Looking Ahead as a Technique to Reduce Resistance

Authors: Steven J. Sherman (Indiana University—Bloomington), Matthew T. Crawford (University of Bristol, England), & Allen R. McConnell (Miami University, Oxford, Ohio)

Publication: Resistance and Persuasion. Ed. Eric S. Knowles & Jay A. Linn. Lawrence Erlbaum Associates, Publishers

Year: 2004

Focus Area: Persuasion, Prevention, Resistance

Relevance: Successful fraud prevention depends on understanding both how victims are persuaded, and how to persuade victims to resist future ploys.  Manipulating a person’s perception of the future may be used to either increase or decrease a potential victim’s vulnerability.

Summary: Fear of regret is a primary source of motivation when a person thinks about the future.  One can use a person’s tendency to think about the future and fear regret as a persuasion method in a number of ways, including:

  • What if I’m wrong?: People are more likely to follow the advice of someone else when they think about the consequences of making a wrong decision.  This fear of regret reduces trust in their own judgment.
  • Scarcity: Scarcity increases the fear of missing out on something valuable, increasing motivation and persuasion.
  • Hypothetically-speaking:  Rather than requesting something directly (“Will you do x?”), it is more effective to first ask if the target would be willing to comply if the request was made (“Would you do x?”).  People are more likely to agree to a hypothetical, and will later tend to act in accordance with their earlier statement.
    • E.g. Simply asking subjects to volunteer for a charity received 2% compliance.  Asking if they would comply if asked yielded 40% compliance.  When the subjects were phoned weeks later and asked if they would volunteer, 38% complied – a 36% increase.
  • Easy futures: Given that people tend to underestimate the difficulty of carrying out a request when the event is far in the future, people are more likely to agree to requests of all types if they do not require immediate action.

In order to encourage compliance for a long-term request, it is better to focus on abstract motivators, such as desirability (positive) or moral repercussions (negative).  When seeking short-term compliance, concrete or “low-level” factors are more convincing, such as ease (positive) or high cost (negative).

Author Abstract: Social influence always involves resistance on the part of the target of influence. Regardless of the pressures toward acceptance of the influence, there is always a countervailing force in the form of resistance that reduces the likelihood of persuasion being effective. Successful influence, then, will be achieved only when the forces toward acceptance are greater than the forces stemming from resistance. As Knowles and Linn (this volume) so aptly point out, bringing about a situation where the forces toward acceptance are greater than the forces toward resistance can be achieved either by increasing the positive forces for persuasion or by decreasing the resistance that prevents persuasion.

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Rethinking Trust

Authors: Roderick Kramer (Stanford University)

Publication: Harvard Business Review

Year: 2009

Focus Area: Decision Making, Emotion, Prevention Techniques, Consumer Behavior

Relevance: Fraudsters prey on humans’ natural inclination to trust in others.  Establishing guidelines for safe establishment of trust — rather than operating by easily-faked rules such as friendliness, class, or social standing — may help guard against predatory ploys.

Summary: While trust is necessary and useful, our process of giving and receiving trust is often superficial and flawed.  This article outlines recent research on the subject and summarizes findings into practical guidelines.  These principles (below) include insights for both individuals and organizations.

  1. Know yourself: Establishing oneself as either generally trusting or distrusting can help one guard against the weaknesses of each tendency.
  2. Start small: Incremental steps in establishing trust are more reliable and long-lasting than simply placing trust wholly with a new individual or company.
  3. Write an escape clause: Hedging the risk of trust with a back-up plan both guards against mistakes in judgment and allows people to trust more fully.
  4. Send strong signals: Strong, quick and proportional retaliation to violations of trust is as vital for the protection against predatory individuals as open sharing is to the establishment of trusting relationships.
  5. Recognize the other person’s dilemma: To foster trust, understanding other people’s need for reinforcement is important for establishing a mutually solid, trusting relationship.
  6. Look at roles as well as people: It is easier for someone to trust a person in a position that inherently evokes trust — such as an engineer or investment advisor.  This tendency can be misleading, causing one to see the role and forget the people.
  7. Remain vigilant and always question: By continuing to evaluate the relationships in which we place trust, we are more likely to perceive changes (such as a shift in an investment advisor’s reporting) that indicate a breach of trust.

