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Book Review - Weapons of Fraud A Source Book for Fraud Fighters


Weapons of Fraud: A Source Book for Fraud Fighters

Anthony Pratkanis and Doug Shadel

Reviewed by Colleen Russell, LMFT

All of us, at some time in our lives, have wished for that magical solution to our problems, whether it be money, a new car, or an extended trip to a faraway land. As Jiminy Cricket sang, “When you wish upon a star, makes no difference who you are, anything your heart desires will come to you.” Our desire for an easy solution that will make our dreams come true increases our vulnerability to exploitation and devastating loss.

Weapons of Fraud, A Source Book for Fraud Fighters, by Anthony Pratkanis and Doug Shadel, provides a disturbing but fascinating study of social-influence tactics that common criminals use in fraudulent telemarketing techniques. According to research conducted in several statewide surveys around the country, these methods have victimized 26 percent of the entire U.S. adult population at some point in their lives. Every year, these victims, 57 percent of whom are over the age of 50, lose a total of $40 billion to telemarketing fraud alone, according to a 2001 AARP survey.

Basing their research on a social psychology model, the authors’ primary focus is to educate seniors about fraud and how to protect themselves. As a licensed psychotherapist specializing in cult recovery, and a former member of an “Eastern” cult in the ‘70s, I believe that Weapons of Fraud has a broader appeal: to educate those who have been significantly affected by cultic groups or relationships. Reading this book and listening to its attached CD of actual recordings of “con criminals” (the term the authors use rather than “con artists”) at work, I recognized that the social influence tactics employed are akin to those used by some cult leaders. Con criminals might pose as CEOs, entrepreneurs, employers, even cult leaders. Regardless of the role these criminals take—supposed officials promising a $250,000 cash award, or self-proclaimed “spiritual masters”—they work to establish trust with the victim, make the pitch seem legitimate, and close the deal, thus exploiting basic human nature. We instinctively want to trust those who seem to be “friends,” to expect honesty and concern from those in our social group, to believe authority figures, and to take advantage of a rare or time-limited opportunity.

The authors of Weapons of Fraud studied 645 undercover audiotapes of telephone communications between “con criminals” and undercover investigators who posed as elderly victims who had fallen for multiple scams and had received numerous calls each day. Many of the chronic victims were retired women, often widowed, aged 70+ who lived alone. These recurring victims respond to any and every type of phone and mail solicitation, and they are unable, or unwilling, to stop answering the phone and writing the checks. Friends, family members, and professionals are often highly frustrated when they try to influence the victims’ behavior because their thought and behavior patterns and/or cognitive impairments make change difficult. The defrauded use the psychological defenses of denial and rationalization to protect themselves from making the painful admission that they are victims of scams and have actually lost most, if not all, of their money.

These defensive behaviors may involve the following: The more you do something and the more committed you are to believing it’s helpful, the more you need to defend its helpfulness (even when confronted by facts to the contrary) in order to justify having done it in the past and continuing to do it in the future.

In reading the above, I’m reminded of my own process in extricating myself from the cult in which I was involved, and discovering the fierceness with which remaining or newly recruited members defended the cult, despite clear evidence of the leader’s deception. And I’m aware of the deep emotional pain of my clients who seek professional help to recover from their cult experience or to help loved ones currently controlled by cultic groups or cultic relationships. With cons and cults, “it’s all about the money.”

Cautioning the reader that anyone and everyone can become a fraud victim, Weapons of Fraud demystifies and unravels how even the most “street smart” person can be taken for a ride. One of the main ways con criminals succeed is by creating a “phantom” or “wonderland of the mind,” and what social psychologists call “the power of the situation.”

These terms refer to an artificial situation or a fantasy of something that people want but can’t have. An example is what occurs when passengers board a boat at Disneyland’s popular “The Pirates of the Caribbean” ride. Each person is quickly taken to a different time and place where “it’s a pirate’s life for me.” As they listen to the pirates singing, and they observe all the details, these newly recruited “pirates” focus on the ride—what is inside the situation—and do not concern themselves with the rationality of their experience. Social psychologists have found that, in such artificially created situations, people will do things they wouldn’t ordinarily do. Although the entertainment at Disneyland is harmless, the situation created by a fraud criminal can be disastrous.

An elderly woman who was part of the book’s study had lost $300,000—her life savings—about 18 months after she responded to her first fraudulent sweepstakes mailing. She had been encouraged to buy merchandise to increase her chances of winning the big prize. The mailings, which contained pictures of others who had won “big money” seemed compelling. Soon she was spending almost every minute of every day involved in sweepstakes activity, responding to a huge volume of sweepstakes-related mail and answering 12 to 15 phone solicitations a day. She didn’t think she was sending money to a criminal; she thought she was participating in a legitimate game of chance that would increase the size of her nest egg.

