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Psychology of Scams with Dr. Stacey Wood

Released Wednesday, 10th June 2020

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Psychology of Scams with Dr. Stacey Wood

Wednesday, 10th June 2020

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I have always been curious as to why so many people fall for scams. What are some of the consistent elements that scammers use to hook us? In this episode, we find out. We talk about the different psychological tactics scammers use to successfully scam their victims.

Our guest for this episode is Dr. Stacey Wood. Dr. Wood is a clinical neuropsychologist and full Professor of Psychology at Scripps College in Claremont, California. She is an expert on a number of issues related to neuropsychology including aging, decision making, and capacity issues. Dr. Wood also works on the frontline with fraud victims as a consulting neuropsychologist with Adult Protective Services on cases in Riverside and San Bernardino, California.

Dr. Wood shares her experiences working with scam victims including the psychological tactics she sees scammers using the most. We also discuss red flags and practical tips for helping and talking with parents and grandparents.

Show Notes:

[01:01] - Dr. Wood shares how she got into the psychology aspect of scams and frauds. She has worked with older adults most of her career, and she loves that.
[03:43] - When you are interviewing scam victims you start to understand the complexity of these scams.
[04:05] - Dr. Wood goes on calls to interview scam victims and she works with the Elder Abuse Forensic team.
[05:59] - Scammers use very complex psychological tactics.
[07:48] - There are certain risk factors among older people that are more common.
[07:58] - A loss in the past year greatly increases the chance of fraud.
[08:07] - Cognitive impairment is a huge risk factor in older adults.
[08:54] - Scammers are like a virus. They change and mutate incredibly quickly. Scammers went from mailing solicitations to older people to phishing emails, robocalls, and now social media.
[10:06] - When someone suffers a loss it is a huge transition in their life. It can be a loss of a sounding board and create isolation.
[12:41] - Adult children should initiate conversations with their parents about money because the parents most likely won’t do that.
[13:08] - Dr. Wood suggests adding an adult child to a bank account just for monitoring purposes.
[15:58] - You have taken care of me and watched over me all these years, now I have to start thinking about laying the groundwork of taking care of you guys as you age.
[18:30] - Most decisions we make are more impulsive and automatic. We really don’t have the resources to dig into every small decision we make during the day.
[19:57] - When there is scarcity it causes consumers to act more quickly.
[21:12] - Dr. Wood recommends taking time out or finding a sounding board before making a decision.
[22:38] - Urgency, scarcity, and authority are all red flags to be watching out for.
[23:44] - Scammers use the fire hose approach. They target everyone and hope that certain consumers will be in an emotional state or be prime to respond to their solicitation.
[25:06] - There are three types of reactions by consumers.
[25:22] - If you are wary about an email at all just delete it.
[28:48] - Scammers don’t care who they cheat.
[29:54] - When someone is scammed they are often terrified to tell anyone because they are in fear of how they would be perceived and how it would hurt their reputation.
[31:31] - Scammers often use the psychological tactic of always calling and always being in their life.
[32:01] - The bad guys only have to get it right once. The good guys have to get it right 100% of the time.
[32:44] - Having an open family dialogue about these issues is useful. Be more aware in these times of uncertainty.
[34:54] - Discussing your decisions with your parents may open the door to a broader discussion. It may help to foster a better conversation in general.