More Cognitive Biases
This article is part of SCARS continuing commitment to helping the victims of scams (financial fraudFraud In law, fraud is intentional deception to secure unfair or unlawful gain (money or other assets), or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements. A fraud can also be a hoax, which is a distinct concept that involves deliberate deception without the intention of gain or of materially damaging or depriving a victim.) to better understand the psychology of scams. In other words, why are victims vulnerable?
How Do Cognitive Biases Make People Vulnerable To Scams, Fraud, and Deception
How do cognitive biases play a role in making people vulnerable and susceptible to scams, fraud, and deception?
Cognitive biases are mental shortcuts that allow people to make quick decisions and judgments based on their past experiences and memories. These biases can be helpful in many situations, as they allow people to process large amounts of information quickly and efficiently. However, they can also make people vulnerable to scams, fraud, and deception.
One reason why cognitive biases make people vulnerable to scams is that they can lead people to make judgments that are not based on evidence or logical reasoning. For example, Confirmation Bias (a major bias that makes people vulnerable) is the tendency to seek out and interpret information that supports one’s preexisting beliefs, while ignoring or dismissing information that contradicts them. This can make people more susceptible to scams that appeal to their beliefs or biases, as they are more likely to believe the scammerScammer A Scammer or Fraudster is someone that engages in deception to obtain money or achieve another objective. They are criminals that attempt to deceive a victim into sending more or performing some other activity that benefits the scammer.’s claims without critically evaluating the evidence.
There are several ways that people can protect themselves from scams, fraud, and deception. One way is to be aware of common cognitive biases and how they can affect decision-making. This can help people to be more mindful of their thought processes and to question their own judgments.
Another way to protect oneself is to be skeptical of claims and offers that seem too good to be true. It is important to carefully evaluate the evidence and to ask questions before making a decision. This can help people to avoid falling for scams that rely on emotional appeals or incomplete information.
It can also be helpful to seek out additional sources of information and to consult with trusted friends, family members, or professionals before making a decision. This can provide a more balanced perspective and help to identify any potential red flags.
Overall, cognitive biases can make people vulnerable to scams, fraud, and deception by leading them to make judgments that are not based on evidence or logical reasoning, and by causing them to make irrational or risky decisions. However, by being aware of these biases and taking steps to protect oneself, people can reduce their risk of falling victim to these types of scams.
Sunk Cost Bias or Chasing The Money
One cognitive bias that can make people vulnerable to scams is the “Sunk Cost Bias” (also called “chasing the money”). This bias occurs when people continue to invest time, money, or other resources into something because they have already invested a lot into it and don’t want to feel like that investment was wasted.
This can make people more likely to fall for scams that promise high returns or to continue giving money to someone who is scamming them because they don’t want to accept that they have been duped.
Availability HeuristicAvailability heuristic This cognitive bias is placing greater value on information that comes to your mind quickly. You give greater credence to this information and tend to overestimate the probability and likelihood of similar things happening in the future. Bias
The Availability Heuristic is another cognitive bias that can make people more vulnerable to scams. This bias occurs when people make judgments based on information that is easily available to them rather than considering all of the available evidence. For example, if someone is considering investing in a company and only looks at information that is readily available on the company’s website, they might not be getting a complete picture of the company’s financial health.
This could make them more likely to fall for a scamScam A Scam is a confidence trick - a crime - is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. if the scammer has provided misleading or false information on the website. Which of course, they do!
This bias helps Pig ButcheringPig Butchering Sha Zhu Pan 殺主盤 “Pig Butchering” This is a scam type that originated in China involving the scammer developing a relationship with the victim - sometimes romantic sometimes not - and leading the victim to invest in a fake company or asset. These typically target smart younger women. scammers defraud their victims. The scammers show their website or their app and lock the victim into relying only on their information.
Anchoring BiasAnchoring bias This cognitive bias is the tendency to rely too heavily on the very first piece of information you learn. For example, if you learn the average price for a car is a certain value, you will think any amount below that is a good deal, perhaps not searching for better deals. You can use this bias to set the expectations of others by putting the first information on the table for consideration.
