Documented Type II "Vigilante Karen" Sighting in San Francisco

A Type II "Vigilante Karen" was documented on Reddit harassing a father with his disabled child in San Francisco's Lands End, mistaking them as "old man dragging a drugged kid" over the July 4th weekend in 2023, and park police was summoned. 

I am not going to repeat the whole story, you can click through the link yourself, but here's the TL;DR version: 

Father, in his 40s, was with his disabled 7-year old son with severe intellectual disability at Lands End for some nature. 

They were just walking on a trail when a wild Karen appeared... 

This Karen in her 20s (no other description given) ran up to them and kept asking do they need any help which they clearly do not. However, Karen will not let them go, and even blocked their path. Karen kept insisting she only wanted to help them, even though she's scaring the kid. 

They turned back, and was soon confronted by park police. Apparently someone called in "elderly man dragging a drugged child". Police quickly determined nothing's wrong, gave the kid a sticker, and that's that. 

No word on what happened to the Karen when police arrived and cleared the father of any wrongdoing. 

EDIT: Please click through and read OTHER PERSPECTIVES on what is going on. Alleged witnesses and perhaps even Karen herself had came forward. 

Father speculates that the Karen probably called in the police before confronting them as a delaying tactic, and may have realized her mistake when looking at the child up close. 

Skeptic's Analysis: This is a classic case of Type II Vigilante Karen who summons law enforcements or tries to enforce some laws to "improve the society and right some wrongs" even though there was nothing wrong, merely her perception of such as an entitled Karen. 

Have you spotted any Karens lately? So far, I've identified 5 types:

Type I: "Serve me!" Karen, usually in a store, source of "I don't work here, lady" stories, mistaking some random person as a store employee and demanding service.

Type II: "Vigilante Karen", see above, mis-perceives the situation as unethical or criminal, summons law enforcement for the perceived crime or tries to enforce the law herself, but not physical

Type III: "Punisher Karen", Vigilante Karen that got physical

Type IV: "Robber Karen", indulgent mother who decided to rob others of items for her child. could be pet, toy, model, etc., could be in public or against other children.

Type V: "How Dare You Karen", negligent mother who decided her child's perfect and anyone who dare to correct her child would need to suffer her wrath, similar to Type IV but less physical, similar to Type II and Type III.

Please share reports of "Karens in the wild!" 

 

Cognitive Distortions, i.e. when your brain is lying to you

You can trust your brain... in general. You have to, since your brain controls everything. But there are occasions when your brain will lie to you. Not intentionally, but call it... "miswired" or "misprogrammed". It's been fed some garbage data and it formed some connections that should not have been made.

And scams are basically intentional signals to encourage your brain to form a connection it should NOT have, to reach a decision that will hurt you, usually financially.

Our brain was created to form connections between vast sets of data and memories, and see patterns in every ing: thoughts, ideas, actions, and consequences, even when they make no sense whatsoever. Athletes and gamblers often have lucky tokens or special rituals, because they associated "winning" with those tokens and rituals. We did A, we get result B. That's the power of correlation. But we've been told time and time again "correlation is not causation".

Yet a cult (and by extension, MLM), and scams are very fond of presenting partial facts as a part of their mind modification techniques to increase your devotion to "the cause".

Here are sixteen of the most common cognitive distortions, and how they apply to cult mind modification. (NOTE: This list is long, so it will be continued in the next post).

1) Extreme thinking

Ever heard the expression: "you're either with us or against us"?  That's polarized thinking. There are no shades of gray. It's either good, or bad. It's great, or awful. There is no in between. This sort of thinking makes it impossible to discuss things with any rationality, as the real world is full of shades of gray.

Commercial cults often treat anyone who questions their favorite company/product as evil to be either avoided at all costs, or as objects of derision, when all the other side wanted is some honest answers. Commercial cults often throw out terms like "dream-stealers" or "naysayers" and use that to describe anyone who doesn't agree with their narrative, even when those narratives are full of holes. They don't want to deal with ANY questions about their own narrative, either you believe, or you don't. 