Author Abstract: For the past two decades, trust has been touted as the all-powerful lubricant that keeps the economic wheels turning and greases the right connections—all to our collective benefit. Popular business books proclaim the power and virtue of trust. Academics have enthusiastically piled up study after study showing the varied benefits of trust, especially when it is based on a clear track record, credible expertise, and prominence in the right networks.

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Low Self-Control, Routine Activities, and Fraud Victimization

Authors: Kristy Holtfreter, Michael D. Reisig (Florida State University) & Travis C. Pratt (Washington State University)

Publication: Criminology

Year: 2008

Focus Area: Profile

Relevance: Which factors put people at risk for fraud remain largely unknown.  Previous attempts to identify the demographic profiles of common victims have had limited success.  This article instead examines behavioral characteristics that increase people’s risk of financial fraud.

Summary: One of the first theoretical analyses of fraud targeting and victimization, this article explores what puts people at risk for fraud targeting and victimization by examining specific routine financial activities and financial self-control.

  • Remote-purchasing (e.g., mail-order, online) significantly increases consumers’ risk of being targeted.  One additional form of remote-purchasing behavior (phone sales, infomercials, etc.) translates into a 61% increase in the odds of being targeted.
  • Low levels of self-control increase the likelihood of victimization once targeted.  An increase of one additional marker of low self-control on the evaluation scale increased the odds of succumbing to a fraudulent ploy by 302%.

This study uses data from a random Florida telephone survey conducted in 2004-2005, interviewing over 1,000 adults (922 complete responses).

For further research on enhancing individuals’ financial self-control, see: Hay and Forrest, 2006; Mitchell and MacKenzie, 2006; Muraven, Pogarsky, and Shmueli, 2006

Author Abstract: Recent research has used both routine activity/lifestyle frameworks and self-control theory to explain victimization. Thus far, combined tests of these theories have focused on offending populations and street crime victimization. Whether these frameworks also explain exposure to and likelihood of nonviolent victimization (e.g., fraud) in general population samples remains an open empirical question. Building on prior work, we assess the independent effects of routine consumer activities (i.e., remote purchasing) and low self-control on the likelihood of fraud targeting and victimization. Using a representative sample of 922 adults from a statewide survey in Florida, the results confirm our expectation that remote-purchasing activities increase consumers’ risk of being targeted for fraud. Low self-control has no effect on whether consumers are targeted, but it does significantly increase the likelihood of fraud victimization.

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2003 Consumer Experience Survey: Insights on consumer credit behavior, fraud, and financial planning

Author & Publishing: AARP

Year: 2003

Focus Area: Prevalence, Profile

Relevance: The rate and financial impact of fraud in the U.S. remains unclear, and survey studies such as this provide a useful window into the experiences of consumers.  By focusing on those 45+, this survey targets those with greater wealth and, potentially, more to lose.

Summary: This report examines the consumer behavior of adults age 45 and over.  It includes a measure of “bad experience with products or services,” which is identified as fraud or non-fraud.  Key findings include:

  • About 4 in 10 consumers reported ever having a bad buying experience when buying a product or service.
  • The percentage of consumers reporting a “bad experience” has increased significantly in recent years.  For instance, those reporting not receiving a product or service in the promised time increased 12% from 1999 to 2003.

Of those reporting a “bad experience,” 37% defined the experience as a major swindle or fraud.

  • Approximately 3.75% of the 45+ sample surveyed reported having been the victim of a fraud.
  • Approximately 2% of respondents reported that a given fraud cost them more than $1000.
  • The most frequent types of fraud reported by victims were: faulty car sale, false advertisement, company of purchase went out of business, and house contractor fraud.
  • African-Americans and 30% more likely than the general population and 45% more likely than Hispanics to indicate that a swindle or fraud cost them more than $1000.

Author Abstract: The 2003 Consumer Experiences Survey is the fourth survey in a series of periodic studies conducted in the past 10 years. The three previous surveys of consumer behavior were conducted in 1993, 1999, and 2000. 1 The current study examined many of the same topics from the past three studies including buying experiences with products and services, knowledge about investment terms, and experience with major fraud or swindles. However, other pertinent issues have been added to the current study including privacy and identity theft, and predatory mortgage lending.

