Callsign, the digital trust pioneer, has published research into the psychology of scams, demonstrating that humans aren’t infallible but technology can help. Estimated to cost the global economy US$5 trillion annually, and despite organizations efforts to warn and educate consumers, scammers continue to be successful.
Detecting scams is hard, and financial institutions and consumer protection groups have attempted to protect consumers with scam warnings and education about the signs to look out for. But with scammers coaching their victims to navigate warning messages and security measures, it’s impossible to rely on just educating victims as a scam prevention method. This is because scams play human fears and create stressed situations. Callsign research mirrors this, finding that four out of five consumers globally have received a scam message. But 50% of Callsign survey respondents claimed it was easy to avoid scams online because it’s ‘common sense’ – the reality is scammers are manipulating victims to act differently.
Psychology studies demonstrate that when people read warnings, they are in what psychologists call a ‘cold state’ – calm and dispassionate, but when they are at risk, they’re in a ‘hot’, stressed or emotional state. In the calm state it is likely people read the warning messages and take note to be careful, but when they are in a hot state, all the advice is forgotten. Our research concurs, with 86% of respondents saying they read scam warning messages, but 58% said they still don’t do anything differently as a result.
“A different approach to fighting scams is required and technology can help. Detecting scams isn’t enough, we need to use behavioral psychology to help nudge people. Blanket warning messages to people in their cold state aren’t effective scam prevention methods, we need to tell people what to do, the moment they need to do it,” says Amir Nooriala, chief commercial officer, Callsign.
Callsign’s dynamic interventions software works by detection, intervention and protection. Software detects when consumers are at risk of being scammed by identifying changes in normal behavioral patterns, which might indicate duress and coaching. Intervention then takes place in real time through contextual, real-time dynamic warnings based on the intelligence and the type of transaction in progress. Finally, the customer can be protected by a change in policy in real time, for example preventing the transaction and the scam taking place. Layering education with good fraud detection, interventions and therefore prevention is key.
“There is a common perception that humans are to blame for online scams, but they are hard to detect and hard to prevent. Humans react and behave in different ways in calm and stressed states, and technology can help to interpret that behaviour and keep consumers safe. The root cause for online scams is technology because service providers are not deploying adequate detection, intervention and prevention methods,” added Nooriala.
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Callsign is at Money 20/20 Europe, please stop by stand B40 for more information and a demonstration of dynamic intervention software.