Four Common Stages of a Scam (internet or not) : tease, please, seize, squeeze, using mystery shopping scam as example

How a Scam Works

While a scam can have myriad forms, how they are executed can be boiled down to common four steps:

  • the tease -- to grab your interest
  • the please -- to draw you in, claims to solve your problems
  • the seize -- to "prove" your risk is minimal, and you "can't lose"
  • the squeeze -- to make you give up even more money than you planned

Each of these steps are designed specifically to manipulate your perception of the offer's cost, risk, and reward.

First... the tease.

What is "Priming"?

A mind, when depressed or stressed, tends to see patterns that are not there, and it can be further influenced by "suggestions" on what to look for, as well as get distracted by something easily recognizable such as faces. Magic and scam relies heavily on these factors.

The Tease

The tease is where the offer show you a problem, and implies there is a solution. This is sometimes called a 'backstory'.

An infomercial always starts with some sort of "Did this happen to you?" Even if it did not, you may just think that it could happen to you.

A scam, on the other hand, will start with "Do you want a lot of money?" Or course, it will usually rephrased as "Do you want to be financially independent?" or "Are you tired of the 9-5 rat race?"

They offer a tiny glimpse of the potential, the hook, to keep you engaged, for the next step, the please.

They often give you a few "hints", to "prime" you into a certain perception of the subsequent available information, to distort your reality.

Summary: The tease confronts you with a common problem, illustrates the problem, and implies a solution if you keep watching / listening, by priming you to accept subsequent explanations.

Withholding Info and other tactics

Common scam tactics includes but are not limited to the following:

  • Withhold information (Hidden fees, redemption problems, etc.)
  • Actual costs disguised by multiple payments, upgrades, and so on
  • Bait and switch (show you one thing to hook you, then change the rules once you join)
  • Appeal to emotion (you must help me!)
  • Appeal to greed (you can share this with me)
  • Suggestion through priming


The Please

The please" is where the scam claims to solve your money problem, by giving you tantalizing glimpses into the steps you need to do. This is where your perception will be manipulated. The potential gains will be exagerated. The risks will be minimized or neglected. The cost will be presented as fixed, low, and limited.

The scam will be presenting a ton of alleged proof of "legitimacy" and testimonials where it somehow conveys the impression that it can make you a ton of money, and somehow give you a shortcut to fortune. The risk is never mentioned. The cost is described as "fixed', and reward is "tremendous"... if it works as they claim.

Most of the fakery will be here... where the scam will merely IMPLY that it is legal, legitimate, and profitable, by simply neglect to mention ANY of the negative attributes, risks, and so on.

Alleged benefits will be dramatized. Just like the various demonstration in the infomercials, like "Set it, and forget it!" a scam will often dramatize the benefits that the scam will offer, even if the benefits are rather intangible, like money. They'll have someone throwing money bills in the air, live in a big house, have a yacht at the dock, lounging by a pool, beautiful companion, a fleet of luxury and exotic cars... You get the idea. Rewards... lots of rewards.

Next will be a demonstration of some of the most dramatic benefits, even if you will never use that. Usually this demo is so outrageous, it keeps your attention. The infamous Ginzu knife commercial have the knife cutting aluminum cans and pipes and whatnot. Later knives did even more. In a scam, this is usually someone holding up a check or some other proof of income: "I made $3000 in four hours!" and so on. Looks impressive? Sure. Is it verifiable? Nope. Risk involved? In fine print you won't ever read. But it's always someone who could be your neighbor, or friend, or acquaintance, who had an anonymous job and is now raking in the money in their sleep. Yeah, right. The truth is someplace else.

Testimonials... is the most dangerous and misleading type, since humans can be easily manipulated.

Fake Time Pressure and More

Here are some tactics to force you to commit:

  • bonus for the first X joiners
  • act now and get free upgrade to express shipping
  • limited time offer, act now


The Seize

Now comes the seize, where make sure you don't walk away... Buy now! There is always some incentive for you to act now, now, now! In infomercials, it's probably "order now and get free upgrade to express shipping!" or "we'll double the offer free if you call now!" This is to convince those right on the edge to tip over and buy.

Remember, this is to mess with your perception of "value", or "worth". With these bonuses, you are lead to think you are getting MORE for the money.

In a scam, this is where they will start claiming that opportunities in your area is limited to only the first X people, so you should contact them now to join, before the opportunity escapes from your grasp. That is baloney. Just as all infomercials lie about availability, scams are no exception.

There is usually some sort of a risk-reversal... i.e. a money-back guarantee. However, that can be manipulated. There's usually a long page of fine print legalese of the conditions you need to meet for a refund. Most people don't bother. In a scam, this is even worse, as people are often too embarrassed to admit they have been scammed, and will put up a good front and pretend they got even.

The Squeeze (optional)

The Squeeze is where the scammers tries to squeeze more money out of you, by convincing you to "upgrade" and get some sort of a deluxe package available at extra cost. They ask you to double down, buy multiple positions, and so on. Buy the "deluxe package" to start instead of the "starter package".

This step is optional. Many scams do not have the squeeze step.

Example: Mystery Shopper Scam

In Mystery Shopper Scam is basically a variation of "overpayment" scam with a fake check.

The Tease

In a mystery shopper scam, there is an advertisement that they need "mystery shoppers" to evaluate a store. They will provide you with a stipend. You are to go into that store, buy a few items (up to you) and spend as much of the stipend as possible, as a test to employees. You can keep the merchandise when it's done, but you need to fill out a long questionnaire that rate the store, the layout, the condition, the helpfulness of employees, and so on.