2) Overgeneralizing

Taking conclusion from one data point, and apply it to everything, is an overgeneralization. Get one "C" on a test, and the student is considered a dismal failure. Get paid once by a suspect scheme, and it must be a "good program". It's obviously not logical, yet you'd be surprised how many people do it.

Commercial cults members are often very fond of citing their own experience in trying out the product as if that validates everything they presented. They can't seem to see that it's just ONE datapoint... their own individual experience, they are are presenting, as if it's the universal truth. Commercial cults are often fond of asking its members to go after the low-hanging fruit first, i.e. friends and family, because those are the easiest to get, thus giving the members a false impression of "how easy it is", thus reaching "overgeneralization". When the members ran out of the easy pickings, they started to find out how the business is REALLY run.

On the other hand, it's more likely for the negative experience to linger and become overgeneralized, i.e. "I failed here, I'll always fail".

DADA Loop: Data / Analysis / Decision / Action and the MLM mind

How do you make decisions?  It's usually a 4 step process:

1. Gather Data

2. Analyze Data

3. Decide on Action

4. Perform the action

This is pretty obvious to most people. Military call it the OODA loop, civilians called it DADA loop (data, analysis, decision, action), but it's the same thing.

So how can this loop go wrong?  EVERY one of the four steps can go wrong.

• One can gather the WRONG data (victim of deception or bad data gathering)
• One can fail to analyze data objectively (by ignoring good data)
• One can fail to decide on any action (stalled loop)
• One can fail to perform the action correctly.

Let's see how MLMer reacts to these steps.

Scam Psychology: Cognitive Biases that leads to bad money decisions

Recently Lifehacker posted an article about cognitive biases that lead to bad money decisions. They are, obviously, perfect described the mindset of an MLMer.  Indeed, MLMskeptic here has covered most of them.

Sunk-Cost Fallacy -- if you have put money and effort in, you would not want to give up. This is also related to "Ikea Effect".


Choice-Supportive Bias -- also known as post-hoc rationalization, you made an impulsive decision NOT supported by logic, and later you tried to come up with reasons why you made that impulsive decision.  You will even rewrite your history and memory to somehow "prove" that you made the right decisions.

Anchoring Bias -- you rely too heavily on the FIRST piece of information and let that information affect your subsequent decisions, even of that first info is outrageous or wrong. Even when you are shown proof that the initial information is wrong, you fail to correct yourself and your thought process.


Bandwagon Effect -- "everybody else did it" somehow proves that it's logical, even when scams can have millions of victims. Popularity does not prove veracity or truth.


Status Quo Bias -- If you prefer the things the way they are, even though it's bad for you, you're definitely affected. Scam victims often refuse to take action to protect themselves because they believe they cannot be in a scam, and they want to "wait things out" even as the scam continue to take their money and provide one excuse after another.


But go read that article.

Related articles

• Scam Tactic: "Don't knock it until you try it" slogan is very bad advice(amlmskeptic.blogspot.com)

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• Scam Psychology: "You have to try it to understand it" fallacy(amlmskeptic.blogspot.com)

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• Scam Psychology: Luck Blindness, or why lucky people see it as skill, not luck(amlmskeptic.blogspot.com)

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Cognitive Bias: Sunk Cost Fallacy

Answer this following question to yourself, truthfully please. Remember, it's for you and you alone. Only you would know the answer.

Q: Do you make rational decisions based on the best-estimate future value of objects, investments, and experience? 

Your answer to yourself is probably going to be: Yes, of course.

You are wrong. In reality, your decisions are based on your EMOTIONAL investment you already made and accumulated, and the more you invest, the less likely you can let it go. 

This is a cognitive bias known as "sunk cost fallacy".  In short, you are basing your decision on what has been invested, rather than what it's worth NOW (or in the future).

