12.1.9 Why we fall for fraud

From: Financial Consumer Agency of Canada

There are many reasons—and fraud artists are good at using all of them.

  • We'd all like to believe we can get something for nothing—such as free prizes—so we may be more gullible when we hear that pitch.
  • We believe what our friends and relatives tell us. Sadly, fraud is often committed by people who prey on our friendship and trust to swindle us.
  • Fraud artists are very convincing. Their fake websites, ads and flyers look just like those of real organizations we're accustomed to dealing with.
  • Fraud artists use legitimate sales tactics in their pitches, so it can be difficult to see through them. They often pressure us to participate by saying that time is running out or that all of our friends are investing.
  • Often, fraudsters warn us not to call the government, regulators and banks. They say it's a secret opportunity or a hot tip, and we'll lose out on a great deal if we do. Of course, this helps the crooks go undetected.
  • They play on our desire to make a contribution to a worthwhile cause.
  • We're embarrassed. When we do fall for fraud, we don't like to admit it, or reveal how much money we lost. But without reporting a scam, there's no chance of recovering the losses or catching the thief. So the fraudster is free to scam other people. That's why it's important to report all fraud and attempts at fraud. (See the section titled What to do if you become a victim of fraud in the Protect yourself from fraud section.)
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