How Fraud Happens

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We've all heard the timeless admonition: "If it sounds too good to be true, it probably is." But fraudsters make their living by making sure the deals they tout appear both good and true. The trick is figuring out when "good" becomes "too good."

All fraud uses deception to enrich the fraudsters. The common thread that binds different types of fraud is the psychology behind the pitch. Many successful con artists are clever, disciplined and highly skilled at what they do. Whether they make their pitch over the Internet, by telephone, through the mail or in person, these criminals tend to use the same tactics time after time. 

They're masters of persuasion, tailoring their pitches to match the psychological profiles of their targets. They start by asking seemingly benign questions—about their target's health, family, political views, hobbies or prior employers. Once they know which buttons to push, they'll bombard their targets with a flurry of influence tactics, which can leave even the savviest person in a haze. Ultimately, fraudsters ensnare their victims into making an emotional, not rational, decision. 

It is impossible to compile a list of all of the schemes used by perpetrators because the fraudsters—who spend their "careers" developing schemes to defraud victims—are continually creating new, innovative  scams. Knowing the exact scam is not as important as understanding the types of persuasion tactics that are applied across many different schemes. Learning to recognize these tactics can help you avoid being a victim.

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