So, who falls for online fraud, anyway? The answer may surprise you. Like many crimes, fraud is hidden in a veil of shame, and people rarely hear about instances of it from their friends and relatives, because of embarrassment. No one wants to admit they have been fooled, much less out of money by someone when they feel they should have known better. Online is a world where people can be anything they want, and they can pretend to be your friend, and essentially create an atmosphere where the victim feels like they are involved in a genuine relationship with the person on the other side. We see stories all the time on “catfishing”, which is a person pretending to be someone they aren’t for dating purposes. Other common scams include soldiers asking for funds so they can come home for leave, and the classic “Nigerian Prince” scam, where you are asked to process funds over the wires for someone stranded outside the country, in which case you will be reimbursed. While most people have caught on to the old school scams, individual, personalized ones continue to thrive. Social media accounts pretending to be psychics, or your favorite movie star are examples-they often message, asking for money to fund a new venture, or to lift a spell. Scams are growing in sophistication and none of us are immune to any of the various types of online schemes. The more venues we use the the internet, the more opportunities for fraudsters to explore and exploit, whether it is inheritance scams, various types of shopping cons, bogus job offers, fake sweepstakes and lotteries.
Principles of Influence
Online influence is a current buzzword, and Dr. Robert Cialdini has written Influence: The Psychology of Persuasion, Dr. Cialdini has identified six “universal principles of influence,” which scammers use to subtly persuade people to do certain things. Cialdini’s principles include:
- Reciprocity: The natural tendency to repay others for providing us with something. Studies show that when someone receives something, they feel obliged to reciprocate.
- Consistency: Most people value reliability in others and try to be reliable themselves. Therefore, people are motivated to be consistent with their prior statements or actions, and after someone makes a choice, he is apt to behave consistently to justify that decision. Scammers take advantage of this desire to be consistent by initially asking for something small and inconsequential but then asking for more later.
- Social Proof: When someone is unsure, he is apt to look to others for cues as to how to behave. Even when someone is confident in their beliefs, consensus opinions can be very persuasive, and the more people are taking action, the more correct that action will seem.
- Liking: People are more likely to say yes to someone they like than to a stranger, but even a stranger can be persuasive if he is perceived as nice. Therefore, scammers spoof or hack email accounts to send phishing emails to that person’s contacts hoping that the victim’s friends will be more likely to respond positively to a friend.
- Authority: People are more likely to say “yes” to those seen as authorities or experts. Scammers may pose as an authority figure, such as a top executive, and demand quick action. When combined with urgency, people are often afraid to say no to an authority figure.
- Scarcity: When something is perceived to be in short supply, we are more likely to want it. Scammers will take advantage of our desire for things in short supply by putting a time limit on their offer or by telling people that their account will be deactivated in 24-hours if they do not immediately respond.
In a surprise twist, and according to the FTC website- Gen Xers, Millennials, and Gen Z young adults were more likely than older adults to report losing money to fraud. Younger adults reported losses to online shopping fraud – which often started with an ad on social media – far more often than any other fraud type, and most said they simply did not get the items they ordered. Younger adults were over four times more likely than older adults to report a loss on an investment scam. Most of these were bogus cryptocurrency investment opportunities. And this age group reported losing money on job scams at more than five times the rate of older adults.
Older adults did report losing more money, however. None of this is good, and again, education is a security measure in and of itself.
How To Protect Yourself
At the end of the day, here are a few tricks that help keep you safe from online scams:
- Avoid providing personal information to strangers calling or emailing you.
- For online shopping, use trusted apps/websites and secure networks
- Log on to websites of interest directly (not through other sites).
- Watch out for pop-up messages asking you to call or provide personal info.
- Create strong passwords (random combinations of letters, symbols, and numbers).
- Avoid sharing your passwords or personal identification number (PIN).
- Make sure your anti-malware and antivirus programs are up to date.
- Watch out for sweepstakes scams (e.g., a scam saying you won a cash prize).
- Do not be pressured into making advance payments.
- Get third-party reviews before making major decisions.
- If you have been a victim of a scam or fraud, report it (e.g., to your bank).
- Consult consumer resources (e.g., Better Business Bureau, Charity Navigator)
- Consider getting identity-theft protection (e.g., fraud alerts, identity theft insurance).
- Shred your personal/financial information before disposing of them.