Scammers ‘socially engineer’ victims

17% increase in suspicious or scam-related activity

Any of us can fall victim to a scam. Scams are increasingly common and many people are caught out. They can be very distressing, and the impact is often emotional as well as financial. If you’ve been the victim of a scam, remember that you’re not alone

Increasingly, scammers are relying on our psychological biases to trick us into handing over important data, financial information and our money. There are a growing number of scams that are harder to identify, with scammers using increasingly complex psychological tactics to ‘socially engineer’ their victims into handing over personal data or money.

Would-be investors are vulnerable to manipulation from scammers when put under time pressure, promised greater returns on investments or contacted by what they think is an authority figure. Research highlights the psychological tricks that scammers use, as data shows a 17% rise in reported scams[1]. The data highlights that almost three-quarters of Britons have seen an increase in suspicious activity and of those who were scammed nearly four in ten (39%) didn’t report it.

Criminals carrying out scams usually apply pressure tactics, illusions of scarcity or pretending to be a trusted authority to ‘socially engineer’ their victims. The findings come as consumer polling shows that seven in ten Britons claim to have seen an increase in suspicious or scam-related activity, but almost a third of respondents (31%) admit they wouldn’t know what to do if they found themselves in that position.

Purchase scams
Purchase scams, where people buy goods online which don’t exist or never arrive, accounted for over half (53%) of reported scams – with an average value of £980.

Scammers create a perceived scarcity and therefore ‘value’ in what they are selling to motivate consumers to act quickly and not rely on their better judgment. This might be advertising something as a ‘one-time offer’, a limited edition price or availability, or rushing us into buying something that ‘has’ to be bought now – even if you’ve never seen the product in real life.

You should never be rushed; it’s always important to take the time to check before proceeding with a purchase. If it’s a big-ticket item like a car, unless you’re buying directly through a well-known brand, it’s good practice to see it in person before spending any money.

Impersonation scams
Over two-thirds of Britons (64%) would be more likely to comply with a request if they believed it was coming from an institution they knew, such as their bank, the police or even the NHS.

It’s not surprising, therefore, that scammers exploit this insight. In these situations, scammers will harness that sense of authority to instil fear in their victims – perhaps suggesting their bank account has been compromised, a payment is overdue or that they will be fined if they do not pay the full amount. Psychologically, many of us will take these at face-value if they’re coming from what we believe to be a reputable institution.

Real phone calls from a bank will never ask customers to do things like share their PIN/security information or to transfer money to a ‘safe account’.

Investment scams
Investment scams often account for the highest average value type of scam, which is why they’re such enticing options for fraudsters – with £15,788 lost on average to these types of scams in the last quarter.

Investing should generally be a very measured activity and people who are looking to invest their money will often do a lot of research before making their decision, or at least ask for a second opinion. However, scammers are experts at exploiting the fact that people want to grow their assets, and that we can sometimes put our better judgement aside for a high return opportunity.

Worryingly, this is reflected in the research, with three in ten (32%) admitting they would be willing to go with an investment or savings provider they’d never heard of if they thought the returns would be higher than those of their existing provider. A further fifth (21%) stated they were unsure, indicating they could potentially be convinced.

Check the Financial Conduct Authority (FCA) website and its warning list (https://www.fca.org.uk/scamsmart/warning-list) for cloned companies to make sure you’re dealing with a genuine company. If you have any suspicions, talk to someone you trust and don’t ignore your concerns. It’s important to ask questions and make sure you feel comfortable in the choices you are making – and remember, if the returns seem too good to be true, they probably are.

Source data:
[1] Barclays data on reported scams from October 2021 – December 2021. Mortar Research study of 2,002 participants, January 2022.