It seems that if you pick up a newspaper or turn on the radio just now, sooner or later you come across a story about the growth of online fraud. While fraud in itself is nothing new, increased use of digital platforms during the pandemic gave the fraudsters a whole new set of opportunities. In the UK, the amount lost online to fraud rose by 33% to £2.3 billion during 2020. 

In this article I look at why the fraudsters have been so successful and what you can do to protect yourself. 

Why are online scams more prevalent now?

My theory is that it’s down to a combination of factors. Firstly, the pandemic brought more people online as it became either impossible or extremely difficult to carry out day to day tasks face to face, or even on the phone. Suddenly new users were flooding onto platforms for the first time. 

Secondly, people were more isolated than ever before. It meant that people who were inexperienced in using online services were often remote from the people who could have guided and helped them. Loneliness and isolation also makes people emotionally vulnerable – another weakness that scammers exploited. 

Thirdly, many people were hit hard financially. Not everybody qualified for furlough or other government help – and being worried about finances or desperately looking for a means to earn money makes people open to being manipulated. 

Finally, the scammers themselves were also finding themselves in an unsettled position and needed to pivot towards a more digital modus operandi. And don’t forget that many of the people involved in the scam – the foot soldiers – may themselves be exploited by the criminals who are actually benefiting from the fraud. 

In a nutshell, due to all these factors, online fraud had become a growth market.

There are many types of scam: for a run down of common scams that are currently doing the rounds: Types of scam | MoneyHelper

How do scams work – and what can you do to protect yourself?

Many scams play on natural human traits to manipulate responses. These range from exploiting people’s own vulnerabilities to using social conventions – and sadly it’s often the more trusting and innocent that get taken in.

Here are a few of the common techniques that scammers may use – scams often feature a combination of these. Interestingly, some of the techniques are also used by marketers and salespeople to grab attention for (hopefully) more ethical ends. 

Social proof

If lots of other people trust something, it must be safe to follow their example – right? Scammers will use celebrities to endorse their schemes in fake adverts on various platforms. Others include reviews and testimonials to ‘prove’ that they can be trusted. 

Why it works: it builds a sense of security in the service or product being offered and may prevent people from fully questioning what they are really buying or signing up for. 

It works so well because legitimate businesses use reviews and celebrities to promote their products which gives the scammers an additional boost. If you have seen trustworthy products or services promoted by celebrities for years, why should this one be any different?  

How to protect yourself: take a step back. Take time to do some more research of your own into the product or service. If it’s a real offering, taking time will not be a problem. 

Which leads nicely to the second technique:

Time pressure

After offering the bait, scammers may push their marks to make a decision quickly. It could be that this special offer is only available in the next couple of hours or even minutes. (This technique used to be a very popular sales ploy by double glazing companies…)  Or, even more effectively, you will only avoid certain disaster for you or a loved one if you act right now. 

Why it works: because of the pressure to act fast, it’s more difficult to think through what you are being offered or asked to do. The urgency is used to confuse you.

How to protect yourself: in a sales situation, no trustworthy organisation today should use this type of pressure on you. You are completely in your rights to give yourself time to do more research on the offer. 

If you have received a message from a loved one in need of urgent assistance, try to verify it’s them by using a different method to speak to them directly.

Fear of missing out

This tactic works by creating a desire for something – and then building a strong sense that you will be the one missing out if you don’t grasp the opportunity while you can. 

It works because everyone has heard stories of success when people got into something at the right time. Those who invested in Apple early on; who bought a property in a bad location just before it became gentrified; who were the first to see the promise of Bitcoin…

The scammers tune into their marks’ desires to be one of those lucky few who acted early. (And in sales and marketing you see it all the time – ‘Hurry, while stocks last!’, ‘Don’t miss out on this once-in-a-lifetime opportunity!’)

The book by Daniel Kahneman, Thinking Fast and Slow, gives a detailed account of exactly how fear of missing out works. Kahneman identifies two systems of thinking that everyone uses. System 2 is the slow, considered type of thought, which you use for solving difficult or novel problems. System 1 – the fast thinking – is the autopilot mode that allows you to function effectively in everyday life. It’s this system that scammers rely on you using.

How to protect yourself: take a step back and try to look at the situation from a different angle – in other words, engage your System 2. 

