I’ve spent 20 years interviewing thousands of people who’ve fallen for scams and ripoffs. I’ve interviewed hundreds of criminals, too, not to mention pseudo-criminals who work at corporations that survive almost entirely on their ability to fool people. I’m frequently asked: what makes people fall for scams? What makes someone a good “mark”? While I worked at NBC, I was always reluctant to give clear opinions on such things. Now that I’m an independent journalist, I feel more free to speak out. I have plenty of strong opinions on this one.
But before I tell you what’s wrong with the tired old saw, “If it seems too good to be true, it is,” let me get this out of the way: I hate people who blame the victim. Yes, consumers can be dumb, foolish, and even greedy. None of these things should ever be construed as permission to steal from them. These are the kinds of excuses you hear from criminals and corporations all the time, and I hate them. It’s always clear who the bad guy is: The guy who walks away with the money. The test is easy: Any time you take someone’s money and that person is confused about why, you are wrong. Give the money back.
That said, there are plenty of reasons people fall for criminals and corporate ripoffs. I offer this list not so you might feel superior, or (Heaven’ forbid) feel justified, but rather so that you might be open-minded enough to see a little of yourself in this list, and avoid the kind of momentary lapse of reason that could get you in trouble.
1. Intelligence isn’t a universal skill.
By that, I don’t mean it’s not spread unevenly around the world. I mean it’s spread unevenly around our lives. We are smart about some things, dumb about others. Maybe we program computers but can’t change the oil of our cars. Maybe we are great musicians but don’t know how to speak with 5 year olds. Such discrepancies can be surprisingly close, like the PhD’s in mathematics I know who are terrible with personal finance. There’s no one more dumb than someone who thinks they are universally smart. For our purposes, there’s no better mark than someone who thinks he can’t be outsmarted. If I had $1 for all the smart people who told me they’d just gotten a great deal on a new car, but who’d really been taken to the cleaners, I’d own a small island somewhere.
The irony here is that another reason people fall for scams is because they feel dumb. Among the more convincing lines criminals ever feed marks: “You don’t want to be the last person to know about this, do you? Everybody knows how to make 15 percent returns on investments. Everybody.”
2. A momentary lapse of reason
A related concept: Sometimes circumstances conspire to make a very smart person temporarily dumb. The Pink Floyd song One Slip describes the most classic example of a momentary lapse of reason: an ill-advised romp in the hay because…”What they hey?” As the song puts it: “Without a thought of the consequence/I gave into my decadence.” We do this all the time. We eat donuts late at night, we buy clothes we don’t need, we pay twice the price for something because we don’t feel like shopping around. Remember, you can be sensible 23 hours and 55 minutes a day, but a criminal only needs 5 bad minutes One Slip — to raid your bank account.
3. If it sounds too good to be true…it’s your own fault
Speaking of decadence: Virtually never have I interviewed someone who wired money to a criminal in London or re-mailed a stolen laptop to a credit card thief Mexico or emailed a password to a hacker in Romania who didn’t commit a crime in their own heart. The problem isn’t that it sounds too good to be true. The problem is that it sounds great! So great, we know deep inside its probably wrong. But we do it anyway because, most people have a little criminal in them. “Maybe I *can* earn $400 for five minutes work,” or “Maybe I can get free access to that porn site, or Maybe there is a way to lose 25 pounds in 5 minutes. When that inner thief is aroused, people become ok with doing something that almost certainly must involve stealing. Don’t agree? Think about Bernie Madoff’s clients. Did even a single one really believe he had a magic way to defy the laws of mathematics, and of the stock market? The proof of his crime was simple: He clients’ returns were impossible. They knew that. They thought it was ok…for them. Criminals, like good wrestlers, know turn such power against their marks.
4. Magical thinking
I once spent a long time interviewing a famous magician named The Amazing Randi, hoping for insight into the criminal mind. Randi was well-equipped to offer this. He was Johnny Carson’s magician, and later in life, spent a great amount of time debunking snake oil salesmen who stole money from people selling fake cures or mystic powers. Randi told me simply this: Since childhood, we are all trained to believe in magic. We want the dove to appear under his scarf. We want cards to appear out of our eardrums. Magicians, in particular, are not so good at pulling off tricks as they are finding people who believe in magic more than most. They feed off them. They use them. Criminals do this just as well.
5. Believing in blind faith
Speaking of things we’ve learned from childhood, the most depressing thing I’ve ever heard came from a long-time Dateline NBC producer who told me about one persistent theme in her jailhouse interviews: Criminals love targeting heavily religious people. Why? “They are trained to believe in things they cannot see,” she said. They are trained to make leaps of faith. So when it comes time to ask for another leap of faith — just give me this money and it will triple! these marks already know how to do it. Telemarketer criminals love hearing that the consumer they’ve dialed is religious — that’s part of the point of small talk. It’s also the reason many scammy advertisements hint at a religious affiliation. Religion also offers the power of pack mentality, providing a false but powerful third-party authentication that’s often a key element in crime. “Hey, this guy goes to my church, he must be ok,” is the implicit message. That’s the reason you see chain letters or pyramid schemes rip through church congregations (not to mention investment house schemes!)
6. Being rushed
Every criminal training manual (or sales manual) you ever read will hone in on this very important point: create a sense of urgency in the mark. Convince him or her that they must do something RIGHT NOW. That the opportunity will be gone in moments. Never let them walk out the door, or even talk to anyone outside the room. Trust me, the once-in-a-lifetime deal for a new car will become a twice-in-a-lifetime deal tomorrow. The surest sign that something is wrong in any deal is pressure. if I taught personal finance classes in U.S. high schools, I would skip all the boring lessons on U.S. bonds and teach one skill, over and over, just like the firemen taught us as little kids: Stop, drop and roll. Stop talking, drop the pen, and roll on out of that office, or roll the mouse away from the computer, until tomorrow when you’ve had time to sleep on it. Don’t even let someone back you into a corner. Ever. Even if they say your roof is leaking.
7. One more thing: Keep your anterior insula in shape
There is a special place in Hell for people who steal from older folks. Billions are taken from America’s elderly every year, both by scam artists and by corporations that specialize in scare tactics. The elderly are easy to scare, for sure, but more important, their brains seem to be physically less capable of screening out the untrustworthy. A UCLA professor used an fMRI machine to look at the brains of old and young people, and found that the anterior insula lit up less in older folks than younger folks. Thats the part which lights up if the brain perceives danger, or more specifically, if it perceives a person to be potentially dangerous. The researchers call it a diminished “gut” response. What does this mean for you? As you age, you almost certainly will fall for things that you didn’t when you were younger. So don’t be over-confident. And please, talk to your aging parents often about money, and be particularly alert to phony investment schemes and “loneliness” crimes like fake online love affairs.