How to fight fraudsters: the psychology of scams

Ceri Stanaway
28 September 2018

Find out how to recognise – and overcome – the psychological tactics that scammers use, playing on insecurity and anxiety so they can get their hands on your money

We’re more likely to associate scams with criminality than psychology. Yet the most convincing cons often apply psychological influences which make us more likely to fall victim.

We all like to think we can spot scams, but any one of us could be vulnerable to tactics that break down our defences, particularly when we’re under financial or emotional pressure.

Phee Waterfield (see below) was targeted by a loan scam when she was short of funds. In her case, scammers tried to take advantage of financial anxiety at a time when her defences were low, and her judgement potentially impaired as a result.

Playing on anxiety is just one of many psychological tactics used by scammers. Some tactics were highlighted in leading psychologist Robert Cialdini’s 1984 book, Influence, and are widely used in legitimate marketing.

Here’s how criminals use psychological influences to encourage innocent savers to part with their money.

1. Authority

There’s a reason that many scam emails and calls claim to be from a bank or government body: we’re more likely to trust those in a position of authority.

Scammers may look to appear even more legitimate by spoofing a bank’s phone number and sending texts that insert themselves into an existing, genuine chain of texts from your bank.

Fraudsters may play on known banking issues – such as the recent TSB system problems – to increase authenticity.

Meanwhile, few followers of Money Saving Expert’s Martin Lewis will have missed his public outrage at the fraudulent use of his name to promote Bitcoin scams.

2. Scarcity

The threat of scarcity, commonly used in investment scams, makes something seem more desirable. Scammers will warn that potential investments are in short supply, and that you’ll miss out if you don’t act quickly.

It can be even more effective if the investment is in something that few understand, such as Bitcoin and other cryptocurrencies.

3. Tit-for-tat

Otherwise known as ‘reciprocity’, this appeals to our sense of obligation. If someone does something for us, we feel obliged to repay the good deed.

If we initially hesitate to respond to a fraudulent offer from a cold caller, for example, the scammer may offer to sweeten the deal especially for us.

They will do this by using emotive language to make it seem as though they’re doing us a favour, which may make us feel obliged to accept their offer.

4. Consistency

Most of us are creatures of habit, and like to act in a way that’s consistent with our previous behaviour. Fraudsters may take advantage by starting off with a small, reasonable request or suggestion. For example, a bogus tradesman cold calling at your door might initially propose a minor, inexpensive repair to a roof or driveway (something they might see from the road).

Inevitably, in the course of the small repair, they’ll uncover something bigger (and costlier) and will hope that you agree to this piece of work, based on your existing relationship.

5. A friendly voice

We’re more likely to respond to people we like. Whether in person or by phone or email, scammers will often use language that presents them as helpful and friendly.

This principle may have also contributed to the rise of social media scams, such as a recent Royal Wedding scam that did the rounds on Twitter and Facebook.

The scam asked a series of questions which, combined, would form your ‘Royal Wedding guest name’. Presented as a bit of fun, in reality answering the questions would have given away lots of personal information, including the street where you live and your pet’s name (a common bank security question).

Quizzes like these encourage sharing, so you might unwittingly pass on a scam to friends and family, who may be more likely to respond because it’s come from you – someone they like.

6. Emotional triggers

Many scams are designed to stir up emotional, instinctive reactions. Scammers hope that a surge of excitement or fear will override our rational thinking. Lottery scams fairly obviously try to make use of the gush of anticipation around potential winnings.

Threats to our security can also short-circuit good judgement. Many scams take advantage of fears around digital security, especially for those less confident with technology.

Sue Smith*, from Cumbria, was lucky to avoid being scammed when she received a call claiming to be from a Microsoft technician.

The ‘technician’ claimed there was a problem with her computer, and that they could sort it out if she let them access her computer remotely. Fortunately, Sues wasn’t able to complete the steps they asked her to take to give them access, and they gave up. If she’d let them in, the scammer would likely have installed their own malware and demanded a fee for their ‘fix’.


You can also join the fight against scams at – an initiative that aims to empower communities to help protect and prevent people from becoming victims of scams.

Get scam smart

When it comes to scams, prevention is better than the cure. Awareness of obvious giveaways, such as spelling mistakes and poor grammar, or the scammer not knowing your name, is no longer enough. Overconfidence that we can spot a scam can even be a disadvantage, as it might make us more likely to fall for less obvious scams.

These days, scammers will use every resource at their disposal – including information that’s publicly available on the internet, as well as more underhand tactics – to find out our personal details.

Stephen Lea, emeritus professor of psychology at Exeter University, has spent many years researching the psychology of scams. He describes them as an extreme and malicious form of marketing. He regularly sees the psychological tactics outlined above in his research. He has also found that many scammers urge secrecy on their targets, perhaps discouraging them from discussing the venture with anyone who might be (supposedly) more financially astute.

Professor Lea’s advice is: “If you would feel uncomfortable talking about a financial opportunity with your spouse, children or peers, then it’s dodgy – don’t go near it.”

His research found that once a scammer knows a bit about you, they will craft their approach accordingly, attempting to build up a relationship.

In a recent study, his team responded to scam emails, posing as people of different ages and genders. He found that scammers were more likely to try to bamboozle people they thought were older and female with technical scams than those who presented as young males.

Targeting the vulnerable

Certain people will be particularly vulnerable, such as those who live alone and have no one to talk things through with, or those who have recently suffered a life trauma – a bereavement or a divorce. Those who have responded to a scam previously are more likely to be targeted and, one academic study found, are more likely to respond again.

Louise Baxter-Scott, National Trading Standards’ scams team leader, notes that scammers prey on people’s loneliness and need for social contact.

“We often see scammers befriending people. They’ll look to give people a sense of purpose, making them feel valued and as if they are the only one who has received such a wonderful offer. We have often heard victims refer to scammers as friends,” she explains.

Watch out for unsolicited calls, visits, emails and offers that seem too good to be true – even if they appear to have come from an authoritative source who appears to know lots about you. Don’t click on links or open attachments within unsolicited emails, and be careful not to give away sensitive personal or financial details. Also, never agree to send money following a call, visit, email or text that you can’t verify as genuine.

Fewer than 5% of scams are reported to the authorities. Yet scams are crimes. You wouldn’t feel embarrassed, or hesitate to report it if a thief stole your wallet. You shouldn’t feel differently if you are scammed. Tell Action Fraud (visit or call 0300 123 2040), and your bank if you’ve been defrauded.

“Scammers thought I would be desperate”

Phee Waterfield (pictured), 29 from East Yorkshire, is founder of The Calm Room, a company she set up to help people with mental health issues to access the services they need. When Phee first set up her business, she struggled to get a loan to fund her website. She searched on a price comparison site, and about a day later a company called offering her a loan at a rate that turned out to be too good to be true.

Fortunately, Phee was suspicious and did some research. She realised it was a scam and reported the company to the financial watchdog. But anyone more desperate for a loan may have been taken in.

She says: “My key concern was how they got my details. It was scary because I had obviously been targeted, based on my credit score and they thought I would be desperate. It was clearly their drive and aim to take money from already vulnerable people.”

*Name has been changed.

Have you come across a scam we should alert other readers to? Email us at

CERI STANAWAY is a personal finance writer and former investigative journalist at consumer group Which?

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