtually anyone, says SPF’s Misir.

In a job scam, they would create legitimate-looking websites and logos, using the technique of authority. Then once the victim starts adding things to the cart or “liking” stuff to earn commissions, they will be told that to get a higher commission or unlock greater rewards, they need to sink more money into the account.

“Victims will be enticed to do that, and the reason for this is behavioural commitment and consistency because once you’ve started a behaviour, you’ve sunk money into it, you’re likely to continue the same behaviour, following the same logic,” says Misir.

There is also a sunk cost fallacy at work. This is a cognitive bias which causes victims to reason that since they’ve already sunk money in, why wouldn’t they want to put more in to gain a higher yield?

At the same time, scammers make use of a near miss fallacy, telling victims that they’re almost there, and can get to a higher tier. Additionally, victims also receive social proof by being added to a group chat where others are supposedly waxing lyrical about how great the job is and how much money they’ve made. Trouble is, the only “real” person in the chat group is the victim.

“In a short space of time, the scammer has used at least four different types of techniques,” notes Misir. “So it’s not really one particular technique that is salient but in different scam parts, scammers are leveraging different techniques and different cognitive biases to induce the victims to comply with their requests. It’s quite powerful.”

Olivia Choy, assistant professor at the School of Social Sciences at Nanyang Technological University, notes that messages involving time-limited responses that reduce the amount of deliberation have been documented to be effective, as are scam messages that frequently emphasise the urgency, scarcity and uniqueness of an offer.

While there is relatively limited research on scam offending and victimisation generally, research on other types of offenders show that better cognitive abilities help some individuals be more ‘successful’ than others, says Prof Choy, a biopsychosocial criminologist.

“What we know from research on ‘successful psychopaths’ is that they exhibit better executive functions, which are higher-order cognitive capacities that allow individuals to consider consequences and achieve goal-oriented behaviour,” she adds. “These abilities include planning and cognitive flexibility, among others.”

Psychopaths are generally defined as individuals with an egocentric and antisocial personality marked by a lack of remorse for their actions, a lack of empathy for others, and often criminal tendencies.

I not okay

What we don’t talk much about is what scam victims struggle with.

Ong says that apart from having to grapple with huge financial losses and burdens, survivors may find themselves facing a range of emotions from anger, hurt and sadness to shame.

In these traumatised states, survivors may also find it hard to find faith in another person who may truly care for their well-being. “Thus, some of these survivors would even refrain from reporting these scams to the authorities and telling their family members,” he notes.

Instead of recognising that these are scammers’ ploys and tactics, survivors often blame themselves for not seeing warning signs as they examine the scams in retrospect.

“As a result of their anger towards themselves, some survivors may find it difficult to cope and fall into depression,” says Ong, adding that they may find themselves on a lonely journey of grief and loss as they recover, if they do, from these scams.

How then, can we help ourselves or others heal from being scam victims?

Prof Choy says initial research has highlighted the psychological impact scams can have, which include fear and helplessness. “This has resulted in calls to be more mindful of the psychological impacts of such crimes on people around us and to refer victims to early psychological intervention.”

Indeed, while it is very tempting for one to try to understand how the scam occurred and seek recourse, it is more helpful to pay attention to the varied emotions of the survivor and respect their wishes, says Ong. This would give them a sense of control over their already out of control lives as a result of the scam.

“It is important for family and friends to manage their reactions towards the injustice that had been committed against scam survivors,” he emphasises. “This is so that their expressed anger would not come across as attacks on these survivors.”

Practical help can also be given, such as accompanying survivors to file a police report or speaking with a counsellor about their conflicting emotions and future directions in managing their loss.

“As far as the survivors (are able), family and friends can help them get back to routines of life as a form of helping them find some normalcy in their lives in the abnormal experience of a scam,” says Ong.

Sound advice to keep in mind, just in case.