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Narrative Persuasion and Overcoming Resistance

Authors: Sonya Dal Cin, Mark P. Zanna, & Geoffrey T. Fong (University of Waterloo)

Publication: Resistance and Persuasion. Ed. Eric S. Knowles & Jay A. Linn. Lawrence Erlbaum Associates, Publishers

Year: 2004

Focus Area: Persuasion, Resistance, Prevention

Relevance: Fraud prevention efforts struggle to convince potential victims of their own vulnerability, of the prevalence of fraud, and of the magnetic appeal of many fraudsters.  These messages might be more effectively received if they were presented in a narrative, or story format.

Summary: Narratives are particularly effective for overcoming strong resistance for a number of reasons, including:

  1. People don’t expect to be influenced by a tale, and so don’t summon the same degree of resistance.
  2. Given that narratives inspire careful attention, targeted messages are attended to that might otherwise be ignored.  People generally avoid information that is incongruous with their existing attitudes (e.g., Sweeney & Gruber, 1984), but narratives convey a message “under the radar.”
  3. Arguing against the “real” experience of someone in a story is more difficult than arguing against a hypothetical situation.  While fictional stories may not be true, if they appear plausible then they may still carry the same persuasive impact.
  4. Beliefs can be presented implicitly in a story, as opposed to being stated explicitly in an argument.  With no specific arguments to resist, the beliefs are more difficult to oppose.
  5. When people are cognitively and emotionally invested in a story, they are left with less ability (mental resources) or motivation to resist the targeted message.
  6. As people are more inclined to accept information from someone they like and feel kinship with, stories can present messages from likable characters with whom people can relate. (For example, the Office of National Drug Control Policy (ONDCP) negotiated with television networks to include anti-drug story lines in popular series (Forbes, 2000).  The opportunities for message placement are substantial.

Author Abstract: Narratives are ubiquitous. Consider the vast numbers of people who are consuming stories at any given time. Casual observation of rush-hour passengers on the subway in Toronto (and we imagine those in Chicago, New York, and Paris) reveals a large number of commuters reading newspapers, magazines, and novels. At the same time, commuters driving the city’s major highways are listening to the radio—hearing stories about what is happening in the world. Children in day care and at school spend part of the day reading (or being read) stories, selected as age-appropriate and noncontroversial in their content, lest impressionable youth be led astray. Meanwhile, adults at home avidly tune in to soap operas. After school and after work, millions of people around the world switch on the television, expecting to be entertained by dramas, comedies, and “reality” television.

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Fraud Victimization: Risky Business or Just Bad Luck?

Authors: Judy Van Wyk & Michael L. Benson (University of Tennessee)

Publication: American Journal of Criminal Justice

Year: 1997

Focus Area: Profile, Decision Making

Relevance: The degree to which people’s characteristics, attitudes, and behaviors influence their vulnerability to financial fraud remains an open question.  If financial risk-taking, for example, is found to influence a person’s susceptibility, then this tendency could be targeted for more effective fraud prevention.

Summary: Fraud victims are assumed to have characteristics or behaviors (such as taking unsafe risks) that make them more vulnerable to fraud, and thus share partial responsibility for their victimization.  This article investigates the actual influence of financial risk taking on the likelihood of fraud victimization.

  • Surprisingly, an individual’s age and willingness to take financial risks correlates with increased attempted victimization, but not directly to successful victimization.
  • Those who expressed more willingness to take financial risks are more likely to receive a fraud attempt.  It is possible that this difference can be accounted for by selective memory – those more open to financial risks may be inclined to remember fraud approaches, while those who would not conceive of taking such risks quickly forget them.
  • Younger adults are more likely to receive fraud attempts than elderly persons.  Again, this may reflect selective memory, as older adults are more likely to forget negative emotional information (Charles et al, 2003).

It is possible that risk-taking behavior, rather than attitudes toward such behavior, is more significant.  This research suggests that the single greatest determining factor in whether someone will be taken in fraud is whether that person was approached in the first place.  All other demographic and personal characteristics have significantly less predictive power.

Author Abstract: Victimology theory recognizes that the characteristics, attitudes, and behaviors of potential victims influence the likelihood of criminal victimization. An important question for victimologists is whether potential victims put themselves at risk by engaging in risky behavior or whether victimization is primarily a result of bad luck. While this question has been investigated extensively with respect to street crime victimization, little attempt has been made to apply it to victimization by fraud. This article investigates the influence of attitudes toward financial risk taking on the likelihood of fraud victimization. Using data from a telephone survey of 400 randomly sampled respondents, we find that age and attitudes toward financial risk taking are significantly related to the likelihood of attempted victimizations but not to successful victimizations.