And it's very simple to make you feel you've invested time and effort... by making you do trivial tasks that amounts of zero importance. Zookeepers (and pet owners) know this principle well... it's called "contra-freeloading".

Contrafreeloading is a term coined in 1963 by animal psychologist Glen Jensen, who created an experiment where 200 albino rats were given a choice: unlimited food pellets in little bowl, or a mechanism where they have to learn to press a lever to release a food pellet. Logically, rats should simply gorge on the effortless food and never touch the lever. However, the opposite happened... rats actually prefer the food source where they had to press a lever, by a large margin. This was since repeated in gerbils, mice, birds, fish, monkeys, chimps... and more. (The only exception is the domestic cat). In short, animals prefer doing a little work (but not too much) for their food, rather than just take a handout.

A great example of contra-freeloading in a scam is ZeekRewards ponzi scheme (as accused by SEC and USSS), an $850 million scheme will soon go to trial. In ZeekRewards, one supposedly buy bids in the Zeekler penny auction, give away the bids to random strangers as promotion, and gets rewarded with certain amount of daily profit based on the bids purchased for the next 90 days. One also needs to post ads to random places on the Internet, and then post the URL on the ZeekRewards website as "verification" to be rewarded. In reality the vast majority of the bids were never used (i.e. the participants simply put money into the system) and expect daily "profit share" of up to 1.8% of the money they put in. The daily posting of ads were never tracked and verified, and indeed some people started a blog just to post ads... that nobody will ever read or see. It's rather obvious, in hindsight, that the "posting the ad" must be contrafreeloading... to make the participant feel they "worked" for and "earned" their share of "profit" amounting to as high as 1.8% DAILY, when the trivial task can literally be done in a few minutes, and be outsourced to some kids for pennies a day.

Yet when all these facts were pointed out to the ZeekRewards affiliates, their answers often are "you work for a competitor", "you work for the 1% to oppress us", "why don't you want us to succeed", and so on. After Zeek was shut down, several members even outright claimed "there were no victims until the government came along."

Curt Miller, on FB, soon after Zeek was closed by USSS and SEC, claiming that
"there were no victims (in ZeekRewards) until the government came along". 

They are so emotionally (and financially) invested into ZeekRewards, they can longer think rationally and see reason, even when there is NO REASON to continue to behave irrationally.

It is illogical to continue to support an alleged scam AFTER the owner made a plea deal with the government. However, hundreds of people donated money to a organization that promised to put the money toward "defending" ZeekRewards from the SEC. The owner of such organization was later jailed for defrauding the US government in an unrelated matter. The so-called defense ended up being an attorney who attended the receivership meetings, and filed several motions that was denied. He accomplished nothing useful except delay the process for the rest of the victims, and it was widely rumored (but never confirmed) that the rest of the money went to the organizer's private plane's upkeep.

They are the embodiment of sunk cost fallacy.

Scam Psychology: How Threshold of Collective Behavior Affects Victim's Mindset

Readers of this blog have remarked that they are very surprised at how a victim will refuse to acknowledge s/he is a victim, despite very clear evidence that are indisputable, repeatedly demonstrated, even by the leader of the scheme. The victim simply ignores any evidence that is "negative" and accepts any evidence that is "positive". It is... completely irrational.

Yet irrational behavior is so prevalent, even when the behavior is CLEARLY demonstrated to be irrational. The perfect example? Basketball legend Wilt Chamberlain.

Wilt Chamberlain's 100-point game
(Photo credit: Wikipedia)

Wilt Chamberlain, despite his legendary status, was a HORRIBLE free throw shooter. For his entire career... his free throw shooting percentage is... 51%. However, this guy once scored 100 points in an NBA game... BY HIMSELF!!!!!!  And in this game, he made 28/32 free throws... with UNDERHANDED throw! He made the first nine free throw shots! He tried doing this underhanded throw for a while and improved to 70+% accuracy rather than 50% of his normal overhand throw. So you'd think he'd keep doing it, right? WRONG! He went back to being a BAD shooter, because... Wilt Chamberlain does NOT want to throw underhanded. He "felt silly, like a sissy."

