The Psychology of Fraud

“The natural assumption was that old people and kids get taken advantage of by scam artists. But it's really the people who like to shop online a great deal. They should proceed with more caution.”-Rob Janes

GeekPress.com sites an article by “Schneier on Security” which summarizes a paper about the Psychology of Being Scammed by the University of Cambridge Computer Laboratory.

The distraction principle. While you are distracted by what retains your interest, hustlers can do anything to you and you won't notice.

- Scammers often work in pairs. One may "accidentally" bump you while another picks your pocket or spill something on you and apologizing while your pocket is picked.

The social compliance principle. Society trains people not to question authority. Hustlers exploit this "suspension of suspiciousness" to make you do what they want.

- One trait of a good con artist is confidence; they radiate trustfulness. I had a brother-in-law who was a pro at this and gained the sympathy of people and organizations. Do not trust anyone who knocks on your door without an ID badge. If in doubt call the police or company they represent to verify the employee.

The herd principle. Even suspicious marks will let their guard down when everyone next to them appears to share the same risks. Safety in numbers? Not if they're all conspiring against you.

- This is a common trick with shell game operators and crooked poker games. You see someone else winning and they share their secret – watch for the tick in his eye when he bluffs. But it’s all a lie and the winner is part of the scam too.
- This is also a common problem on chat rooms and online comments. The person spinning a tale of good or bad may be working for the product’s company or against it. Many Amazon reviews are tainted this way.

The dishonesty principle. Anything illegal you do will be used against you by the fraudster, making it harder for you to seek help once you realize you've been had.

- A favorite trick of the KGB. They catch a US diplomat or serviceman in an affair (the woman is working for the KGB too) or drugs or discover his “Gay” secret, etc and then use this information as blackmail. Or you accept a small “innocent” bribe but they then leverage it to bigger things under the threat of exposure.

The deception principle. Things and people are not what they seem. Hustlers know how to manipulate you to make you believe that they are.

- Watch the classic movie “The Sting” for how elaborate this can get with fake businesses and fake police. Most of the Nigerian email scams rely on making you think there is a large sum of money that you can help someone acquire for a modest reward. People of all ages have been fooled and some continue to insist that the scammer really is an innocent person in need even after they've been defrauded.

The need and greed principle. Your needs and desires make you vulnerable. Once hustlers know what you really want, they can easily manipulate you.

- Drug dealers and websites exploit this – especially pornography. They offer multiple teasers and then require money (or more money) to go beyond to the next level. There are online games which are free to play but the “best” armor, potions, faster experience gaining, fastest movement or teleporting are only available for modest fees.

Bottom Line
The paper also discusses a dozen con scenarios, which are both informative (and entertaining).