Why do People Fall for Scams?

publication date: Jan 20, 2010
author/source: Guest article by Graham Norwood, Propertynewshound.com

Why do People Fall for Scams?

In recent months I have written many stories about individuals (amateur property investors usually) claiming to have lost money – search for my stories on Journalisted to find them.

They claim to have lost out not simply because of falling capital values in the downturn but sometimes because of deliberate actions by firms, ranging from allegedly not delivering promised properties to the firms going into liquidation.

Not all of the stories have been about scams, but during the preparation of those pieces I continually asked myself ‘why on earth did people put money into these schemes?’ Then I came across research undertaken by the University of Exeter and commissioned by the Office of Fair Trading, which makes interesting reading.

It looked at hundreds of scams – mostly not property ones, but sharing similar characteristics to those we are all familiar with – and it also looks at the psychological make-up of the individuals who admit being taken in. Its key findings were:-

  • Up to 20% of the UK population may could be particularly vulnerable to scams, with previous victims of a scam likely to respond to another one;
  • It suggested knowing about the subject of a scam may actually increase the risk of becoming a victim through over-confidence;
  • That victims are often successful but “tend to be unduly open to persuasion by others and less able to control their emotions”, and;
  • Victims often keep their decision to respond to a scam offer private and avoid speaking about it with family or friends for some time after the event.

The research also found many scams using highly sophisticated manipulation of human emotions like excitement or fear. Scammers also abuse people's trust of authority by making scams look like legitimate offers from quality firms or institutions.

There is probably no surprise with all of this, although I have never seen it written down so concisely before. If you think about property scams – we all have seen them and most of us know victims – the research findings fit the bill very accurately.

Graham Norwood - Property Journalist (Propertynewshound.com)

Graham Norwood

Graham has been a journalist for over 20 years and writes on residential property for newspapers, magazines, websites and blogs in the UK and across the world.

He specialises in writing about property markets and has 10 years experience of the residential industry. Today in the UK Graham is a frequent contributor to the Daily Telegraph and Sunday Telegraph, the Financial Times, the Daily Mail, The Independent, The Guardian and The Observer.

Around the world you can see his weekly column in the Emirates Business 24/7 newspaper and website in Dubai, as well as regular articles in The Wall Street Journal and the Irish Sunday Business Post.

He also appears frequently in industry publications, notably Estates Gazette, and undertakes writing for industry bodies like the National Housing and Planning Advice Unit. Graham's latest book, Profiting from Property in a Recession, is the fourth he has written on the property business.

Graham has written
three other books on property, is an occasional guest on radio programmes about housing, and is a buy-to-let landlord in the UK.

Need help with a property problem? Have a question? Why not call Designs on Property on 07585 897128 or Contact Us via email.
Kate's Consumer Portal

FREE Buy to Let eBooks

Download a copy of our
Buy to Let Show eBooks
for FREEsimply click on
the image below

Buy to Let Show - download our Buy to Let eBook for FREE