The choice to switch back to the 50% overhand free throw is an IRRATIONAL decision.  How can one of the greatest NBA players choose to play badly... just because... he felt bad even though the results speak for itself? Even today, the underhand throw is known as a "granny shot", and there are almost NO professional or semi-pro basketball players using it (only two in NBA, IIRC).

This sort of irrational behavior is very much in evidence when it comes to scam victim's mindset. Scam victims have been known to organize rallys "in support" of their ponzi scheme, interfere in government probes and sometimes, even sue the government in attempts to "clear the name" of the scheme they were involved in.

Sociologists believe this may have something to do with "threshold of collective/group behavior", where people will choose to follow a group, despite the group is NOT something they believe in. Like Wilt Chamberlain who chose to follow other players (in order not to feel sissy) instead of improve his scoring, scam victims will follow their group until the bitter end despite they know this can only turn out badly.

Scam Tactic: "Don't knock it until you try it" slogan is very bad advice

One of the most common arguments for income schemes is "don't knock it until you try it", i.e. "it paid me so it works". This is actually a VERY flawed argument. Recently I came across the Skeptoid episode: don't try it until you knock it. While that's about general skepticism, it works very well for financial scam debunking as well, as it destroys all the variations of the bad argument.

Don't Knock It Until You Try It?  Nah. 

Personal experience is "sample size of one". It is noise. It subject to sunk cost fallacy, subjective validation, self-superiority bias, confirmation bias, and all the other cognitive biases. Mankind invented science and scientific process to counteract such biases.  Personal observation is subjective, and therefore biased information. Advocating one to "try it" simply proves nothing.

Yet MLMers love to fly this particular argument. They value personal experience over all others, the exactly opposite of scientific process trying to filter out bad data. It is basically fully faith-based.

I was skeptical until I tried it

A true skeptic would know NOT to try it due to all the reason discussed above. The proper way to evaluate something is through scientific and statistical process from a large sample set, not through a single subjective personal experience.

Falling for a dare / lure to "try it" just makes you gullible, not skeptical. Yet MLMers selling nutritional supplements or unproven "treatments" love to fly this particular argument.  (also see "What's the harm" below)

I know it works, because it worked for me

So somehow, you're God, and what you experienced is the universal truth for everybody, eh? It's just your subjective experience, based on your circumstances at the time, and based on all your PRIOR memory and experiences. If any one else had different life history, experienced the same thing at a different time, under different circumstances, or any combination of such, the experience will be different.

What you experienced is only good for yourself. It is not a data point. It is anecdote.

Where do these MLMers get their "facts"? Certainly not from this reality.

In attempting to engage with some MLMers regarding their unbridled enthusiasm, I've since found out they seem to be armed with a lot of... nonsense from somewhere. They surely don't seem to have just... invented it. But where did they get such nonsense that they perceive as "facts"?

Here are a random sample of  several "not-facts" thrown out for sake of argument by these MLM supporters, all the while chanting "Worre pwn'ed Ramsey!" in the Youtube comments of a Dave Ramsey show where Ramsey provided some realistic outlook on MLM.

It makes one wonder, do they just make up "facts" as they go along?


S1. "MLM works for thousands of people around the world"

S2. "Amway Japan is the biggest company there and has been trading for over 55 years."

A1. I never said anything about "MLM doesn't work", but that's ignore that for the moment, as he did. He put up a strawman, then cited a non-sensical fact in support. "Thousands of people around world" found MLM to be working...

DSA estimates that there are 20.2 million (per 2015 fact sheet, DSA.org) in the US alone, and probably 100 million around the world, in MLM. If only "thousands" found it works, that would suggest TENS OF MILLIONS found it did not work, doesn't it?