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Forewarnings of Influence Appeals: Inducing Resistance and Acceptance

Authors: Jeffrey M. Quinn & Wendy Wood (Texas A&M University)

Publication: Resistance and Persuasion. Ed. Eric S. Knowles & Jay A. Linn. Lawrence Erlbaum Associates, Publishers

Year: 2004

Focus Area: Persuasion, Resistance, Prevention

Relevance: Fraud prevention interventions frequently depend on forewarning individuals of persuasive dangers.  This chapter details how those warnings can influence a person either towards increased vigilance or towards increased susceptibility, depending on the context and manner of delivery.

Summary: Warnings may or may not create greater resistance, depending on the context and the information provided.

In order to maximize a person’s resistance, practitioners’ warnings should:

  1. Point out the possible threat to the person’s attitude.
  2. Not jeopardize the person’s self-image.
  3. Encourage thinking about specific aspects of the issue, including the potential repercussions of the threatening message.
  4. Be delivered free of distractions.

On the other hand, a forewarning may increase susceptibility if emphasis is placed on a person’s gullibility.  If recipients are concerned about losing face, they may preemptively agree with the persuasive appeal in order to minimize the later change (e.g., “It’s not persuasion if I agreed already!”).

Author Abstract: According to conventional wisdom, “forewarned is forearmed.” That is, warning of an impending request allows people to prepare for it and ultimately to resist it. For instance, advance knowledge that a telemarketer is about to call and deliver an unwanted sales pitch or that a friend is about to ask a burdensome favor should allow the target of such appeals to mount a successful defense. The idea that warnings generate resistance also is evident in reviews of persuasion research, which typically discuss forewarning effects along with other resistance techniques (e.g., Eagly & Chaiken, 1993). The assumption that warnings yield resistance can also explain a common practice in psychology experiments on attitude change. Experimenters often avoid warning participants of an impending persuasive communication, presumably to maximize participants’ susceptibility to persuasion (Papageorgis, 1967, 1968).

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Investor Fraud Study: Final Report

Authors: The Consumer Fraud Research Group, for NASD Investor Education Foundation

Year: 2006

Focus Area: Persuasion, Profile

Relevance: Successfully preventing fraud depends on both understanding the techniques of fraudsters and identifying who is vulnerable to which types of fraud.

Summary: This study examines the characteristics of different types of victims and fraudsters’ tactics by  reviewing transcripts of fraud pitches and conducting interviews and phone surveys of lottery and investment fraud victims (165) and non-victims (150).

Fraud tactics:

  • source credibility (claiming to be from a legitimate business),
  • phantom fixation (tantalizing with wealth and riches), and
  • social consensus (claiming others are already investing successfully), along with many other methods from fear to friendship, tailored to any given audience.

Victim profiles:

  • Investment fraud victims were more often married men with higher educations and incomes, and with greater financial literacy than non-victims.
  • Lottery fraud victims were more often widowed women over 75, living alone and with strong religious feeling.  They were also more likely to feel that they “have not gotten what they deserve out of life” and “should live for the moment.”
  • Both investment and lottery victims were more likely to have experienced more difficulties and negative life events, relied on their own judgment rather than a professional’s opinion, were more open to sales pitches, and demonstrated “low persuasion literacy.”

Author Abstract: A multifaceted inquiry of consumer fraud analyzed undercover tapes of fraud pitches and surveyed victims and non-victims to determine how they differ. Tape analysis revealed con criminals customize their pitch to match the psychological profile of the victim and use a complex combination of influence tactics within each pitch to persuade. Investment fraud victims demonstrated a better understanding of basic financial literacy than non-victims. Both investment and lottery victims were more likely to have experienced a negative life event unrelated to their fraud experience. Both victim types were more likely to listen to sales pitches from unknown sales persons. Investment and lottery fraud victims both dramatically under-report fraud. It is recommended that 1) Financial literacy and fraud prevention efforts be broadened to incorporate greater emphasis on spotting and resisting con criminals’ persuasive tactics; 2) Encourage more reporting of illegal activity to law enforcement and 3) Conduct more research to develop a vulnerability index and test the effects of persuasion education as a deterrent to fraud.