The law of reciprocity

One of the most ancient forces that binds society together is the unwritten rule that if I do something for you, you will eventually pay me back. Millenia of small bands of people working together has essentially hard-wired this into most of our social interactions. 

Why it works: It relies on following easy patterns of behaviour from familiar cues – such as ‘if x gives me y, I need to reciprocate’.

In terms of a fraud, it works by the fraudster offering something of negligible value, and then requesting something of real value in exchange. The social pressure means that the mark is very likely to go along with it. 

And in the field of sales and marketing, volumes have been written about how to use this ‘powerful persuasion technique’. 

How to protect yourself: don’t accept what you are being offered at face value, or to be pressured into buying something you don’t want. If there are large sums of money involved, always carry out your own investigation before agreeing to anything – just because you have been offered a ‘good deal’ or a ‘freebie’ doesn’t mean you have committed to anything. 

Leveraging people’s own desires against them

Everyone in marketing has heard of Maslow’s hierarchy of needs: at the base it’s the need for safety and security, and further up there’s the need for love and belonging, esteem all the way to self-actualisation. 

And it’s not just marketers who use this framework: fraudsters know that targeting these core needs will give them a powerful edge in getting what they want. This is why many scams centre around investments (safety needs, financial security), premium or luxury goods (esteem, need to feel prestige) and romance (the need for love and belonging). 

Why it works: when targeting core needs, the fraudster is using the mark’s own desires against them. In the same way a martial arts master directs their opponent’s own weight or movements against them. The desire for – say – a romantic partner means the mark will be more likely to go along with the scam and not question the reality of the situation. 

How to protect yourself: take a step back to give yourself space to question what you are being asked to do (again, easier said than done – especially if fear of missing out or reciprocity has been brought into play!) 

This technique can help. Imagine you outside the situation, as if you were an onlooker, and ask the same kind of questions a good friend would. Using the example of an online romance:

• How well do you really know this person? For example, have you ever met them or had a video call with them?
• Are any of their messages incongruent – for example differences in grammar or spelling? (Some romance scams are carried out by multiple people – some trained to hook people in, and others to groom the likely candidates.)
• Has the relationship moved very quickly from the initial messages to declarations of love?
• Have they asked you for money? (Getsafeonline.org lists this as one of the red flags to watch out for in online dating.) 

Impersonation

This type of fraud is as old as the hills – and very, very easy to do online. Not only is there no need for personal contact, which means the scammer can pretend to be anyone and is not hampered by age, gender or nationality, but the approaches to potential marks can be done quickly and easily in massive volumes using email or online adverts. 

As any marketer knows, reaching a large audience for little cost can bring good ROI…

Why it works: as with legitimate direct marketing, impersonation fraud uses a combination of targeting and sheer volume to find willing marks. Both email and SMS scams are very common, and often use a sophisticated degree of personalisation to get the initial attention.

At the fairly basic end are pure volume scams. If you send out millions of SMS messages purporting to be from a specific bank, giving a link you need to click to rescue the money in your account there is a chance a proportion will go to people who do use that bank, and that a small proportion of them will fall for the scam. The high number of initial messages mean the results are worthwhile for the scammer. 

More sophisticated scams use malware to scrape contacts from a compromised email account to send more targeted messages, usually as a cry for help and requests for money. These stand a chance of working better because the message is coming from somebody you know (rather than an out of luck Nigerian prince… ). 

How to protect yourself: if you receive a message from an institution, like your bank, never click the link. Always investigate by going online yourself, or phoning them using the usual number you call them one. If you have received what you believe to be a scam call purporting to be from your bank and want to check the validity, hang up and call your bank from a different phone or wait at least 10 minutes – otherwise you may find yourself still on the line to the scammers. 

What to do if you have been a victim of a scam?

No one is immune from falling for scams – online or offline. Many, many highly intelligent people have fallen for scams, so, if you have been affected, the most important thing is not to let embarrassment stop you from looking for help.

If the loss is small, you may want to chalk it up to experience, but it’s still worthwhile to report  any unusual transactions on your bank account or credit card to your bank. They will try to recover the money lost and may replace your current cards to prevent any further fraud. 

Action Fraud in the UK is the best place to report fraud and other cyber crimes, which are passed on to the National Fraud Intelligence Bureau for investigation. 

Victim Support provides confidential advice and support for victims of crime.