Finally, the Anchoring Bias can make people more susceptible to scams. This bias occurs when people rely too heavily on the first piece of information they receive and anchor their decisions to it. For example, if someone is offered a product at a high initial price and then offered a discount, they might be more likely to purchase the product because they are anchored to the high initial price. This can make them more vulnerable to scams if the initial price is inflated and the final price is still more than the product is worth.
The anchoring effect causes an individual’s decisions to be influenced by a particular reference point or ‘anchor’.
Both numeric and non-numeric anchoring have been reported in research (meaning numeric/numbers, text-written information, and even visuals – images & video).
In numeric anchoring, once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor. For example, an individual may be more likely to purchase a car if it is placed alongside a more expensive model (the anchor). Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer, even if said prices are still relatively higher than the actual market value of the car.
Another example may be when estimating the orbit of Mars, one might start with the Earth’s orbit (365 days) and then adjust upward until they reach a value that seems reasonable (usually less than 687 days, the correct answer).
In other words, it is a bias that shows up in comparison. You shift your answer one way or the other based on what you are comparing it to. Often excluding information because it was not what you found first.
Summary
Cognitive biases do make people more vulnerable to scams, fraud, and deception by causing them to ignore warning signs, pay more attention to information that supports their preexisting beliefs, rely on incomplete information, and anchor their decisions to easy and often incorrect information.
By being aware of these biases and making an effort to overcome them, people can be better equipped to avoid falling victim to scams and other forms of deception.
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This program is designed to help scam victims struggling to recover on their own and for those who want to understand the overall process. You can be using other resources, such as traumaTrauma Emotional and psychological trauma is the result of extraordinarily stressful events that shatter your sense of security, making you feel helpless in a dangerous world. Psychological trauma can leave you struggling with upsetting emotions, memories, and anxiety that won’t go away. It can also leave you feeling numb, disconnected, and unable to trust other people. Traumatic experiences often involve a threat to life or safety or other emotional shocks, but any situation that leaves you feeling overwhelmed and isolated can result in trauma, even if it doesn’t involve physical harm. It’s not the objective circumstances that determine whether an event is traumatic, but your subjective emotional experience of the event. The more frightened and helpless you feel, the more likely you are to be traumatized. Trauma requires treatment, either through counseling or therapy or through trauma-oriented support programs, such as those offered by SCARS. counselingCounseling Counseling is the professional guidance of the individual by utilizing psychological methods especially in collecting case history data, using various techniques of the personal interview, and testing interests and aptitudes. A mental health counselor (MHC), or counselor, is a person who works with individuals and groups to promote optimum mental and emotional health. Such persons may help individuals deal with issues associated with addiction and substance abuse; family, parenting, and marital problems; stress management; self-esteem; and aging. They may also work with "Social Workers", "Psychiatrists", and "Psychologists". SCARS does not provide mental health counseling. or therapy, qualified support groupsSupport Groups In a support group, members provide each other with various types of help, usually nonprofessional and nonmaterial, for a particular shared, usually burdensome, characteristic, such as romance scams. Members with the same issues can come together for sharing coping strategies, to feel more empowered and for a sense of community. The help may take the form of providing and evaluating relevant information, relating personal experiences, listening to and accepting others' experiences, providing sympathetic understanding and establishing social networks. A support group may also work to inform the public or engage in advocacy. They can be supervised or not. SCARS support groups are moderated by the SCARS Team and or volunteers., or completely independent – on your own!
The SCARS Steps program is a complete program and is provided for the purpose of helping scam victims to overcome this experience. Throughout this SCARS Steps Program, we speak about issues and challenges that a victim may have and help guide them through their recovery. But each person is different and it is important to understand your own reasons for being vulnerable to being scammed.
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The SCARS Slate Book should be purchased by family and friends to better understand what happened to the victim and the traumatic impact on them. But it can also be shared by the victim so that they do not have to explain to family and friends about the scam. This publication is to help others to help Scam Victims to make it through this traumatic experience and recover.
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As we have seen, money recovery/repayment programs can become available years after the scam ends and you need to keep all the details of this crime in case it is needed. We have also seen scammers being extradited to the U.S. and other countries, this will help in the event you testify or give statements, Additionally, this helps you have your information ready to qualify for victims’ benefits, compensation, or aid.
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