Psychology Explains 5 Reasons Why We Fall Prey to Scams – and What to Do About It


We never want to get the raw end of a deal, but truth is all of us have been duped into spending our hard-earned money. But what makes us blind to these insidious schemes and fraudulent tricks – and what should we do about it? Our human behaviour unlocks the keys to the whys and hows.

Truth Bias

Numerous scientific studies prove that people are poor at spotting liars, and this is because we presume that fellow humans are honest. In an experiment to gauge whether people can tell if someone is lying or telling the truth, participants were inclined to see more truths than deception, even when they were told beforehand that half of the statements are lies. This phenomenon is called Truth Bias.

Professor Aldert Vrij, author of “Detecting Lies and Deceit,” says our brains have been programmed to trust because:

  • Our mental process makes our social interactions simple by relying on a default judgment based on past experiences – and most of the time, our previous encounters are sincere.
  • Politeness: It’s less harmful to believe someone is honest rather than mistakenly believing someone is out to cheat you.

What to do: Good old lady wisdom says trust takes time to build. Verify things over time. Read the fine print before signing any contract. Think before you click on an invite on your smartphone. Ask questions and investigate, especially when something evokes your suspicion.

Additional read: 6 Things You Need to Do to Protect Yourself from Credit Card Fraud

Returning the favour

Have you ever bought something because the salesperson has invested time on you, or handed you a free trial? Free and unexpected gifts, a positive experience, or free information urge us to reciprocate, according to psychologist Robert Cialdini, author of “The Psychology of Persuasion.”

What to do: These tricks are meant to get something bigger from you in return. Don’t feel obligated, don’t feel indebted, and don’t feel guilty when you have to turn a salesperson down. It’s all part of their game anyway, so your rejection is fair and square.

Additional read: What Drives You to Buy When You Don’t Intend to Spend? Sales Tricks and Tactics Revealed

Avoiding embarrassment

“Do you get commissions from investments you recommend?”

“What licenses and certifications do you have?”

“Do you have other outstanding obligations?”

These are questions we must be asking to anyone who wants our money, like financial advisors or potential business partners. But most of the time we don’t; it just doesn’t sound right.

A reasonable decision, however, is to get into these somewhat embarrassing discussions. We should know how people are earning money from us, or if your potential business partner could commit to loans and so forth.

What to do: Think about how you will frame the tough questions. Practice how to say it, or send it via email. Whatever the means, don’t let the hard questions overwhelm you.

Too lazy to think

We have a tendency to make mental shortcuts in decision-making. Often, we see a website with the logo of a government department, but we never question its authenticity. A lot of online scammers have been able to get away with their crime using this psychological trait.

What to do: Be a bit more sceptical about giving away your personal information, and don’t comply with requests from strangers right away.

Additional read: Warning: Top scams to watch out for when travelling in Asia


Every scammer is an emotional manipulator. They are masters at constructing stories that appeal to our fear, guilt, greed, loneliness, compassion, and so forth. They build up this narrative to put us under their under a spell. They use our weaknesses against ourselves!

Hence, we need to be aware of our emotional health and blindspots. Below is our hierarchy of needs as theorised by psychologist Abraham Maslow, as well as examples of products, services, and scams that trigger our insecurities.

  • Physiological and physiological needs: male enhancement products, products that promise to avoid pain, services that promise sexual returns (credit for sex scams)
  • Safety needs, or our desire for financial security, physical well-being, and provision for safety nets: insurance, MLM opportunities, get rich quick schemes, work at home schemes, offers that tell you supplies are running out.
  • Need for love and belonging: online dating sites; Internet love scams; products that target our physical appearance and desirability (weight loss, skin care, anti-aging)
  • Esteem needs, or desire for power, position, and prestige: products that promise to give you an edge over others.
  • Need for self-actualization, or desire to become our best selves: self-help products, leadership gurus

What to do: Give yourself some time to think about the sales offer. Check the facts, such as if they pitch about being a self-leadership expert, check on LinkedIn for their full profile. Look for reviews about the product or service on credible websites.

Additional read: What Credit Cards Do to Your Brain to Make You Spend More

Follow BankBazaar on Facebook for more enlightening advice on how your psychology affects your money.

The post Psychology Explains 5 Reasons Why We Fall Prey to Scams – and What to Do About It appeared first on is a leading online marketplace in Singapore that helps consumers compare and apply for the best offers across all financial products: personal loans, home loans, credit cards & investments.

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