Why People Fall For Scams: The Psychology Behind It
Financial scams can happen to anyone, regardless of their age, education or experience managing money. Even people who are confident in their financial knowledge can be caught off guard by a convincing message or an unexpected phone call.
According to the Fig Barometer, 68% of Canadians express concern about financial fraud when using online or digital financial services. While awareness of fraud is important, understanding the tactics scammers use can help people approach suspicious communications more carefully.
Scammers don’t always rely on a lack of knowledge. They can also create scenarios that pressure people into quick decision making, often before they’ve had time to question what’s happening.
Imagine you receive a text or phone call claiming your bank account has been hacked - your immediate reaction might be panic. In that moment, your focus shifts from evaluating if that message is legitimate, to protecting your money.
That shift in attention is exactly what scammers try to encourage.
Understanding scams goes beyond recognizing suspicious emails or strange phone numbers. It’s about understanding the influence of fear, trust, and urgency on decision making, even when someone knows the tangible signs. It’s all about the human response, rather than intelligence.
Urgency
Scammers often create a false sense of urgency to prompt immediate action.
When someone believes their personal information, identity, or money is at risk, their reaction may be to solve the problem rather than validating the claim. For example, receiving a warning that your account will be locked within minutes can make verifying the claim feel like a delay in saving your account rather than the precaution that could protect your assets.
Tip: If you receive unexpected messages about your bank account, avoid using links or phone numbers provided in the communication. Instead, directly contact your bank through the number on the back of your card or its official website.
Impersonation
There’s a natural level of trust associated with well-known organizations or recognized figures and scammers are aware of this.
By impersonating banks, government officials, or financial professionals, scammers may appear more credible when demanding personal information. They may use official-looking logos or personal details so their communications sound legitimate. Apart from the message contents, fraudulent messages can be difficult to identify when the sender’s email address or phone numbers closely resemble a true contact.
Tip: Double check the sender’s email address or phone number, and contact the organization through official email addresses or phone numbers to validate the message. Oftentimes a scammer can disguise their details and slightly alter an email address or phone number to appear legitimate.
Emotional Manipulation
Fear is a common emotion that prompts rash decisions, but it’s not the only one.
Some scams take advantage of the thrill people feel when they are offered a prize or financial opportunities. The excitement of an unexpected reward may make someone less likely to question why personal or financial information is being requested
Other scams may also appeal to your empathy for others, as they ask for financial help for their friend or family. Although these demands are unexpected, it appeals to people’s better nature and desire to help someone in need.
These requests may even seem to come from someone you know if their account was impersonated.
Tip: Take a step back when you receive an unexpected request for money or personal information. Never send information or money to an unknown person, and contact familiar people directly for verification.
How to Protect Yourself From Scam Tactics
Being aware of common scams is useful, but it doesn’t make every fraudulent message easily identifiable. Make a habit of verifying messages to judge its legitimacy.
Here are a few precautions to make part of your routine:
Pause before responding to messages that demand personal information or payment
Independently verify requests by contacting organizations through their official website or phone number
Don’t share verification codes or passwords, particularly when the communication is unexpected
Monitor your accounts regularly and look for transactions you don’t recognize
Be suspicious of unusual or unexpected requests for information or money transfers
Already Responded To A Scam?
Contact your financial institution, explain what happened, and ask for next steps to protect your account and personal information. These steps may involve changing passwords, or freezing accounts to prevent further loss.
If you've shared a password, change it through the legitimate website or app, and update any other accounts where you've used the same password.
You can also report suspected fraud to the Canadian Anti-Fraud Centre. If you've experienced financial loss, consider contacting your local police.
The Bottom Line
Financial scams aren't always easy to identify. Scammers can use urgency, impersonation and emotional manipulation to make fraudulent requests appear credible, even to people who are familiar with common warning signs.
Even someone who regularly recognizes suspicious communications may receive a more convincing attempt.
Understanding how a scam tries to make you feel can be just as important as identifying what the message is asking you to do. When a request involves your money or personal information, taking a moment to pause, verify the source and consider your next steps can make a meaningful difference.
DISCLAIMER: This article is for informational purposes only and is not intended as legal or financial advice.