How Scammers Exploit Psychology: Protecting Yourself from Manipulation

It’s easy to stereotype the kind of people you think would fall for a scam. But scammers know what they’re doing – and what they’re doing is using basic human emotions and desires against us. The principles of psychology behind scams means that all of us are vulnerable. When scammers are exploiting our own brains, nobody is immune.

See Scams Exploiting Emotions with Alan Castel for a complete transcript of the Easy Prey podcast episode.

Alan Castel is a professor of cognitive psychology at the University of California Los Angeles. His primary areas of study are memory, how memory changes with age, and how various factors make us vulnerable to scams and fraud. He first became interested in this topic when interacting with his grandparents. They sometimes confused his name with his brother’s, but they still could remember how much they paid for gas and groceries. He was curious in how the changes with their memories worked. He also did a lot of memorization personally to get through school. Even though his memory wasn’t that great, he made up mnemonics, rhymes, and images to help him remember things like the entire periodic table.

When he took a psychology course during his first year of college, it opened up a world of options. Some experimental psychologists were exploring how we learn and remember and why we forget. Alan was hooked. He found it fascinating to study how memory works, how false memories happen, and how we don’t always remember things the way we think we will. In addition, he studies the malleability of memory and how it changes with age. He recently published a book covering a variety of these talks, called Better with Age: The Psychology of Successful Aging.

How Aging Affects Scam Vulnerability

There’s a stereotype that older adults are gullible, lonely, and more prone to fall for scams. But the truth is that there’s a scam out there for anyone. And because of the psychological principles they exploit, we’re all vulnerable.

Broadly speaking, we’re all susceptible to scams.

Alan Castel

Generally, scams are not targeting particular groups of people, whether that’s you, Alan, or the elderly. Scammers are going after a broad group with a broad scam. They work on numbers. To be profitable, they need a lot of victims, and to get more victims, they need to target everyone everywhere of every age. There are also scams targeted to groups with specific vulnerabilities. Catfishing, for example, is more likely to target someone who’s lonely and looking for love than someone who’s happily married.

With older adults, the problems come more on the reporting side. A lot of older adults won’t report that they were scammed because they’re ashamed. They also may be afraid that admitting it might cause their children to decide they’re not competent to handle their own finances anymore and take away their autonomy.

Scams are extremely under-reported, and that’s part of the stigma. Everyone should be aware that it happens to everyone – lonely people, smart people, and even very aware people. It could happen to you or Alan or anyone on any given day. It’s not something that we should be ashamed of. If it happened (or almost happened) to you, you should tell people. The more we talk about it, the more other people will be aware that it’s happening.

The Psychology Behind Shame and Scams

The psychology behind scams preys on our basic emotions. It’s human nature to connect, to seek to gain something, and to try to understand the world. Everyone is in a position to want to make money and to be curious. But a lot of those things have dark sides, and scammers can exploit our natural feelings.

Scams focus on our human nature of trying to make sense of the world and our emotional brain.

Alan Castel

When it happens to us, we wonder how it could happen. It started out friendly, and we thought we knew the person. We often think that it could only have happened to us. It was our fault because we kept talking or did this or that. But scammers target things we’re all vulnerable to. One recent case targeted therapists: Scammers called therapists and said that they missed jury duty and that could get their therapist license revoked. If they lose their license, they lose their livelihood, so they’re immediately concerned. When the scammer seems helpful and offers a solution, following their advice seems like the best solution.

Another basic property of the human brain is that we’re always trying to solve puzzles and find solutions. Therapists are generally intelligent people used to helping their clients talk through problems and find solutions. And as social beings, humans often assume that people offering help genuinely want to help. The psychology behind this scam is tailor-made to target the vulnerabilities of even smart, aware people.

Smart People Fall For Scams

The stereotype is that people who fall for scams aren’t smart. But the evidence doesn’t show that. Formal education isn’t always a measure of intelligence, but if you study people with high levels of formal education, the evidence is interesting. They are often prone to scams because they use logic to rationalize the situation. If they get invited to a presentation for a timeshare in Mexico, for example, they might rationalize that they were selected because they visit Mexico frequently. This makes them more likely to buy in than they would be if they assumed they were just one of thousands on a mass invitation list.

Oftentimes people who have a high degree of formal education are very prone to scams.

Alan Castel

Scammers are often well-prepared. They have good data, and they know your profile. Especially if you’re not aware of how they got it, it might seem like you are specially-selected. Intelligent people can also get snared because they rationalize something that is too good to be true. If they see the perfect rental property available online, they may rationalize away the red flags because they don’t want the opportunity to go away.

Some people think they’re too smart for scammers and try to stay on the phone and waste their time. But Alan always advises caution with that. Some scammers measure how long you’re on the phone and sell that data. Just staying on the phone can get you marked as a person who could be interested but just didn’t fall for it this time. It could also indicate loneliness, which scammers could see as vulnerability to other scams.

Using Current Events to Target Smart People

Last year, there was a lot of discussion around student loan forgiveness. When loan repayments resumed, a lot of people felt financially pinched. Someone who has student loans may hear about all of this, and then get a phone call relevant to what they heard on the news. They want to listen because they are interested in getting their student loans reduced or forgiven.

In some of these, the scammers ask for some information to “make sure their file is correct.” When people provide that information, the scammers can then steal their identity. Sometimes the victims don’t even make the connection on how it happened. And these are smart people, and often educated people, too.

The numbers show that young people actually fall for scams more often, but the dollar amounts are much smaller. Older people are less likely to fall for it, but they lose more. The psychology behind scams is the same, and it targets everyone. Older people just generally have more wealth to lose. The stereotype is that older adults lose more because they don’t understand tech, but that’s not necessarily the case. The right scams can find you. All of us are vulnerable.

