Posts
In recent months I have written many stories about individuals (amateur property investors usually) claiming to have lost money – search for my stories on www.journalisted.com 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.
If you would like to to comment on this article, click HERE to e-mail Graham.