Science of Scams
Science of Scams

Scammers are constantly changing their tactics. But understanding the science behind their techniques will help protect you against new scams.

The Financial Industry Regulatory Authority (FINRA) funded research to better understand these tactics. The study found that many of these techniques are similar to marketing approaches used by legitimate businesses.

The difference is that a "hard sell" from a legitimate business may simply mean you end up buying something you didn't really want or need. A scam takes your money and leaves you with nothing.

Establishing a Connection

The first step a scammer takes is gaining your trust.

The scammer wants to build a relationship with you so you will not question his motivations. He may use social media to learn more about you, including a potential "hot button" issue that may elicit a specific response. For example, he may learn that you're single, and he may use that information for his "sales pitch."

Con artists also use a tool called reciprocity. The scammer will extend a small favor to convince you he is a good person and to establish a positive relationship with you. For example, you may meet someone who gives you a tip about a "unique investment opportunity."

What You Can Do

Be cautious about all investment opportunities, business prospects or work-from-home offers. Every investment has risks, but a professional investment broker or advisor is properly licensed. Do your research. If the promised return on investment is too great, that's a red flag. For more information on broker-dealers and registered representatives, visit

A con artist will attempt to use his friendship with you to overcome your concerns or to discourage you from researching his offer. A true friend would never want you to make a financial investment without allowing you to thoroughly research the opportunity.

Source Credibility

A scammer uses lots of techniques to make herself look credible. She might claim to be from a legitimate business, but uses a fake website, business cards or phone number. The scammer provides the information to potential victims to "prove" that her connection to the trusted business is real.

It's easy to set up a phony website or to get an unregistered cell phone. The scam artist may look and sound so convincing that the victim doesn't feel the need to check out her real qualifications.

What You Can Do

Check out every business by going directly to their website. Do not follow a link in an email. Often scammers will use a website that's similar but not exact-, for example. Type in the URL yourself.

Talk to someone at the business to verify that the scammer is who she says she is. In addition, check out the company's BBB Business Review at our search page. BBB often puts an alert on the report of a business if a scammer has been using a company's good name for disreputable purposes.

Scams that Play on Emotion

Scam artists use emotions to get victims to make quick decisions before they have time to think.

Scam artists prey upon the desire we all have to get rich quickly and easily or to help a loved one in need. They use this impulse to overcome the victim's reasoning, telling the victim that he or she must act quickly.

For example, in the "emergency" scenario, the scam artist calls or emails to tell you that one of your loved ones is in desperate need of money and to send funds immediately. In some cases, the scam artist will pretend to be a grandchild or friend of a loved one. He may tell you he is stranded in another country or that he has been arrested or in an accident and that you need to act immediately. The scammer counts on the fact that emotional decision-making is often not rational.

What You Can Do

Never react quickly to a request for money. Call other family members to investigate if a loved one is truly in need.

If you are presented with a "once in a lifetime" chance at riches, verify the opportunity. If the deal sounds too good to be true, it probably is.