The stereotype that we have is that they’re older adults who might not understand technology … it’s actually all of us. The right scam can certainly find you.

Alan Castel

How Awareness can Help

Scam awareness can come from reading about it, hearing it on the news, or from someone you know talking about something that happened or almost happened to them. But one of the research areas that Alan is interested in exploring is how the psychology behind scams expands to scam awareness. When someone shares with us about a scam, we’re on the outside and can easily spot the signs. So we assume we would never fall for it. But scammers work hard to get us in an emotional state where we overlook or rationalize away those warning signs.

It’s the curse of knowledge. When you hear about a scam … you think, “That seems like a good scam, but I wouldn’t have gone for it.” But you’re not in that emotional state.

Alan Castel

Something more helpful than just awareness is trying to get into the emotional state a little bit. You just heard about a situation where someone was scammed or almost scammed. How would you feel if that happened to you? You might think you would be frustrated, embarrassed, confused, or ashamed. By thinking about those emotions, people can start to recognize that it can happen to them, too.

Scams are dynamic. Just because you learned about a scam a few months ago doesn’t mean that’s the scam that’s going to target you in a few months. It might be a variation, or it might be a whole new scam. Scammers keep up with news, with trends, and with what people are trying to be aware of. But the psychology behind scams doesn’t change. They are fast-paced and keep up with current events, but they still prey on basic emotional needs. It can be hard to keep up, but knowing the psychology behind scams can help.

Protecting Yourself from Scams

It’s hard to be completely inoculated from scams because they’re always changing and the psychology behind scams is fundamental to human nature. But there are a few things you can watch for.

The first is contact. When Alan was younger, sometimes his grandparents would get a call, listen for a moment, and just hang up. Then, he thought it was rude. But now he understands. Scammers want to get in contact with you. It’s important to be suspicious of that. If the IRS calls, they’re notoriously hard to get in touch with, so it’s time to be critical. This is even more prevalent with AI letting scammers create voices to call you with.

Another factor is being careful of what you share on social media. What you’re sharing is going to be used by scammers. A common scam finds young people who have posted online about traveling and calling their parent or grandparent, claiming they’re in trouble and need money. With AI, they could even use social media videos to fake the traveler’s voice. It sounds like your grandchild, the caller knows their name and where they were traveling, and so it sounds legitimate to many victims.

What you’re sharing online is going to be used by scammers.

Alan Castel

Overcoming Shame to Talk About Scams

Sometimes people are concerned about talking to their family or friends about scams. But that’s the first step. Being open helps people understand that it can happen to anyone. Alan does this in his classes at UCLA. He shares about a particular scam, and inevitably hands go up. People say that same thing happened to their father or their in-laws. Eventually, they start saying it happened to them. The first step is acknowledging that it can happen to anyone. It can because the psychology behind scams preys on our basic nature.

[Getting scammed] can happen to anyone. It happens to smart people. It happens to people who are really focused …. It’s preying on our very basic nature.

Alan Castel

Alan has nearly been a victim to many scams. He also has been a victim himself by entering his credit card information on sketchy websites. It was usually because he had been hunting for something for a long time and finally found it at a good price. Every time he canceled his card and experienced the shame and guilt of doing something that seemed very stupid in retrospect.

In many ways, scammers are amateur psychologists. They’re not doing research, publishing papers, and making discoveries. But they are applying simple psychological principles in everyday life. Unfortunately, they are using psychology to commit scams and steal people’s money.

The Principles of Psychology Behind Scams

It’s hard to stay an expert in the field of scams because it’s always changing. But the psychology behind scams comes down to a lot of basic psychological principles. Alan tries to remind people we’re all human, and we all have drives to connect and be curious.

Every time he sees a new scam, Alan can see it works because of the principles behind it. Many scams are just variations on a theme. Yes, that may be using cryptocurrency now, but before that it was the same thing with mail order catalogs.

Scammers work on volume. … They only need a few responses to make money.

Alan Castel

Technology has made scams more accessible, but it didn’t start them. Before the internet, they were done by phone, and before that through the mail. What tech has done is accelerate it. Scamming is a numbers game, and technology makes those numbers easier. In the past, if they needed information for a scam, they would have to hack or social engineer something. Now much of it is on social media for the taking. Technology has drastically increased the number of calls they can make in a day.

Scams and Trust

Trust is going to be a big issues in the psychology aspect of scams. They are trying to put you in an emotional position where you have to question who you can trust. When we talk about how a scam happened, the recollection doesn’t always match what happened. We remember selectively, and sometimes that makes us look better or worse, but more often it focuses on our feelings. At some point, something doesn’t seem right. At what point? How did we not know initially?

Sometimes people get into analytic mode. They are thinking about how to fix the problem using the available tools. And this person seems to be helping, so they trust them. It can lead to a lot of trouble.

Humans like to cooperate initially. It’s simple social psychology, like the foot-in-the-door technique. Someone asks you how you are, or if it’s raining, and as soon as you respond, you’re establishing a relationship. Even though it’s not a deep relationship, you’ve answered a few questions. You feel like you’re helping them or they’re helping you. That’s how it starts.

That’s why Alan says it’s always best to just hang up the phone. Engaging with scammers can be entertaining, but the psychology behind scams can make it dangerous. At it’s core, it’s the same principle as sales and marketing. You want the other person to feel good and get something out of it. But scams go down a much darker path and take advantage of you.

You can learn more about Alan Castel on his UCLA faculty webpage. His book, Better With Age: The Psychology of Successful Aging talks about how to keep your brain sharp and active, and it can be found wherever books are sold.