Thursday, October 5, 2017

Scam Psychology: Why Scammed Victims Refused to Believe They've Been Scammed

As the #mlmskeptic, it is often sad to see how people turned absolutely illogical when it comes to money. We all like to believe we are rational creatures, capable of evaluating problems objectively. However, scientists have shown that our biases have far more hold on our processes than we think, and skepticism must be learned to combat those biases.

Let's take ZeekRewards for example. ZeekRewards is a convicted ponzi scheme that was closed in 2012 by US Secret Service and SEC.  You can learn more about Zeekrewards on Oz's website , or check my attempt to track the scam throughout 2012 until just as it closed.  But basically, even AFTER the scam was closed by the authories in October 2012, people CONTINUED to believe in the scam.  One of them even posted this note on the closed office window of Zeek:

"We forgive you / Please restructure and save our Dreams"
There are comments posted by conspiracy theorists who insisted that Zeek was closed for nefarious reasons, and Zeek cannot possibly be a Ponzi scheme.

Curt Miller: It was the SEC that slowed your growth, sorry. There were no victims until the government came around...
only 2 million happy affiliates. It was no ponzi and the program would NEVER have gone bankrupt. 
Basically, people are in denial. They refuse to believe they have been scammed. Instead, they behaved irrationally by spinning tales that fit their own biases.

Scientists have been studying this for a long time, and they now have more proof that we would rather believe in something that cost us $$$ rather than accept bad and unpleasant news.

Scientists conducted this experiment in two phases. In phase one, the participants are only told the value of the symbols they chose, and they slowly learned which symbols are worth more. In phase two, the same people are given two symbols to choose, but this time they know both values, except this time the other symbol may be worth more. Yet the participants keep choosing the symbol they prefer from phase I, rather than logically, pick the OTHER symbol which is now worth more.

In other words, even with evidence staring them in the phase that their "favorite" symbol is now worth less, THEY STILL PICKED IT ANY WAY.

That is NOT rational behavior.  Yet it is true. Once we formed an observation, we are often NOT willing to change it, even with clear evidence we should, and even with financial stakes.

Let's go back to ZeekRewards again. For over a year prior to its closure, critics such as Oz over at BehindMLM and yours truly have been warning the public about how this can't possibly work. The number of penny auctions cannot possibly sustain the so-called "profit sharing". This had to be a ponzi scheme, and there are plenty of proof.

Yet few listened. The membership at Zeek grew to allegedly up to 2 million before it was shut down. And as shown before, people CONTINUED to believe in the scam, even after it was shut down, that it is believed thousands of people actually donated money to a fund allegedly for the purpose of argue in court to have Zeek exonerated. That never happened.

People refused to believe they've been scammed. Their first impression "great money maker" had taken hold. Even when faced with facts that they are losing money, they cannot let go of their initial impression.

That self-serving bias and inability to change one's thinking is VERY dangerous to one's financial well-being.

1 comment:

  1. Good article on how these scams get control of people's minds.