Here's why even the smartest Singaporeans fall for money scams

Scams in Singapore have more than doubled in 2015. Why do the most educated Singaporeans still fall for them?

why even the smartest singaporeans fall for money scams

Image: Fabio Formaggio/123rf

Digital fraud is on the rise in Singapore. From sex-for-credit to the DHL scams, otherwise intelligent Singaporeans seem to be easy targets. What makes our well-educated, rational society vulnerable to these con men?

The answer may lie in the fact that context, not intelligence, determines our susceptibility.

The Rise of Digital Scams in Singapore

In July this year, Minister for Home Affairs K. Shanmugam informed parliament that social media and phone scams have more than doubled. The number of cases has risen from 1,015 in 2014 to 2,450 in 2015.

Scammers go where they find they easiest marks. Unfortunately, these numbers suggest scammers find Singaporeans to be a fairly easy target.

While many assume it’s senior citizens who are easy marks, this is actually untrue. Some 67 per cent of scam victims are aged between 20 and 49. Many of them are skilled, highly educated professionals.

Here are some reasons why even the smartest Singaporeans can still be a scam victim:

1. Most Singaporeans Never Had to Be Suspicious of Authority

Singapore is one of the least corrupt countries in the world. Bribes and extortion are rare in the ranks of the police, judges, various ministers, etc. As such, most Singaporeans have never had to be suspicious of authority figures.

Many scams take full advantage of this. The DHL scam involves convincing us that we’ve broken laws by trying to import fake passports. Email phishing scams claim to be from government ministries, requesting important information.

Trust disarms intelligence. When we are on guard, we will think hard about requests for money or bank account details. But intelligence is “switched off” when we operate on trust. We don’t think to question the person demanding things of us, so our analytical skills and education aren’t used.

The only cure will come from building a healthy skepticism. Our low corruption levels have made us complacent for too long.

2. Immediate Social Context

Why is it that usually brave people can be cowards at times? Why do savvy bargain hunters fall victim to false sales every now and again?

The secret is in the timing. Con-artists know that there are always moments when we let our guard down. The following situations make us more vulnerable to scams:

  • Recent and significant financial loss
  • Being in debt
  • Being unemployed
  • Feeling isolated or lonely

This is why sex-for-credit scams and investment scams work so effectively. They are offering (fake) products and services to us, at a time when we need them most. Someone who is lonely will latch onto anyone who pays them attention, and someone who is in debt will be eager for any means of escape.

Rational thought and education cannot provide a defence if our eagerness for what’s on offer overpowers them.

3. Believing We’re Too Smart to Be Scammed

Institutes like The Fraud Research Centre have discovered that being smart and educated can make you easier to scam.

Consider someone who knows very little about finance, being convinced to make a bad investment. They will be uncertain and hesitant – with a bit of effort, they could be persuaded to rethink their choices. They know that they don’t know.

But consider what happens if a seasoned investor, or someone with a finance degree, is convinced to make a bad investment: they are armed with multiple theories about why they are right, and will likely dismiss warnings by other non-experts.

The key is to at least consider third party perspective. Even if we have expertise, it’s worth listening to someone else’s take.

4. Sunk Cost Fallacy

In many scams, the process is drawn out. First they ask for $100, then $500, then $5,000, and so on. While there are many periods where the victim starts to question things, they still don’t stop shelling out money.

The reason is the sunk cost fallacy. We believe we cannot stop now that we have put so much money into it; otherwise, all that money paid is wasted.

With online love scams, it is about than money; victims are also emotionally invested. They have already made plans about their future with an imaginary partner. It is difficult to give up on that when they have spent weeks or months dwelling on it. This is why the scam victims, even if they suspect it’s a scam, will hope against hope that it’s not.

Learning to save and invest is often difficult. But it takes greater self-control to cut losses when necessary.

5. Fatigue and Ego Depletion

Human beings have a limited store of willpower. If you are using all your will to control your diet, for example, you often find it harder to concentrate on things like work or playing the piano. There are, in effect, a finite number of things we can be disciplined about.

Singaporeans live extremely busy lives, with a large number of commitments. In fact, if you’re smart and at the peak of your career, you probably have more commitments than most. People in senior positions of responsibility, or who have had an exhausting day at work, often suffer fatigue or “ego depletion”.

Ego depletion is the process by which we become more impulsive and less thoughtful, because our mind is occupied with something big. For example, think of how you are more prone to shout at a child if you’re in the middle of fixing your computer.

As such, people who are stressed and busy tend to become more impulsive. Singaporeans work some of the longest hours in the world. Many of us fall prey to scammers because we are distracted and fatigued all the time, and our defences are down.

The key is to take time. When confronted with unusual requests, we should refuse to respond right away.

If someone claims they caught you buying drugs or downloading illegal things, put down the phone and think about it. Give yourself at least an hour. This can be hard to do (especially if they threaten to have kidnapped someone), but time will allow your brain to refocus.


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43 Money 13 Lifestyle

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