Inside the Mind of a Scammer: 10 Tactics Used to Trick Your Members


Many people think they have the wherewithal to avoid scam traps, but what they may not realize is how scammers take advantage of human psychology to craft clever schemes that prey on victims’ vulnerabilities – especially during challenging events like COVID-19 – such as financial hardship, fear and confusion.

Here are 10 common tricks that scammers keep in their arsenal to attempt to fool your members and commit fraud.

  1. Creating fake emergencies. Scammers will pretend to represent an official organization (like the IRS) and call, text or email members to demand money on the spot for bogus issues. They will use threatening phrases such as, “Your 401k plan will be frozen,” “Your passport will be seized,” or “The maximum sentence for this crime is five years in prison and a $10,000 fine,” to catch victims off guard and create a sense of urgency to resolve the issue.

  2. Expressing that resistance is futile. Once the scammer has created the emergency and instilled panic, they will reinforce that there is nothing the member can do to resist the situation. In the case of an IRS scam, they will often tell the member they must cooperate or face arrest or fines.

  3. Rewarding cooperation with encouraging and friendly comments. Scammers will also try to play the part of a trusted friend, offering help and a way out of the emergency that would provide relief to the member. They will often tell the member that they seem like a good person and are willing to help them out with this situation.

  4. Not allowing victims to hang up until they pay up. Phone scammers will say it is a one-time opportunity for the member to take action to avoid risking consequences, and if the member hangs up the phone, they will not be offered another chance to resolve the matter.

  5. Using official-sounding titles and names for everyday things. Scammers will try to sound impressive to gain members’ trust to pay up. They will use official-sounding titles and names for merchants and everyday items. Examples include referring to a gift card as an electronic federal tax payment system, or instead of using the name of a store, they will call it a government-affiliated payment processor.

  6. Stating that they are not asking for personal information upfront. Scammers know that asking for personal information could raise alarm bells for the member. Instead, they may say that they are not looking to obtain this information, or that they are not looking for an exchange of funds over the phone, which could cause members to let down their guard about the legitimacy of what is being said. This is why scammers often use gift cards to extract payment from members.

  7. Signaling to members that they are being recorded. In attempt to sound legitimate, scammers will tell a member that the call is being recorded and monitored by the IRS.

  8. Threatening to alert the media. Scammers will go to great lengths to keep suspicious or wary members on the phone, and even go so far as to threaten to contact the media on behalf of the IRS about publishing the case, if the member does not comply with what is being asked. This is used as a last resort to salvage a conversation that might not be going well with the member.

  9. Exploiting members’ engagement. Once the scammer has a member hooked, they may transfer the call to another fake agent, in an attempt to further legitimize the call. Often, these scamming “call centers” will employ multiple scammers to work together to make the initial call and then close the scam. Scammers are highly organized and some are responsible for getting members hooked, while others focus on closing the deal by extracting the payment from the member. They may say, “Please hold on the line, I am transferring the call to my senior treasury specialist,” or “Thanks for waiting, this is senior officer Matthews from the account department. My badge ID is…”

  10. Insisting that members keep quiet about special offers. If a scammer offers a special tax break, for instance, they will often demand that the member not discuss it with anyone, as that would prevent them from getting the settlement. They may even mention that includes credit union or retail staff.

Keeping Your Members Ahead of Fraudsters

Education is the best way to help protect your members from these common scam tactics. It may sound trite, however, a recent Javelin study found that 80% of people in the U.S. who are informed about a scam will disengage in it; and of those who do engage at first, 40% will disengage when they realize it’s a scam.

It is also good practice to educate your credit union staff so they are prepared to assist members who may have been targeted by scammers. Encourage members to report scams as soon as they occur and visit the website for information on reporting scams and fraud.

David Ver Eecke is a Senior Fraud Product Manager at PSCU. David knows that the cooperative nature of credit unions provides a unique advantage when it comes to stopping fraud. When he isn’t working on products to increase payment security for credit unions and wage war against fraudsters, he finds time to write about topics on risk and fraud. David has worked in the financial services industry focusing on fraud and risk for over seven years.

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