How and why scammers fool us at great cost – and what to watch out for
Advice Lab, Behavioral Science Specialist
- Scammers often use “social engineering” to convince people to share information or allow access to accounts or personal information.
- Anyone can fall for these tactics, and community can be a powerful defense – use trusted friends or family members and resources on your side.
- Have a plan: “Stop, drop and call.” Stop what you’re doing, do not engage and call a trusted source using verified numbers.
By Deepti Nagulapally and Michelle Maratto
As technology has brought many positive changes into our lives, it’s also brought a new danger: cybercriminals can use technology to deceive people. They often gain a foothold with “social engineering” – convincing someone to share information or to allow access to their accounts.
Seniors who may not be as familiar with newer technologies and who can be more trusting of official-looking communications are often targets. Scammers will try to lull their chosen targets into a false sense of security in sharing information. From there, they excel at making them feel isolated and under pressure.
Anyone of any age or background can fall for these tactics and get scammed. While this may be unsettling to hear, it’s important to know that community can be a powerful defense. No one needs to face scammers alone, and you have resources and people on your side. Your support network can include trusted friends or family members, as well as your J.P. Morgan Advisor.
With this overview of the dangers and defenses in mind, let’s take a look at how two common types of scams can work in practice.
The unseen thief: phishing and impersonation scams
Here’s a fictional example: Jane, a retired CEO and entrepreneur, enjoyed being a benefactor to her favorite charities. She managed her wealth carefully to ensure her family’s prosperity, provide a comfortable retirement and support charitable causes.
One day, Jane received an email that seemed to be from a reputable charity she had supported in the past. The message appeared sincere yet urgent, detailing a new program aimed at providing immediate relief to communities affected by a recent natural disaster. The email included compelling stories and images of those in need, tugging at Jane’s heartstrings.
The charity was launching a campaign where every dollar contributed would be doubled by a group of anonymous benefactors. It included links to a website with testimonials and endorsements. Moved by the cause and convinced of its authenticity, Jane decided to make a significant donation. She entered her financial details into what appeared to be a secure portal.
The portal was part of a sophisticated scam, designed to steal funds directly from her account. The financial impact, though buffered by her overall wealth, disrupted her philanthropic plans, requiring a strategic reevaluation. Afterward, Jane felt betrayed and vulnerable, questioning her judgment and the integrity of the charitable world she had long supported.
She’d fallen for a sophisticated phishing email scam. These scams tend to be extremely detailed and can be very convincing. Phishing scams may pose as tech support, JPMorganChase employees, government officials or relatives in distress, as well as fake investment schemes and sweepstakes. Other scams include romance scams, robocalls and a host of others that attempt to steal money and personal information.
Or take another fictional example: Gerald, a retired engineer who received a call from a major online retailer stating that his account had been misused by criminals and the FBI was looking into the matter. Gerald was skeptical at first, but he slowly became convinced as the retailer provided a case number, identification numbers for the FBI agents and other information that seemed official.
The scammers told Gerald he had to pay a fine or he would be arrested, and they stayed on the phone with him while he withdrew cash from the bank. Only when they asked him to convert his money to Bitcoin did he finally realize he was being scammed. While he avoided financial loss, Gerald felt deeply ashamed he’d been tricked.
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Recognizing how scammers operate
As a first line of defense, here are some approaches frequently used by scammers. Recognizing them can help safeguard your wealth and that of your loved ones.
- “Urgent” requests. Scammers may try to create a sense of panic – saying a grandchild is being held for ransom; a fine or tax debt must be paid immediately; or an investment opportunity must be acted on right away. This puts people in a heightened emotional state, where it is much harder to think rationally and logically or to ask if what they are hearing is true. They may make choices they would never make under normal circumstances.
- You’re David. They’re Goliath. The battle against scammers may not be a fair one-on-one fight. No matter how informed and self-sufficient you are, you cannot on your own match the time, attention and resources that scammers may be investing in their targets. Sometimes, several people will work together and spend considerable time, effort and resources grooming their targets. Only when it’s too late does the victim realize they were tricked by scammers.
- Technology is moving at a rapid pace. Scammers may be quick to incorporate new technology into their schemes, such as using artificial intelligence (AI) to simulate a voice. This is particularly dangerous for people who don’t keep up with technological innovation, and therefore can't identify a sophisticated scam.
- Scammers weaponize trust. Scammers may ask lots of questions to learn someone’s vulnerabilities. They want to know if someone is isolated from their family and likely to be feeling lonely, or if they have a grandchild in another country, making them vulnerable to a fake kidnapping scheme. They can then spend a substantial amount of time and energy building trust with their target, and begin to sow seeds of distrust in the other people in their life. The scammers’ goal is to create a bank of goodwill they can use to eliminate any doubt or questioning when they strike.
- Criminals manipulate emotions. They may create moments of panic, fear, lust and greed, which interfere with brain function and make it harder for people to think rationally and logically. The scammers may use fear and urgency to get people to make decisions they otherwise would not.
- Scams may prey on bias and blind spots. Typical adult responses – including feelings of self-sufficiency – can sometimes work in a scammer’s favor. You may think, “If I were the target of a scam, I would know it.”
Jane and Gerald were emotionally manipulated and failed to recognize their own blind spots. They each assumed they would be able to recognize a scam, so they didn’t consider that the email or phone call might be fraudulent. They trusted what seemed official and acted alone. Let’s go over what they should have done before making a payment. These tactics can have a greater impact on seniors who may be less familiar with newer technologies and/or more isolated.
Have a plan
Whether it’s a suspicious email or an unexpected phone call, knowing how to respond can make all the difference. Here are some immediate steps you or your loved ones can take if you are ever in their position. We call it “Stop, drop and call.”
1. STOP what you are doing
- If you suspect you are being scammed, stop providing personal information immediately and do not send money. Do not click on a link or open attachments.
2. DROP: Do not engage
- It’s always acceptable to abruptly end a call, stop replying to any emails that look suspicious or cease video chatting with someone if you suspect a scam. You are under no obligation to be polite or respond to scammers.
3. CALL a trusted source
- Talk through the situation with a trusted family member or friend. It’s important to have someone offer their support if you think you are being scammed. Only call verified numbers to help ensure the caller and information are authentic.
- Contact your J.P. Morgan Advisor via a trusted number. They are also part of your team, and they can provide guidance and resources to help you protect yourself from a scam and preserve your wealth.
Adopting these habits can help you create a robust first line of defense against potential threats and build up your ability to recognize them – making it more likely you can pick up on future scams. By making these practices part of your daily life, you’ll be protecting your finances and personal data, as well as contributing to a safer digital environment for everyone.
We can help
Don’t wait until it’s too late – we can help. We study the constantly evolving ways scammers operate, and our Behavioral Science team examines how emotions influence decisions – and how to make better ones.
As cybercrime continues to grow, one of the first and best preventive steps you can take is to call your J.P. Morgan Advisor and register a trusted contact person (TCP) on your account. A TCP acts as an emergency financial contact for the firm to call, which adds an additional layer of security and protection.
For more cyber information and resources to better secure yourself, your family and your business, ask your J.P. Morgan Advisor about our Cyber Advisory team, which has the resources to provide guidance.
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Advice Lab, Behavioral Science Specialist
