When it comes to scams, most people have the same reaction: “I’d never fall for that.” We like to think we’re too smart, too cautious, or too experienced to be tricked. Yet, year after year, people lose billions of dollars to fraud. The truth is, why people fall for scams has less to do with gullibility and more to do with how skilled scammers are at manipulating human psychology.
The Illusion of Invulnerability
Believing we’re immune to scams is part of what makes them work. Psychologists call this optimism bias: the tendency to think bad things happen to other people, not to us. But scammers exploit universal traits —trust, fear, curiosity, even kindness. Whether it’s a convincing email, a fake investment opportunity, or a phone call from someone pretending to be your bank, the tactics are designed to catch you off guard.
The Numbers Don’t Lie
According to the FBI, Americans reported losing over $16 billion to scams in 2024 alone—a record high. These losses cut across every demographic: retirees, young professionals, and even tech-savvy individuals. Fraudsters don’t discriminate; they target whoever answers the phone, opens the email, or clicks the link.
Why People Fall for Scams (Even Smart People)
Scams have evolved far beyond the poorly written emails of the past. Today’s fraudsters use personal data, official-looking websites, and even artificial intelligence to sound convincing. Many victims describe the experience as being caught in a moment of stress or distraction. A sense of urgency— “act now, or you’ll lose everything”—is often enough to override good judgment.
Breaking the Stigma
One reason scams remain so effective is shame. Many victims never report what happened, fearing they’ll be judged as careless. This silence only helps scammers. The reality is that being scammed isn’t a reflection of intelligence; it’s proof that these schemes are designed to fool even the most careful among us.
Protecting Yourself and Others
The best defense against scams isn’t assuming it won’t happen to you—it’s staying alert. Slow down before acting, verify the source of unexpected messages or requests, and talk openly with friends and family about scam attempts you’ve encountered. By normalizing these conversations, we reduce stigma and help each other avoid costly mistakes.
The Adviser Factor
Working with the right financial adviser can be a tremendous asset in fighting against scams. A qualified adviser will receive training on common signs to watch out for and will ask additional questions if something sounds suspicious. When you build a relationship with your adviser, they understand your typical behavior and are likely to notice when something seems off. They’ll also likely be able to tell you when it may be the right time to start including your power-of-attorney in more of your financial decisions. Financial advisers can act as a crucial layer of defense, especially for older clients or those who may be more vulnerable.
The bottom line:
No one ever believes they will be the victim of a scam, but many people fall for scams every single day. Acknowledging this reality isn’t a sign of weakness; it’s your greatest defense.