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Investigating Vulnerability and Reporting Behavior for Consumer Fraud Victimization : Opportunity as a Social Aspect of Age

Authors: Judy Van Wyk (University of Rhode Island) & Karen A. Mason (Washington State University)

Publication: Journal of Contemporary Criminal Justice

Year: 2001

Focus Area: Profile, Aging, Decision-making

Relevance: Successfully arming people against fraud victimization requires understanding not only who is victimized, but why they are vulnerable.

Summary: This study analyzes the connection between fraud victimization, age, social activity, and risk-taking.

  • Younger adults are known to be more vulnerable to fraud than older adults: there is a 77% chance of being victimized between the ages of 18 and 24, and only a 44% chance for those between 65 and 74 (Van Wyk & Benson, 1997).
  • The authors investigate whether this is due to greater socialization and risk-taking at a younger age.
  • While both socialization and risk-taken strongly correlate to fraud victimization, they do not predict vulnerability more accurately than age.  This suggests that other aspects of youth aside from social engagement and risk-taking contribute to younger adults’ vulnerability.
  • Neither fraud victims’ social involvement nor their tendency to take risks affect their likelihood to report fraud.

In conclusion, being younger is a more reliable predictor of being a fraud victim than greater social involvement or a tendency to take greater financial risks.  While these two elements may partly explain younger adults’ vulnerability, additional factors still need to be investigated.

Data for this study was collected via a 1994 random telephone survey in Knox County, Tennessee, which correlates with other, similar studies (Titus et al. 1995, Boyle 1992).

Author Abstract: This study investigates vulnerability and reporting behavior for victimization by consumer fraud. Because socialization may increase the amount of contacts with others, contributing to greater opportunities for victimization, we predict that people who socialize more often may increase their likelihood of victimization.  Greater levels of socialization are also predicted to increase the likelihood of official reporting behavior for consumer fraud victimization because victims may depend on others for guidance in official reporting. The authors found support for the first prediction, but not the second. Although socialization does increase the likelihood of victimization, the authors found it to have no effect on official reporting behavior. These findings shed some light on the disparity between self-reports and official reports of victimization by consumer fraud.

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Instilling Resistance to Scarcity Advertisement

Authors: Savia A. Coutinho and Brad Sagarin, Norther Illinois University

Publication: Studies in Learning, Evaluation Innovation and Development

Year: 2007

Focus Area: Decision Making, Emotions, Prevention, Persuasion

Relevance: Reducing the incidence of fraud depends in part upon reducing the public’s susceptibility to the tactics of fraudsters.  People are more vulnerable when they deny their own vulnerability.

Summary: This article expands on previous work (Sagarin et al 2002) investigating how to train people to detect and defend against unscrupulous persuasion methods.  The study focused on developing resistance to the use of illegitimate scarcity tactics by dispelling illusions of invulnerability.

  • Subjects of the study were either assigned treatment or left as controls.  Those who were assigned treatment were either a) demonstratively shown that they had been misled by advertisements, b) told that some advertisements use scarcity techniques illegitimately, or c) told of the illegitimate techniques and asked to rate the extent to which they were convinced by a set of advertisements.  Subjects were then provided with two rules for discerning legitimate from illegitimate scarcity tactics, and asked to record their responses to the advertisements.
  • Subjects who had experienced the feeling of being misled were substantially more resistant to subsequent illegitimate scarcity tactics.
  • Reducing this “illusion of invulnerability” has potential benefits in the realms of health and safety, as individuals typically perceive themselves as less vulnerable to illness, disease, infection, and other negative consequences than the population in general.

Author Abstract: This study examined the effectiveness of instilling resistance to scarcity advertisements among college students. Participants, who were undergraduate students enrolled in introductory psychology classes in their first year of college, were taught the distinction between legitimate and illegitimate uses of scarcity in advertisements through constructivist learning theory-based training. Following Constructivist Learning Theory which suggests that direct experience is a powerful learning tool, some participants had their vulnerability to deception demonstrated to them by unambiguously showing them that they had been misled by illegitimate scarcity advertisements. Other participants only read about how to distinguish illegitimate from legitimate uses of scarcity in advertisements. Results showed that participants with direct experience of demonstrated vulnerability found the advertisements to have manipulative intent and to be unpersuasive. Results suggest that Constructivist Learning Theory-based programs can effectively train students on identifying illegitimate scarcity advertisements; such training in schools and colleges may help students become critical thinkers.

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