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Greed, fear and digital scams: When common sense logs out

If you think you’re too smart to get scammed, think again. Every day, some smart and educated people are losing very real money — thanks to a variety of innovative (and sneaky) scams.

A good number of these are based on simple trickery. They will send you payment renewal links, subscription messages, emails from your boss, whatsapps from your friends – all of which appear legitimate. And if you click, before you know it, you will lose some money. These are the modern-day equivalent of petty thieves or pickpockets.  Not much you can do except be careful and suspicious!

But there is another class of scams that are elaborate (indeed, fantastic!) hoaxes, which can continue for days. These don’t depend on digital trickery, but are fed by the victim’s own emotions – fear and greed.

One person I know lost money to what is commonly known as the “FedEx” scam – nothing to do with the real FedEx. Essentially, they receive a call informing them that drugs or other contraband have been traced to them, and they are now in trouble for smuggling. Through an elaborate make-believe, fake cops talk to them on a video call, and people actually fall for it. And to the tune of many lakhs, or even crores! The person I know lost around tens of lakhs before she realised it was a scam. So scared was she – that she did not even contact family or friends. 

These so-called “digital arrest” scams now cover all types of serious crimes, and the recipient is made to believe they are in trouble for a crime they did not commit. This often goes on for days, even weeks, and large sums of money are sent to multiple, unknown accounts.

These scams work because they convince the victim not to communicate with others. And people listen to them! Somehow, they are so scared and fearful that they lose their common sense.

What I cannot understand is why anybody would be so scared if they were innocent?

But if fear can empty your wallet, greed can vaporise your bank account. The most common are stock market and investment scams. A “credible” person promises huge returns, starts with a small amount, shows super-normal returns (on a fake website) and then the victim is hooked. When they attempt to withdraw their winnings, they realise it’s not possible and they have been hoodwinked.

Ultimately, it’s extreme greed that fuels this. If it were so easy to make 100% returns on the stock market, why would anyone work?

People intrinsically know that super-normal returns are not sustainable. Yet they are ready to believe that some random stranger on social media has developed a foolproof system that all the great fund managers and investors have not been able to.

It’s simply not possible for governments, regulators and police to stop such scams. Each individual has to be aware, keep a cool head – and avoid being too fearful or too greedy. And if in doubt, phone a friend!