Column:  Scam victims aren’t dumb; they’re human

Melinda Clarke received a call at her West Covina home the other day giving her the good news: She’d been selected to receive a $7,000 grant from the federal government, no strings attached.

“It wasn’t for anything specific,” Clarke told me. “I was just being awarded the money.

“They knew my name,” she pointed out. “They knew where I lived. It seemed possible.”

Possible but, needless to say, unlikely.

The government-grant scam is just one of numerous rackets being run on consumers lately. It typically involves a request for your Social Security or bank account number so funds can be transferred.

Or you might just as easily receive a call from someone claiming to be with the Internal Revenue Service or Justice Department saying you owe back taxes.

I got a call last weekend from someone professing to be a Microsoft technician. He said he was doing me the courtesy of helping debug my computer after a random check by the software company revealed that a virus had slipped into my system.

The IRS and Justice Department scams are targeting your cash. The Microsoft scam, which will involve your being duped into downloading an actual virus, is going after your personal information.

It’s fair to wonder, who falls for this stuff?

“That’s the magic question,” replied Marti DeLiema, a postdoctoral fellow at Stanford University’s Center on Longevity who focuses on financial fraud. “The answer is, there’s no easy answer.”

She said researchers have found little correlation between a person’s age, say, or financial literacy and the likelihood of that same person being taken to the cleaners by con artists.

For example, it might be assumed that seniors are most easily fleeced because they’re so often targeted by fraudsters. But studies by the Federal Trade Commission have found that older consumers are less likely to be victimized than younger consumers, maybe because they’ve been around long enough to spot a pig in a poke.

Similarly, there are no firm conclusions to be drawn based on gender, race or education level.

“What we’ve found is that different types of fraud work on different profile types,” said Martha Deevy, director of the Center on Longevity’s Financial Security Division. “For instance, investment fraud works best on highly educated men, who think they’re too smart to be scammed.”

One problem with understanding the nature of fraud victims is that many people are embarrassed to report being ripped off, so it’s difficult to draw hard-and-fast conclusions from available data. Nor is it even clear how much financial fraud occurs in any given year.

It’s frequently estimated that between $40 billion and $50 billion worth of fraud is inflicted on U.S. consumers annually. But Deevy pointed out that jailed Ponzi schemer Bernie Madoff was responsible for $50 billion worth of rip-offs all by himself.

The Madoff case is instructional, Deevy and DeLiema said, because it illustrates a key element of successful financial fraud: creating in victims a sense of excitement.

Any rational person would question how Madoff was able to steadily deliver 10% to 12% returns to investors. But those who entrusted him with their money were blinded by a desire not to be left out of a good thing.

“The filter just fails to click in when you’re in a state of excitement,” Deevy said.

That explains why lottery and sweepstakes scams remain so prevalent. People want so badly to believe they’ve won, they work themselves into a state of suspended disbelief. In other words, they do the scammer’s work for him.

Fear is the other great motivator in scams — a belief that if you don’t act, you’ll find yourself in serous trouble. The IRS scam relies on this emotion, as does the so-called grandparent scam, in which the victim is told that a relative will suffer in jail unless bail money is immediately wired.

“If you’re in a state of emotional arousal, you’re more likely to say yes to things,” DeLiema said. “That’s what the fraudsters are trying to achieve, that state of excitement where you’re not thinking clearly. It eclipses your rational thinking.”

If a scammer has your name, address and phone number, they likely were obtained as a result of a corporate or public-sector database being hacked. But by stating your full name and address, the scammer creates an instant aura of authority, heightening your sense of excitement or fear.

The best way to protect yourself is to take a step back.

“Distance yourself from any decision,” advised Deevy. “If the fraudster is demanding an immediate decision, disengage.”

DeLiema added that it’s always prudent to seek the advice of a friend or family member — especially if the scammer has insisted that secrecy is crucial. Usually you’ll see things for what they are as soon as you lay it out for someone else.

It’s also important not to make things easier for con artists, who will probe during phone calls for weak spots — a job loss that suggests money troubles, say, or concern about a loved one.

Clarke wasn’t taken in by the bogus grant offer. As we chatted, though, I discovered she’s a bit of a scammer herself. That is, she indulges in a little harmless trickery with others.

Clarke works at Disneyland, ushering visitors into Tomorrowland’s Star Tours and Astro Orbiter rides. If she does her job well, people’s excitement is increased, enhancing their sense of wonder and adventure.

“I watch the faces of the children,” Clarke said. “I’m watching for their smiles.”

Why do people fall for scams? Because, whether they know it or not, they want to.

David Lazarus’ column runs Tuesdays and Fridays. he also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.