Factualness rating: D, true, but not placed in context. A system that works for a tiny minority cannot be considered a working system.

A2. Even a modicum of logic should tell you this is impossible. The biggest corporations in Japan, the haibatsus are hundreds of billions big.  Toyota's revenue from 2013 was 224 BILLION dollars.  This guy seriously thinks Amway in Japan can beat 224 billion? How old did he thinks Amway is any way? Amway Wiki states clearly that Amway Japan opened in 1979. That makes it 37 years old, certainly quite a bit off from 55. And its revenue, as per Amway was 1.1 billion USD (2006) again, AmwayWiki.

Factualness rating: F, completely false in every facet

Cognitive Bias: Status Quo Bias

Status quo bias goes by many names, but to put it simply, "if it works why change anything"   Any change form the current situation is judged to be unacceptable.

Scam victims often suffer from status quo bias, esp. after they learned the scheme they've latched onto or recruited into isn't on as firm legal and financial footing as they were lead to believe. Even when presented with all the evidence that they are in a scam, they will keep saying "I don't know if XXX is a scam. Time will tell." They don't want anything to change, even when more viable alternative such as attempt to withdraw from the scheme, report fraud to the police, and so on seem to be more reliable method of dealing with the fraud.

Status quo bias is often mixed up with other biases, such as loss aversion, sunk cost fallacy, longevity (appeal to age fallacy), endowment effect, regret avoidance, and more.

Why Do We Have Status Quo Bias

Behavioral Economists Kahneman and Tversky published a paper back in 1982 that found people feel greater regret for bad outcomes that result from new actions taken, than for bad consequences that are the consequences of inaction. In other words, if doing something is bad, and not doing anything is also bad, people tend to do nothing. One possible explanation is people can then blame circumstances (I didn't change anything, circumstances changed) rather than take responsibility for their own choices. This is a fallacy, of course, since choice to do nothing is still a choice.

How Status Quo Bias interacts with other biases

Endowment effect is also known as "divestiture aversion" in behavioral economics. Basically, people ascribe more value to things merely because they own them. It's also related to "mere ownership effect" in social psychology.  It can be described simply as "once you have it, you will want to keep it than give it up".

Sunk Cost fallacy is related, in that "once you started on a course of action, you justify your continual involvement by claiming you already spent effort and resources (sunk costs) and you cannot let it go to waste when it seems more prudent to cut the losses and change course."

As an example of endowment effect, people will often pay more to retain something they own, than to obtain something they do not own, even when there is no reason for attachment, and even when the object was obtained merely minutes ago.

Dan Ariely and Ziv Carmon did a test on hypothetical selling price (willingness to accept) NCAA Final Four tournament tickets. They found that the ratio of WTA (willingness to accept) vs WTP (willingness to pay) is 14 to 1. In other words, those who have the ticket want 14 times higher the price those that don't have the tickets are willing to pay.

Cognitive Bias: Choice Supportive Bias (aka Post-hoc Rationalization)

Previously we have often talked about cognitive dissoance, which is basically when a person is faced with two sets of "truths", and they conflict, therefore one set of which must be false.

For example, let's say the person has joined a suspect scheme, and is withdrawing money bi-weekly, but not yet achieved breakeven. Then he's exposed to a source that explained that the scheme is a scam with trustworthy sources.

So, how does one resolve this conflict between two sets of facts... a) the scheme works, I am getting paid  and b) the scheme is a scam ?

One way the conflict can be resolved is through "choice supportive bias", also known as post-hoc rationalization. As the person is already in the scheme, the person is likely to choose to continue in the scheme and therefore decide that the trustworthy sources (that explain the scheme is a scam) are NOT acceptable.

Basically, the person wants the answer to be "scheme is fine" and thus chose that outcome, and came up with reasons to discount the trustworthy sources post-hoc (after the fact). Normal logic is  check all the sources, then arrive at the conclusion. This is the reverse... The person know the conclusion s/he wants, then come up with the reasons later.   It's motivated thinking.

