ONYX

Scams

Every year, the Federal Trade Commission (FTC) issues a report on the top scams of the year based on the number of complaints filed to the FTC and the National Consumer’s League. Last year there were 635,000 complaints filed and reported losses were $547 million.

And each year, the same frauds top the list. Among online frauds, internet auctions are number one, with online shopping/catalog sales, internet-access scams, and foreign money offers top the list. A certain fraud may move around on the list – the Nigerian scam was #5 in 2003 and #4 last year – and other scams keep showing up, year after year.

Although new technology makes new scams possible, in general con artists aren’t that creative. They don’t have to be! The same tricks work over and over again. Why?

According to studies, con artists use “social influence” tactics, and once you’ve learned to recognize them, the less likely you are to fall for one of them. There are usually four steps to pulling off a scam:

1. The con lures you with something tempting.
2. He/she tries to gain your trust.
3. They sweeten the pot to make you really consider biting.
4. They close the deal.

To do so, a con will use any number of strategies at each of these steps. Initially, the scammer will generally use “phantom fixation” – the promise of something attractive that never materializes. The Nigerian scam is a good example of this. In exchange for the use of your bank account to move funds out of another country, you’re told you’ll receive millions of dollars. People become so distracted by the notion of instant wealth that they throw their usual caution to the wind. The scam is closed when you fork over money for “incidental fees” to move the money to their account or divulge private bank account information that can be used to move money out of your account.

To gain your trust, scammers will often use what is referred to as “command of authority”, and that your help is desperately needed. The Nigerian scam uses both of these. The scam is in the form of a personal plea for help, often from a supposed former high-ranking official, or his family, with a foreign government. The official-sounding titles and ranks sprinkled throughout the message are meant to make the scam look legitimate.

And the plea for your help is more than an appeal to your conscience. It’s meant to give you the feeling that you’re in control of the situation and can walk away at any time. Other tactics used to gain your trust include friendly persuasion, and the “expert snare” where the con artist tries to make you feel like an expert who should be able to recognize a great opportunity when you see one.

Making a scam appear too good to pass up is critical. There are five tactics generally used here:

• Creating The Landscape: A scammer will try to limit your use of outside information to investigate the scam. Some victims are told they’re being given a secret opportunity that would be in jeopardy if others found out. It is often easy to find out. One way is to check with the hoax- and myth-busting site Snopes.com.
• Comparison: One example is when an old price is scratched out and a new one is listed, so that you can clearly see the “deal” you’re getting.
• Self-generated persuasion: This may be a softer sell than some other tactics; the scammer plants an idea, but lets you use your own imagination to fill in the gaps. One con artist told his victim to picture everything he would do with a large sum of money – and would contact him in a week to hear the ideas. That week was plenty of time for the thought of all that money to take hold of the victim’s imagination.
• Scarcity: When we think something is scarce, most of us automatically think (a) if it’s rare, it must be valuable; (b) it creates a panic-type process, if I don’t get it now, I may never get it; and (c) it makes you special for owning it.

By the time a scammer is ready to close the deal, he or she may try to take advantage of your sense of fair play – if he’s done something for you, you should do something for him. He may even create a feeling of obligation in you, the victim. And if you’re still not biting, many con artists may resort to fear and intimidation in the form of personal insults or – if you don’t do this, this is what will happen – threats.

These strategies work because we’re used to them – many honest businesses successfully use them. Click on any home-shopping channel on TV, and you’ll see many tactics working, such as scarcity, social proof, and comparison to sell their products – all perfectly legitimate sales methods. The difference with scammers, though, is that they are using outright deception to draw you in.

If you feel you have are being or have been conned over the internet, The Internet Fraud Complaint Center (IFCC) is a partnership between the FBI and the National White Collar Crime Center. The IFCC’s mission is to address fraud committed over the Internet. To file a complaint, you can go to their web site at ifccfbi.gov. It is important that you keep any evidence you may have related to your complaint, such as canceled checks, credit card receipts, phone bills, a printed copy of a web site, chat room, etc.

To report any other type of scam, i.e., telemarketing, work at home, etc., go to www.consumer.gov/sentinel, call toll-free at 1-877-FTC-HELP (382-4357) or write to the Consumer Sentinel Project, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.