In the dozen-plus years I have specialized in prosecuting elder financial fraud cases at the Prosecutor’s Office, it has become pretty easy for me to spot and disassemble how the majority of scams work. Like how a master chef can taste a dish and tell you the ingredients he tastes, I can smell a “business opportunity” or a get rich quick scheme and identify the individual parts of it that will reveal it to be an actual scam.
There are always certain ingredients present in a successful con. These elements, or red flags, of a scam can include anything from creating a sense of urgency in the victim, to playing on strong emotions, like fear or joy. The more of these elements present in the con, the more likely the con will be successful.
For example, the lottery scam (where you are told you won a prize but have to pay a fee to collect it or lose it) has a lot of these scam components. First, you are told you won a prize (getting something for nothing and the strong emotion of joy created). You have to keep the winning of the lottery a secret because of “reasons” (secrecy and isolating the victim from seeking advice). You have to pay taxes or a fee very soon before you collect your winnings (create a sense of urgency and the strong emotion of fear of losing your prize). You make a payment, only to be told there are more unexpected payments to be made (fear of losing out on your initial investment — you start chasing your money).
Once you recognize individual components of a deal, it becomes easier to realize when something may be actually a scam as opposed to a deal of a lifetime. The IRS is calling to say you are going to be arrested unless you pay them with a gift card immediately, or you receive a message from someone claiming to be a family member in peril in need of money, aka, the Grandma Scam (sense of urgency, creation of fear and isolating the victim from seeking good advice).
The one main ingredient that all cons seem to share is that the scam artist wants a person to make an emotional decision about money. If you find yourself about to take any action where you are about to give up anything of value and you are doing it in response to a strong emotion, stop, take a breath and see if you can smell any scam ingredients that may be present.