People Can Spot a Scam After Seeing Fakes

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The old and the young are most susceptible to scammers using fake identities to extract money from their victims. People in their 50s who went to college are in the sweet spot and are much better at resisting them.

The question is how to prevent the vulnerable from falling prey to imposter scams, which account for a third of the dollars Americans report to the FTC they’ve lost in frauds every year. A new study finds that exposing people to a watered-down version of a scam they might see in the real world teaches them to recognize an actual scam that comes across the transom.

In the imposter scams that are the focus of this study, someone pretends to represent a trusted organization like the Social Security Administration, the Red Cross, or online retailer Amazon. The goal is to coax either money out of the victim or personal information that can be used to make money. Imposters arrive in many forms – phone calls, emails, or texts.

To educate the 1,000-plus people recruited to this study, the researchers assigned them to one of four different online training programs. The only training that worked was designed to effectively inoculate the participants against fraud by exposing them to simulated scams on an email platform.

After reading each email, they were asked to decide whether it was a fraudulent appeal under the guise of a trusted organization or a copy of a legitimate communication from the organization. To figure this out, they could inspect the source of the email or click on links.

One example of a legitimate Social Security email was “Need a replacement card?” One of the frauds that came from – the agency’s actual website is – asked the email’s recipient to “review your Social Security statement.”

After each email, the individuals were told whether it was from a legitimate organization or was designed to deceive, and then they were given tips on what to look for in the future. The entire training lasted less than five minutes. Days later, they were tested, and the inoculations significantly improved their ability to recognize a scam.

The three training sessions that did not work were static, requiring the participants to simply read information – advice about what to look for in an imposter scam, the existing materials that Social Security distributes to warn against scams, or generic information about Internet addiction, which was used solely as a basis for comparison. These individuals were also tested later on distinguishing the real communications from the scams.

However, the researchers said it’s unclear whether the inoculation training would have as much success if they had used texts rather than emails to lure people in. This is an open question, and an important one, because young adults are glued to their cell phones.

It would be interesting to see whether a follow-up experiment using a text-based training session would be an effective way to protect young adults.

To read this study, authored by Clifford Robb and Stephen Wendel, see “Assessing Vulnerability to Social Security Scams.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.