Written by Joanne Upton, Head of Behavioural Practice, Fiftyfive5, part of Accenture Song


Have you ever fallen for a scam? If so, you’re not alone. Scams are a major problem, and they cost Australians nearly $3billion in 2023. But it’s not only the financial cost that has an impact; it’s the mental health costs too. There are many heartbreaking stories of how Aussies have fallen prey to a scam and the emotional and psychological distress they experienced.

But why are we so susceptible to scams? And what can we do to protect ourselves? In this blog post, we’ll discuss how behavioural science can explain the psychology of being scammed. We’ll also discuss the human element and why it’s so important to be aware of what makes us susceptible.


So why are so many people susceptible to being scammed?

If you ask anyone how likely they are to be scammed, they’ll likely rate their ability as pretty high. They have a range of mental shortcuts they use to detect scams and they employ many different self-taught protective behaviours to keep scammers at bay. In fact, studies have shown that only 1 in 10 believe they could fall victim, meaning we have an inbuilt optimism bias – we’re hardwired to overestimate our ability to avoid becoming a victim. We assume it ‘won’t be me’ it’ll be someone less tech savvy, more gullible, more easily persuaded. But if Mike Fitzpatrick, a former State Treasurer, can get caught up in a scam – we might need to re-think our assumptions.


Scammers are appealing to our cognitive biases to infiltrate

Scammers innovate to infiltrate. They slip below people’s radar and appeal to their automatic, instinctive, emotional mental mode of System 1. Many of the persuasive techniques they adopt are listed in Robert Cialdini’s groundbreaking book ‘Influence: The Psychology of Persuasion’. In it, he outlines 7 key biases to employ to be a master persuader: Reciprocity, Scarcity, Authority, Commitment and consistency, Liking and Social proof. Scammers are very adept at using these and more. The tactics they use are evolving so fast it’s hard for people to stay ahead.


So what is happening in the ‘scam moment’?

The truth is that anybody can fall victim to a scam because we are most susceptible to being scammed when in a ‘HOT-state’. The difference between encountering scams or becoming victim is the degree to which we are in a HOT-state in the scam moment. HOT-states are not something that only the less techy, less savvy or the more gullible experience – they’re universal! It’s when people allow emotion to impact their rational decision making. And Scammers prey on this HOT-state by appealing to us emotionally, being specific to our needs, appearing good value, or at the right time and being endorsed.

“I received a text that said my toll payment was overdue. I live in Newcastle and there aren’t any tolls, so I would have ignored it. But I’d been on a trip to Sydney the week before so I was expecting a charge.” Scam Victim

You get caught up in the deal, the investment, the potential romance, or the penalty. And you don’t engage in rational decision making because the scammer is appealing to all the right cognitive biases.
Your guard is down, you take less notice of the ‘clues’ to employ your protective behaviours and you fail to engage System 2.


Your context can further amplify the HOT-state

As behavioural scientists, we understand just how critical context is to individual behaviour and decision making; and this is especially so in the ‘scam moment’. Contextual factors can inflame someone’s HOT-state and further reduce their rational decision-making ability. This might be their environmental context; someone who is distracted with minimal bandwidth (e.g. cooking and pacifying a child) who encounters a scam on their phone, will pay even less critical attention. It might be their emotional context; when someone feels lonely and seeking connection, they’re more receptive to opportunities that offer a degree of friendship or romance. It might even be their individual personality; they’re naturally more impulsive and quicker to respond to offers or deals.


Victims of scams are grossly underreported

Because of optimism bias, and the fact that you’re more likely to become a victim when in an HOT-State, scam victims feel foolish and ashamed when it happens to them. Which is why reporting of scams is so low – with studies showing that only 1 in 4 report.

“When it happened to me, I didn’t go to anyone for help. I just felt so stupid and ashamed that I got caught out. Still, to this day, I haven’t told anyone.”

So the figures we read about in the news – are only a fraction of the true picture. No-one is scam-proof – and the sooner we can de-stigmatise becoming a victim, the better we can gain a complete picture of scams impacting Australians and support people.


Blocking scammers before they reach consumers 

A recent Australian Competition & Consumer Commission (ACCC) press release shows early indications of a decline in the number of scams impacting Australians. Critically, this is mainly due to the work they’re doing upstream (technology, enforcement). As this blog post suggests, it will be incredibly challenging for any individual, when they’re in a HOT-state to combat scams. Instead, much more effective is blocking the scam before it reaches consumers. Catriona Lowe, ACCC Deputy Chair: “Over the next two years we will continue to invest in technology-based solutions that will centralise intelligence and distribute information to those who can act on it – such as banks to freeze accounts, telcos to block calls or SMSs and digital platforms to take down websites or accounts”.