Dear Victim: Understanding the psychology behind scams

BY DBS, 14 JUNE 2022

By exploiting an inherent way we process information, scammers make it hard for victims to say no

Imagine leaving the house every day expecting the worst to happen. Sounds exhausting, if not implausible.

In fact, for many of us, it’s the opposite. Research has found that our brains have an “optimism bias”, which is, simply put, the belief that we’re less likely than our peers to experience negative events and more likely to experience positive ones.

Some call it an illusion of invulnerability – and it is one reason we end up victims of scams.

Ms Carolyn Misir, principal psychologist at the Police Psychological Services Department, explained, “Scammers leverage cognitive biases. These are mental shortcuts that we all use.”

“One popular shortcut is the optimism bias. People don’t go around thinking something bad will happen to them … And most people can’t go around thinking of all the worst-case scenarios. So (when they encounter a scam) people don’t think ‘oh, this might be a scam’.”

- Ms Carolyn Misir, principal psychologist at the Police Psychological Services Department.

And that is what fraudsters depend on.

An age-old tactic to exploit how we process information

Police statistics show that the rise in crime levels in Singapore in 2021 were driven by a large spike in scam cases. Of the 46,196 cases reported, more than half (23,931 cases) involved scams – a 53% increase from the 15,651 cases reported in 2020.

There is a plethora of scam types, with job scams, phishing scams, e-commerce scams, investment scams and loan scams among the top categories reported. It begs the question: why – despite all the efforts to raise awareness around such criminal behaviour – do people continue to fall prey?

While fraudsters’ tactics continually evolve with circumstance, what has endured the test of time is the psychological techniques they employ.

Ms Misir describes it as scammers preying on “certain informational processing routes that’s inherent in us” – in this case, manipulating the way we process information so that we comply with their demands.

There are two ways we process information:

  • The central route, where there is deeper, more logical processing
  • The peripheral route, which is more superficial, emotion-based processing

Scammers use techniques, such as creating urgency, to activate this peripheral route so that victims make quicker and poorer decisions.

Assistant Professor of Psychology Kenneth Tan from the Singapore Management University cited instances of fraudsters baiting potential victims with large sums of money or promise of cures, which lead to increased heuristic thinking – the use of mental shortcuts – and lower rational processing, which is akin to the aforementioned central route.

“Dear victim….”

Another persuasion technique is the truth bias. Dr Tan described it as, “Exploiting the human tendency or assumption that others are usually telling the truth, especially when it’s repeated consistently.”

He added, “They (scammers) could prey on loneliness and fulfil one’s need to belong by getting you to trust them.”

To appeal to people’s emotions, scammers do things that either initiate a sense of trust or assume a sense of trust with, say, the person reading a scam text, said Associate Professor Joyce Pang, Head of Psychology at the School of Social Sciences, Nanyang Technological University, Singapore (NTU Singapore).

For instance, addressing the recipient with “Dear” implies a previous communication even if it wasn’t the case.

“The use of this language creates a prior relationship and a sense of trust and intimacy in the reader's mind, which makes them more likely to believe the content of the scam text.”

- Associate Professor Joyce Pang, Head of Psychology at the School of Social Sciences, Nanyang Technological University, Singapore

She also pointed out that some people who are vulnerable to scams are also lonely and lack social support – “so they not only don’t have the necessary social network to share information with them, they are also emotionally vulnerable”.

“So the promise of a continuing relationship and communication is as important as the potential positive reward”.

Assistant Professor of Psychology Kenneth Tan from the Singapore Management University outlines several persuasive techniques scammers employ:

  • Truth bias: Exploiting the human tendency or assumption that others are telling the truth, especially when it’s repeated consistently. They could prey on loneliness and fulfil one’s need to belong by getting you to trust them.
  • Authority: Intimidate by claiming to be from official government sources (such as the Ministry of Health, Police). They could also establish credibility through the use of authority, which also results in greater trust.
  • Increased Heuristic Thinking: Using large sums of money, promise of cures etc. Higher heuristic processing might lead to lower rational processing. They could also use scarcity, or time pressure to get people to respond immediately. This also reduces rational processing or the ability to verify information provided by scammers.
  • Foot in the door: By getting you to commit to small commitments first, people want to remain consistent and are hard pressed to say no later after saying yes earlier. Scammers build momentum in this way.
  • Sunk costs: After victims transmit a small sum of money, scammers explain that more money might be needed to complete the transaction. Victims comply because they do not want to lose the time, effort or money that they had initially invested, even if it might not be the most rational thing to do.
  • Similarity: Scammers try to make victims believe they have something in common with them, to induce trust and reciprocity.

