The Psychology of Fraud

What makes this AARP video about fraud compelling is that a few brave seniors were willing to discuss how they were cheated out of a few thousand dollars, $20,000, even $300,000.

With the baby boom population aging at the same time that the Internet has become a haven for hackers, scammers, and invasions of privacy, experts predict that the incidence of online and other fraud against the elderly will continue to increase in coming years. Some researchers have begun to explore the topic of fraud and aging, with one recent study showing that people become more vulnerable to fraud as they age and experience natural cognitive decline.

The seniors’ testimonials in the video, produced by the AARP Fraud Watch Network, demonstrate how con artists’ strategies tap into our deepest emotional needs.  “These tactics are so powerful, and [scammers] use them with such intensity that it is difficult to say ‘no,’ ” said Anthony Pratkanis, a psychology professor at the University of California, Santa Cruz.

Pratkanis explains four psychological strategies that con artists use to lure people into surrendering their money:

• Phantom fixation: a fixation on a sudden windfall.
• Social proof: if other people are doing it, it must be good.
• Authority: the person selling the purported money-making venture is highly knowledgeable.
• Scarcity: there is limited time to snare this one-time offer.