My gut tightened as I listened to the recorded abuse of an investigator posing as an elderly victim while the con executed what the authors call a “Free Prize Pitch.” (Social-influence tactics are in bold type in the following descriptions.) The criminal uses an artificially created situation, or phantom, for a woman who has been victimized in multiple scams: He promises her a $50,000 cashier’s check. Next, he uses fear and intimidation, authority, and scarcity tactics. He warns her that he is the person who allocates the awards, and if she doesn’t comply with him, he will give the award to someone else. He doesn’t reply directly when she asks, “What does it cost me?” Instead, he threatens that she must be “courteous and kind with me, as I’m certainly set out to do with you,” or her $50,000 check is going to someone else. The criminal profiles the victim, or collects information to ascertain what money is available to her. He uses the tactic of reciprocity in telling her that her taxes on the prize will be covered, and she must cover the bonding, insurance, and registration fees before she will receive the money. The con criminal feigns friendship (I’m on your side), saying he will take care of her, and he alternates this tactic with fear and intimidation:

I need some cooperation from you. And if I don’t get it, you’re hurting yourself. This is enough money for you to set up anybody that you care about and go to your grave knowing that you went and did the right thing, and you can go and meet God with a clear conscience. Now what do you want to do? Do you want your winnings? Or do you want me to just go ahead and hang up the phone with you and forget I ever saw your name?

Coincidentally, I recently saw a film of a cult leader using the same tactics toward a member, alternating kindness and threats, manipulating through the phantom or “wonderland of the mind,” using her “special status to assert her authority over the member’s life. I was struck by the similarity between the bullying and ridiculing tone of the con criminal and that of the guru.

Imploring victims of fraud not to blame themselves, the authors of Weapons of Fraud remind us to have compassion for ourselves: “It is not something you did, but something the criminal did to you.” They provide readers with ways to avoid victimization: 1) Don’t divulge personal information for a contest. This information could become part of a list to be sold online to other con criminals. 2) Firmly tell telemarketers you don’t want to talk to them, and hang up if they persist. 3) Don’t send any money for trinkets or for taxes on the “big prize.” 4) Be aware of social-influence tactics as weapons against fraud. And 5) learn the Seven Scam Types listed below:
Investment Scams: Scams in which the con is attempting to get the potential victim to invest in a new company, technology, Website, movie deal, and so on.
Coin Investment Scams: Scams in which the con is selling the victim gold coins as an investment. Usually the victim receives the coins; however, the con greatly exaggerates their value, and the victim pays considerably more than the coins are worth.
Reload Scams: Scams in which the con claims that he or she can recover money that the victim previously lost to fraudulent companies. The victim is responsible for paying “taxes” or “fees” for this service.
Credit Card/Identity Theft Scams: Scams in which the con offers protection from identity theft or from credit-card theft. Usually, the protection covers only fraudulent charges to credit cards or unauthorized bank transactions. The purpose of these scams is for the con to obtain the victim’s credit card numbers, banking information, or Social Security number to use in making unauthorized bank withdrawals or credit-card charges.
Sweepstakes Scams: Scams in which the con claims the victim is the winner of a sweepstakes contest; prizes may be cash, cars, vacations, electronics, jewelry, and so on. Usually, the victim must pay “taxes” on the prize or make a purchase from the company. In many cases, the victim may receive a prize that is considerably less valuable than the con originally claimed.
Lottery Scams: Scams in which the con criminal sells tickets to play in lottery clubs. In these clubs, the victim plays a set of numbers with a number of other players. The con misleads the victim on the odds of winning and the amounts to be won. If there are winnings, they are split between all members in the club and are therefore usually very small amounts (sometimes less than $1.00).
Travel Scams: Scams in which the con is offering various travel packages. These packages usually involve a one-time fee, and frequently the packages cover either airfare or hotel, but usually not both. In cases when both are covered, the victims have to attend an information session about some type of time-share opportunity while they’re on the vacation. The scam sometimes involves taking the victims’ money and never providing any benefit at all.

Weapons of Fraud provides vital information about social-influence tactics that can be used to sell a vacation or a lifestyle. and it clarifies how people can be vulnerable to common scams while it offers potential victims concrete ways to protect themselves.

Cultic Studies Review, Vol. 7, No. 1, 2008, Page