Illustration of a woman's head, broken into different segments - demonstrating the psychological impact of scams on victims

What’s the most powerful tool in a scammer’s arsenal? Believe it or not, it isn’t a convincing phishing message or a Generative AI video or voice call; it’s psychology. Scammers understand how to manipulate victims into doing their bidding by playing to their need to feel safe. We spoke to a psychologist—who was also a scam victim herself—to gain insights into the psychological impact of scams.

A Victim (and Psychologist’s) Scam Experience

Shortly after returning from a brief vacation to the idyllic Berkshires in western Massachusetts, Dr. Patricia Harney got an unusual phone call. Her bank’s name appeared on her caller ID, so she answered immediately.

The voice on the other end of the line asked her for her name, which she confirmed. Then they said they had noticed some unusual activity in her account, claiming someone had used her account to purchase a $900 laptop somewhere in Texas. The caller even asked if she had been traveling recently, which she confirmed.

The caller claimed her debit card had been compromised and that the bank would need to issue a new one. In the background, she could hear the sound of typing. The caller even recited her bank account number. At that moment, Patricia said she felt grateful to her bank for alerting her.

“I was offering them a lot of appreciation for catching this fraud and calling to help me,” she said. 

However, after she hung up the phone, her feelings of relief and gratitude were short-lived. She looked at her bank account to see that $3,500 had been transferred to another account.

She immediately called her bank to resolve the issue but waited several hours before speaking with a live person. As she waited, her mind swirled with questions and confusion—especially for her son with whom she shared the account.

How Scammers Use Psychology to Commit Authorized  Fraud

As a psychologist, Patricia understands the tools that scammers use to manipulate and gain their victims’ trust. It boils down to a two-step process:

  1. Give scam victims a sense of urgency or make them feel unsafe or in danger.
  2. Offer them a solution or way to get to safety.

Instilling a sense of anxiety is critical to earning victims’ trust, explained Patricia.

“Anxiety is all about the response to a threat,” Paricia said. “When you feel unsafe, the immediate instinct is to do whatever you can to feel safer.”

That’s when the scammer shifts to step two in their plan.

“If you have the person right there offering to help you feel safer or offering to protect you, it’s a natural response to accept that help,” she said.

Tactics like these are proving dangerously effective and enabling a wave of authorized push payment (APP) scams, including investment scams, impersonation scams, and romance scams.

The Lingering Emotional Effects of Scams

Looking back on her ordeal, Patricia realized too late that the person who contacted her was a scammer who had spoofed her bank’s phone number. In her conversation, she had unknowingly confirmed details that enabled the scammer to make a transfer.

Fortunately, her bank refunded the money within 24 hours because the incident was an unauthorized fraud executed by the scammer, not Patricia herself. However, the emotional and mental health effects of the scam that preceded the fraud remain with her more than a year later.

“Even talking about this right now, I feel a little anxious,” she said. “I’m just aware of my heart rate being activated.”

Image detailing the Psychological Impact of scams, including cognitive impairment, emotional distress, PTSD, financial anxiety, self-blame and shame, and powerlessness.
Image detailing the Psychological Impact of scams, including cognitive impairment, emotional distress, PTSD, financial anxiety, self-blame and shame, and powerlessness.

Recent research from Feedzai concurs with Dr. Harney’s experience, especially as it applies to older customers. A survey of 3,000 senior citizens worldwide who fell prey to scams found that victims experienced a wide range of emotional fallout, including anger, shame, isolation, and more. 

The Psychological Aftermath of Scams

Getting scammed is an anxiety-inducing experience, as Dr. Patricia Harney can personally attest.

“It rattles your sense of safety in the world,” said Dr. Harney, adding that victims can move forward after a scam. “The first step is to re-establish some sense of safety.”

To that end, she recommends that scam and fraud victims find ways to be self-protective and carefully consider whom they talk to about financial matters. She adds that it’s essential for victims to engage with trusted people like a friend or family member to talk through the ordeal.

Unfortunately, scammers will continue to employ a wide range of scams and psychological tricks to manipulate victims. As they navigate the challenges, banks must also work to establish themselves as trusted entities that can help victims following a scam. Victims will be highly vulnerable, so being supportive and attentive to their needs is critical.

Fraud teams have traditionally operated in shared service roles for bank branches and call centers. As more customers transact online, fraud teams are shifting to the front lines and directly interacting with and authenticating customers. This shift comes with new responsibilities for fraud teams, including helping customers cope with the emotional impact of a scam.

If banks don’t successfully adapt to the moment, they may keep customers in their systems but lose valuable revenue opportunities. Customers might leave the bank or decline to use additional financial services. Worse yet, they may tell their friends and family members—or leave a public review—about their experience, which deters other customers from joining.

As banks look to build customer trust, they should consider what customers expect from them following a scam. Customers will be looking to rebuild their lives and seek support. This is a pivotal moment in the bank-customer relationship.