As you can probably guess, motivated thinking means more often than not the person will reach the WRONG conclusion, since the conclusion was NOT deduced from logic, but emotion.

Let's look at some examples...

What do you repost? Think about it a little...

Specifically... did you fact check it first?

A: "Did you fact check this before reposting it?"
B: "I don't need to. It agrees with my preconceived views and biases so it must be true!"
from thelogicofscience.com

Scam Tactics: How Do Scammers Identify What You Need?

How does a conman pick up on what does the victim needs, and thus, tailor the scam to fit?  There are five different techniques. If you are aware of these techniques, then you can watch out for when they are used on you.  Let MLMSkeptic explain the five techniques.

The techniques are:

1) Pre-screening

2) Probing questions

3) The tease

4) The Please

5) Trial Close / Seize


Pre-Screening

Your identity is known on the internet. Somebody out there has a profile on you, more than one if you have used multiple names and/or multiple identities. Credit agencies definitely have one on you (and there are several of them). If you're a professional you have professional profiles somewhere. And those can be accessed. That's just your public profile.

Then there's your "hidden profile". Your behavior online is part of your profile. If you give out your name and email address at capture pages that goes into a profile somewhere, and shady businesses will share that info (even if they promise never to do so) with other shady businesses and that's a part of your profile.

If you ever applied for a loan you will get solicitations for loan offers for MONTHS. They shared your info. And they're legit. Imagine what the ILLEGITIMATE scammers and conman will do...

If you ever asked for more info on suspicious "make money fast" type schemes, or clicked on teaser videos that says "sign up for my ____ for more info" and entered your email for "more info", your name is now on a "sucker list" to be marketed with more **** in a similar genre, because you have shown a preference for such topics. 

Scammers (and legitimate salespeople) pay $$$ to buy leads that may be interested in such things, and the lead list is pre-screened for people who are at least interested to whatever s/he's trying to sell. As the joke goes, you don't sell ice to Eskimos or sand to Arabs. By pre-screening the prospects, conversion is much easier.

The prospect generally doesn't see this step, as it's done long before the scammer meets the prospect. To counter this, simply don't be surprised when you got invited / solicited for sales pitch which seems to be exactly what you want. People already "know" you.

Probing Questions

Probing questions are pretty easy... Ask them what *do* they want. Due to pre-screening, you already have a decent idea on WHAT they want. However, there can be a little distance between what they say they want, vs. what they will settle for now. And asking questions will clarify that. 

If the presentation is pretty much a monologue, then the salesperson will be asking rhetorical questions, like "Are you looking for financial security in an insecure world?" "Are you looking toward better health?" then answer them him- or herself, "the answer is ________!"    And scammer will watch the reactions and see if s/he needs to change the speech. 

The salesperson will almost always frame the question so the answer is "yes". By answering things in the affirmative, prospect will have influenced him- or herself to answer "yes" later. 

The prospect should remain neutral for this part, not only to deny the presenter any clues on how to proceed, but to remain neutral mentally rather than "psyched up", in order to evaluate facts rather than emotions.

The Tease

The tease require a bit of mystery, and a commitment from the prospect to find out more. A "capture page" where the prospect watch a video and enter their info is such a tease if there's no details. The idea is to pique your interest, without telling you much. 

Tease works on relatively naive people who are not used to the various sales techniques, but not on veterans. Veterans will simply demand the information they need to make the decision, and will not waste time waiting for your "big reveal". 

The prospect should again, remain neutral when confronted with the tease. You are after facts, not teases with no solid info.

Scam Psychology: The illusion of explanatory depth (especially about MLM)

One phenomenon that initially puzzled the MLMSkeptic is the SEVERE LACK OF UNDERSTANDING by most MLM participants about their own industry. They seem to be completely unaware of the facts, and instead believe in misinformation, such as

• Harvard Business School teaches/endorses MLM (NO THEY DON'T!)
• MLM / Network Marketing Created the Most Millionaires (NO THEY DIDN'T!)
• Having a product means the scheme cannot be a pyramid scheme (WRONG!)

