How and why do scams work?

There are many types and variations of scams on the Internet, which use the same elements. Scammers tend to use a 3-pronged attack, preying on the following weaknesses:

Ignorance
– our misconceptions about certain facts allow fraudsters to request unusual things without raising too many alarm bells. Often our preconceptions do not allow us to perceive any threat. The Overpayment or Advance Payment Scam is an example of how scammers know more about the Western Banking System than the general public. Did you know that a cheque that has 'cleared' into your account can still fail and leave you out-of-pocket or without the goods?

Desire
– even with the alarm bells, we tend to turn a deaf ear if we want to believe it is true. The Nigerian 419 Scam is based on this desire or greed. Personal or business circumstances often make us hope for the best even though it looks too much of a good thing. It usually is!
Other Psychology
– scammers may use our guilt and/or innate honesty or decency to persuade us to believe them and follow through with their requests. The Sweetheart Scam found on dating sites or as another phase of one of the other scams depends on just this technique.

Ignorance

The most common scams rely on two common misconceptions:

See our 7 essential tips for avoiding scams

The Overpayment Scam or Cashback Scam uses those two misconceptions to great effect. The buyer sends the seller a cheque for more than the value of the item (generally blamed on either clerical error or because they are buying on behalf of a client and the cheque includes their commission). The buyer asks that the seller bank the cheque and wire back the change via Western Union (or similar). The cheque clears so the seller sends back the change with confidence that he or she has the money in their account. A week or so later the money is recalled because the cheque turns out to be stolen. By this time the buyer is long gone - along with the money.

Here is a typical enquiry from a scammer: (grammatical and spelling errors left in)

Hello seller, I am very much interested in the immediate purchase of your item. i am actually buying it for a client.payment will be made with cheque.The payment you will recieve will include shipping fee,insurance and my own commission as an agent.After your confirmation that the money cleared your bank,i will want the shipment cost and my comission fees that has been agree with my client sent to my shipper via western union money transfer in one of their outlet around you so that the shipper can begin all neccessary shipment procedure/pick up of the item in your place.if you agree with me to this capacity i would be grateful you reply my email and give me your full name and contact address/phone number and your finalprice for the item so that i will have my client notified of your acceptance of the offer. thanks for your understanding. i will wait your quick response asap. Get back to me. REGARDS

See the Spotting Scam emails section for how to spot the (many) clues in this email.

Desire

Most scams work because of our willingness to overlook otherwise suspicious circumstances if it involves something we want to believe is true

Desire is our Achilles Heel. Even those who understand those misconceptions above, still end up getting stung because of this.

Fraudsters make an offer that is hard to refuse. They might offer more than the going rate, or just be an easy sell, paying the full amount no questions asked. It might almost feel like being given a blank cheque. It will often be the kind of item that you would expect someone to want inspect before buying but they want it immediately without viewing (generally the first sign of a scam).

As scammers' techniques improve, the temptations go beyond just financial. In one case a scammer posing as a 19 year old blonde model from Germany (photos available) wants to rent someone's room in London - many red blooded males would find the thought of having such a lodger hard to resist! Using sex and love as the carrot/persuasive factor is a fast growing area with Sweetheart scams.

Other psychology

Many of us honest folk will believe something just because someone says it is true. However , scammers know that in these more suspicious times, they sometimes need a little extra persuasion. Nothing works quite like a sob story. One notorious (and ongoing) fraudster in the spareroom market purports to be a bereaved, disabled old man in Germany offering a fictitious flat for rent in Hampstead at a steal of a price. He is forced to rent out the property as he can no longer travel because of a tragic accident in which his wife was killed and he was left deaf (and hence unable to respond to phone calls.) Life means very little to him now so you can have the flat for a fraction of what it's really worth. Of course you will need to send the deposit by Western Union because he can't travel etc.

Some people have been so thoroughly taken in by him that they have telephoned sites that have banned his adverts to accuse them of acting callously - "Why have you banned his advert? Don't you realise he is a disabled old man whose wife died in a car crash etc? "

(Is it even really a 'him'? The Internet is so anonymous that Holger could easily be a woman!) One group actively interested in his stories are the Metropolitan Police.

Guilt and our charitable instincts are also frequently brought into play to soften us up to the fraud premise or story. Beware the worthy cause if you cannot verify it or if there is no proof beyond the word of the buyer/seller.