I’m just reading a fascinating report on the psychology of why people fall for scams, commissioned by the UK government’s Office of Fair Trading and created by Exeter University’s psychology department.

It’s a 260 page monster, so is not exactly bed time reading, but was drawn from in-depth interviews from scam victims, examination of scam material, two questionnaire studies and a behavioural experiment.

Here’s some of the punchlines grabbed from the executive summary. The report concluded that the most successful scams involve:

Appeals to trust and authority: people tend to obey authorities so scammers use, and victims fall for, cues that make the offer look like a legitimate one being made by a reliable official institution or established reputable business. Visceral triggers: scams exploit basic human desires and needs ‚Äì such as greed, fear, avoidance of physical pain, or the desire to be liked ‚Äì in order to provoke intuitive reactions and reduce the motivation of people to process the content of the scam message deeply. Scarcity cues. Scams are often personalised to create the impression that the offer is unique to the recipient. Induction of behavioural commitment. Scammers ask their potential victims to make small steps of compliance to draw them in, and thereby cause victims to feel committed to continue sending money. The disproportionate relation between the size of the alleged reward and the cost of trying to obtain it. Scam victims are led to focus on the alleged big prize or reward in comparison to the relatively small amount of money they have to send in order to obtain their windfall. Lack of emotional control. Compared to non-victims, scam victims report being less able to regulate and resist emotions associated with scam offers. They seem to be unduly open to persuasion, or perhaps unduly undiscriminating about who they allow to persuade them.

And here’s a couple of counter-intuitive kickers:

Scam victims often have better than average background knowledge in the area of the scam content. For example, it seems that people with experience of playing legitimate prize draws and lotteries are more likely to fall for a scam in this area than people with less knowledge and experience in this field. This also applies to those with some knowledge of investments. Such knowledge can increase rather than decrease the risk of becoming a victim. Scam victims report that they put more cognitive effort into analysing scam content than non-victims. This contradicts the intuitive suggestion that people fall victim to scams because they invest too little cognitive energy in investigating their content, and thus overlook potential information that might betray the scam.

Interesting, people who fall for scams often have a feeling that it’s dodgy. The report suggests we trust our gut instincts. If it seems too good to be true, it probably is.

We like to think that only other people fall for scams, but as I’m working my way through the report it’s becoming clear that those things that we think make us resistant to scams (a keen analytical mind) are not what help us avoid being a victim.

A really fascinating read and a great example of applied psychology.

Link to Office of Fair Trading report page and download.