Said Ms Misir, “What we do notice across different scams is that not just one technique is used. It's always a combination of various kinds of techniques, depending on the kind of scams.”

For instance, an impersonation scam uses an authority figure, as well as scarcity and behavioural commitment. In love scams, fraudsters use the persuasion techniques of commitment and reciprocity.

Scammers also use visceral cues, which give rise to emotions, like fear and greed. “The idea is to get you to feel very emotionally aroused so that you would not think too much about it and comply with the scam demand,” she said.

Who, me?

In 2020, a National Prevalence Survey of Scams (NPSS) was conducted in Singapore by psychologists and research analysts from the Home Team Behavioural Sciences Centre and Police Psychological Services Department, to gather a more comprehensive understanding of the scam situation.

It was the first of such studies here and sought, among others, to examine the behavioural and psychological mechanism of scams. The survey found seven in 100 respondents fell prey to scams. Out of the respondents, 4% fell prey once while 3% were repeat victims.

Victims reported the highest average of 5.18 scam encounters per month, compared to those who almost got scammed (3.49 encounters) and those who evaded falling prey (2.76 encounters).

The survey also identified victim profiles, which included males, young adults aged 20-39, working individuals, those living in large households and those staying with their parents were more vulnerable to falling prey to scams.

These were groups over-represented in the victim pool. For instance, young adults made up 48% of the victim pool, even though they only constituted 33% of the overall respondents.

The survey, however, stressed that “it is not an implication that an individual who does not fall into this victim profile is safe from scam victimisation, and vice versa”.

There are certain traits and attitudes that could lead to one being more likely to be scammed. For instance, impulsivity, or the inability to inhibit impulses as well as lack of self-control.

“Impulsive individuals are less likely to plan and more likely to go with their gut,” said Dr Tan.

Ms Msir noted that people have different triggers. Ultimately, anybody has the capacity to be scammed, depending on the situation, she said.

For instance, one might react quickly when told one’s bank account is locked, and share their OTP without further thought. Or a parent might have a stronger emotional reaction on matters concerning a child.

Another factor is around risk-taking as well as risk-perception, said Dr Tan.

“Those who have higher risk tolerance and take more risks are more likely to be victims of scams. This could be related to such individuals not perceiving things as risky,” said Dr Tan. “It is still unclear why some individuals fail to see risks though.”

Some research also point out that another predictor of being scammed is whether one has been a victim before, continued Dr Tan.

“If one has been a victim of scams before, they are more likely to be scammed again. This is still preliminary, but perhaps we need to do a better job of re-educating scam victims.”

– Assistant Professor of Psychology Kenneth Tan, Singapore Management University

The NPSS also cited traits such as compliance, low self-esteem and complacency. It noted that “victims, especially repeat victims, experienced higher levels of stress which may have put them in a more vulnerable emotional state, and hence a greater risk of being susceptible to scams”. Stressful life events included negative changes in financial status and concerns about being lonely.

Personal situations like unemployment or a setback in a relationship could cause one to be more susceptible to the persuasiveness of scams offering high stakes and attractive, easy to realise rewards, said NTU’s Dr Pang.

Assistant Professor of Psychology Kenneth Tan, Singapore Management University shares some red flags to look out for.

  • You are pressured a lot, without time to respond
  • You are asked for small fees for bigger returns
  • Scammers will not meet you face to face
  • Scammers may want to get payment in a strange way

Take a “cognitive break”

“If you identify that you're in a state of high emotion and the stakes are pretty high, check and make sure that your decision is not made from an emotional place, but rather from evaluating all of the information,” said Dr Pang.

“If you take what we call a cognitive break – just really pause, step away from the situation and independently verify what this person is telling you, the likelihood of you falling into scams might be lower because you have stopped and checked.”

- Ms Carolyn Misir, principal psychologist at the Police Psychological Services Department

Said Dr Tan, “To stop commitment and momentum of scammers, a firm no at the beginning helps you to establish boundaries. I think asking many questions to the scammers could help spoil their plans.”

“Sometimes we just have to walk away with small losses. We should also not be overconfident that we are immune to scams, ironically such overconfidence plays a part in susceptibility to scams.

Interestingly, scams happen because victims actually act on what scammers tell them to do. Inaction and ignoring scammers might be another way of protecting ourselves from scams.”

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