The Please

You may be interviewed over the phone. There will be citings to various news articles about how mystery shoppers are real and real companies use it to evaluate their stores and such.

By this point, your evaluation of cost, risk, and reward should be as follows:

  • cost: just some time, both to actually shop, and to fill out the questionnaire
  • risk: almost none (that you can see)
  • reward: free money to spend on stuff you already want!

So what happens next?

The Seize

You get the stipend in the mail, except it's TWICE as much as you'd expect. instead of $250, it's like $500, in the form of a cashier's check. Then you get a frantic phone call or e-mail from the person you talked to previously. She messed up, and she must have the money back ASAP before her boss notices. However, you can't send the whole check back, because she needs the results ASAP also! You must cash the check and send the extra amount back by Western Union! You have to help her! She'll lose her job!

If you help her, you have just taken on cost and risk. The actual factors now are:

  • cost: the difference in the amount, usually half of the check, call it $250
  • risk: if the cashier's check is fake, you can be charged with check fraud
  • reward: free money to spend on stuff you already want, if it's real

So you sent the money back via Western Union that same day, with money out of YOUR account. You deposit the cashier's check, which will take several days to clear. You thought you helped a friend.

By appealing to your emotion, you are less likely to realize that the rules that you had previously agreed to had completely changed. This is basically a "bait-and-switch".

The Squeeze

No squeeze in this scam.

The Reality

Your bank called: the check is fake. You tried calling that phone number back, but that number has been disconnected. You are out of the money you sent via Western Union, and you need to answer to the police and the bank's fraud department on why you passed a bad check.

Example: Fake MLM, actual pyramid scheme

Modern scams are not always shady deals, at least upon first look. They will have slick websites, tons of visitors (trendup in Alexa and Google), claims million or more members, good press from some minor newspapers (which are essentially press releases) and so on. The following are real examples, but name have been excised to protect the guilty.

Some scams hold "conventions" and "trade fairs", charter special trains, and book singers to perform at their events. All of that is to convince you that the company is legitimate, that a fake company would never do that.

The Tease

A fake MLM would present itself with verbiage such as "Chance to earn $10000 a week!" (actual verbiage) It will often claim to ride the hottest trends in the world, such as online business, home-based business, multi-level marketing, travel, wellness, and so on.

It will ask you if you want to be rich, never have to worry about money again, so on and so forth.

The Please

A fake MLM would often have a name that sounds legitimate, somewhat similar to an existing company, as well as proclaim all sorts of "corporate values" to help make people rich, often with a fancy tagline and a derivative logo.

A fake MLM would present all sorts of claims to legitimacy that is impossible to verify, such as "strategic alliance with biggest names in travel" or "funded by famous investors in ______". It may even have a fancy phone number and address.

A fake MLM would present all sorts of "testimonials", none of which can be verified. The testimonials usually involve someone holding up wads of cash, or posing in front of a new car they allegedly just bought with the money they made from this "opportunity".

A fake MLM may provide citings to news items and books which claims that their industry (but not themselves) are growing fast. One scam was known to cite Robert "Rich Dad" Kiyosaki and Donald Trump, as well as Bill Clinton and even Warren Buffett.

A fake MLM would present a compensation plan that is intentionally designed to mimic a real multi-level-marketing company's organization.

Thus, the factors, on first look, would be

  • cost: just the signup fee
  • risk: if you do what they say (and they said it is easy!) there is no risk!
  • reward: lots of money, money, money! And whatever bonuses they promised!

The Seize

The fake MLM will promise to give you extra training, extra marketing help, and so on. Some may even promise you a free bonus immediately upon joining, such as a 7-day 6-night vacation. Hand over the money now, now, now!

The Squeeze

The fake MLM will often imply that you can accelerate your earnings if you buy multiple memberships, so you are encouraged to do that. A fake MLM will often have a "premium" membership in addition to a regular membership that you can buy.

So what happens AFTER you join?

The Reality

When you tried to redeem the "free" trip you found that the destinations are either in only one country or one city, or there are lots of extra fees you need to pay to redeem the trip. If it's some special deal you found that there are a lot of "fine print" that was never mentioned when you signed up. 

Sometimes, the fundamental nature of the business was mis-represented. A real company claimed to pay for surveys, but when questioned, claimed to be selling e-magazine instead. 

The real factors are as follows:

  • Cost: multiple sign up fees, plus various fees and taxes and whatnot.
  • Risk: the whole thing could be an illegal pyramid scheme, esp. if it just recruits, and that can cause local recruiters to be arrested for fraud 
  • Reward: the money is tied up in an eWallet that is almost impossible to redeem, or can only be used to purchase useless / overpriced items. 

Then when you investigate the various claims to legitimacy like client list, partner list, and so on you will often find they are all fake. The office is virtual (rent-a-office-by-the-hour), the phone number is IP-forwarded to somewhere in India. Endorsements are misrepresentations. Arguments of legitimacy are logical fallacies, like "I get paid therefore it cannot be a scam!" (remember Bernie Madoff?)

Then governments start cracking down on the alleged pyramid scheme... and top recruiters arrested. Will you be next?

Conclusion

Scams follow the same patterns all over. If you can recognize the components of a scam, you can spot scams more easily and thus avoid them.

Don't get scammed out there. 

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