What Psychology is Used Behind a Financial Scam? 

by Susan Paige on January 7, 2020 · 0 comments

Whether they’re to do with pension mis-selling or mortgage mis-selling, financial scams are certainly not unheard of in this day and age. In fact, they are becoming more sophisticated than ever and are made up of a whole range of unlawful tactics. From poor communication to crafty operations, here we uncover the psychology behind a financial scam – and how you can avoid being targeted. You may thank us for this, so read on! 

Limited communication 

When it comes to investing in a financial product, you need to be informed of every little detail of your investment, especially if it’s a high risk one. Scammers will most likely avoid telling you about certain aspects of the investment process. For instance, they may not clearly explain the terms and conditions of buying the product, or they may not make you aware of certain fees or charges. If you feel that your financial adviser is purposely withholding information from you, then you may be falling into the depths of financial mis-selling. However, to avoid this, make sure to do your research beforehand about the investment process. This will inform you about all the things that you should be asking your adviser. 

Pushy tactics 

Scammers will commonly use forceful or aggressive sales tactics to get you to invest. This behaviour can typically take place over the phone in the form of ‘boiler room schemes’. Simply put, boiler room schemes are operations designed to lure investors into what is essentially a scam. In situations like these, attackers tend to pressure people to buy quickly, as well as make unsolicited offers to the investor. To avoid falling victim to these scams, make sure you are always taking the time you need to invest properly. Even if it seems urgent, never feel pressured into investing in something you are not fully certain of. 

The digital age 

Scammers will know that some people may be less confident with the Internet than others, and they will use this to their advantage. For example, they may create duplicate banking websites to get hold of people’s bank details. In order to lure people to this website, an email normally gets sent out. These emails are generally very crafty, and scammers will meticulously design them to resemble something that your bank would normally send to you. 

If you think that you have been targeted by one of these emails, it’s best to check with your bank. They will confirm if they have sent the email straight away. 

In the office 

We really do mean it when we say that scammers can target all aspects of a person’s life, and this includes their job. In the age of high data security, you may think that you are safe at your desk, but be cautious about who may be contacting you via email. It is not uncommon for attackers to pose as a company CEO and send an email to an employee that is in charge of company finances. If you do receive such an email, it is always best to check face-to-face with your boss about whether they have sent this email. 

Out of the office 

Scammers will have no hesitation to target your personal life. A common example of a ‘personal life scam’ is a dating scam. In a crafty operation such as this, some individuals will want you to transfer money so that you can meet up, while others will send blackmail links through social media or email. If you do get contacted through these means, do not engage with the other person and (most importantly) do not click on any weird links! 

And there you have it – the common psychology that is used behind a financial scam! Luckily, there are plenty of helpful teams out there that can help you get the compensation you deserve if you’ve ever been financially mis-sold. Expert Pension Claims is one of them and queries related to financial mis-selling are what they deal with. 

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