Criminals who commit investment fraud have many strategies for converting prospects into victims.
Researchers describe those strategies in a study based on an analysis of 128 tape-recorded conversations involving fraudulent sales representatives along with a comparison of 150 investment fraud victims and 165 non-victims.
The authors of the study, which was released by the NASD Investor Education Foundation, Washington, found that investment fraud criminals used an average of 8.6 persuasive tactics per conversation transcript.
“The effect of multiple tactics is to put the victim in a kind of psychological haze that somehow changes what might otherwise be a normal ability to spot and resist persuasion,” the authors of the study write.
The most common psychological tactics used by fraud criminals were credibility, phantom fixation, and social consensus, the researchers report.
The researchers compared lottery ticket fraud and investment fraud to learn how fraud criminals tailor conversations to fit intended victims.