Scams are a dime a dozen. People who get conned are often educated and “smart.”
The truth is that being educated is not a guarantee that you will be safe from scamsters. Your vulnerability is dependent on your personality, attitude, values and behaviour.
An extensive survey was carried out by AARP about the difference between those who get scammed and the general investor population. There are also studies which talk about personality characteristics associated with those who get scammed.
In a nutshell, this is it what makes scam victims different from others:
- They are likely to value wealth more. Greed plays a part.
- They are likely to make more than five investments in a year. In other words, they are always looking out for opportunities to invest.
- They often believe that safe, government investments are a poor investment avenue.
- They are likely to play the lottery or gamble.
- They tend to be impulsive.
- They are often single or feel isolated and lonely.
- They have recently lost money or a job. In fact, in the aftermath of an emotional upheaval, a person is emotionally vulnerable. Judgement can be impaired.
If more than three or four of the above apply to you, then you are probably in the vulnerable group.
Fraudsters are very cunning and they use flattery and persuasion to catch people in their net. Here are some of the techniques they use.
- They use symbols of authority to attempt to build trust by impersonating banks, the government or famous companies.
- The carrot they offer is very lucrative – often high sums of money or wonderful jobs.
- They usually start by persuading you to do something small, and that is how they build trust.
- There is always a sense that what they are offering is scarce in some way and that if you don’t take the opportunity now, you will be the loser.
- Usually, they ask that you keep everything secret, for your own good.
- Flattery is often used, by telling the victim how good they are in their judgement. When someone talks to you sweetly, the temptation to do exactly what they want is very high.