And many more.

It is as if many participants are relying on... "folk wisdom" passed down by their uplines, who are passing misinformation, whether by design or negligence, leading to a game of "telephone" where after a few generations / levels there are no facts left, only misinformation.

That's when I discovered yet another cognitive bias... "the illusion of explanatory depth".

Basically, most people only *think* they know something. This is termed "feeling of knowing" by psychologists, or "FOK". They only follow correlations, and form their own idea about what caused what, even though those can be elaborate ruses or illusions designed to trick them. They actually have NO IDEA how whatever they observed actually works.

Here's one example. Do you know how bicycles work? Are you sure? (Those who can look at a bicycle or ride a bike several times a week can probably skip this test)  Without looking it up, draw the bicycle frame, wheels, where are the pedals, and where does the chain go.

Go ahead, draw it. When ready, click "continue".

Scam Psychology: How Scammers Push Your Buttons through your personality disorders

The Age of Uncertainty
(Photo credit: Wikipedia)

As the MLM Skeptic, it is rather interesting to see many people who are defending their particular scheme from criticism suffer from personality disorders (not that I am a professional of any sort regarding psychology). They are often self-obsessed and arrogant as well as intolerant of ambiguity, and lack of empathy.

Many unscrupulous multi-level marketers and scammers play to these personality disorders by claiming they are VIRTUES, not disorders. These disorders are, instead, presented variably as confidence, conviction, certainty, and "they are not us".

People develop coping mechanisms when their self-image was diminished. One of the most common coping mechanism is retaliation: when they feel devalued, they devalue others as a response. Scams often play up this personality disorder by encouraging it with "they are not us; they don't think like us; they just don't understand us". It is then followed with epithets like "They have JOB -- just over broke", or "they will stay wage slaves while we achieve financial independence".

Any one who questioned the person's choice (the scam, in this case) will be devalued, even if they are best friends and family, and even spouse. That's why "intervention" when it comes to scams rarely succeed.

Another coping mechanism people develop is equating conviction with certainty. Conviction is a collection of your strong beliefs about the morality of your choice and/or behavior. If you don't really have much conviction, you'll often adopt certainty as if it is conviction. Thus you'll also develop certainty about other people (and what you believe to be THEIR conviction or lack thereof). This comes across as arrogance and intolerance. Scams play up this aspect by creating fanciful stories about the critics asking questions, such as "you're just jealous; you're just out looking for hits for your blog; you must have hated the owner; you're the 1% out to fleece us the 99%".  After Zeek Rewards ponzi scheme was shut down in 2012, some started floating fanciful stories about "SEC doesn't have a case because they privately admitted to our lawyers". Others even explained to newspapers that Security and Exchange Commission does not know what securities are.

However, what people don't understand is very often, certainty is an ILLUSION.

Scam Psychology: Naive Realism / Anecdotal Fallacy / Argument from Illusion

Illustration of Naive realism or Direct realism. (Photo credit: Wikipedia)

One of the most often used counter-arguments by a scheme participant against skepticism is the self-testimonial, as in "I have done this, so I know it works, and therefore the whole business works!"

Let us assume that they are not outright scammers for the moment (i.e. liar, liar, pants on fire)

What they don't realize is they are operating from "naive realism", i.e. they assumed that everything they experienced is real, when it is quite possible they've been defrauded (magic trick), and they then extrapolated from their limited (but realistic) experience to conclude that the whole business must be "real".  One version of such self-testimonial, and the most often used, is the "It paid me" argument, as in "this opportunity paid me, therefore it's not a scam".

Yet this is the most powerful of all arguments, even if it's false. TelexFree victims in and around Boston, Massachusetts told Boston Globe that pressure from friends and family, esp. when posing with new house, new car, new luxuries, etc. often prove to be impossible to resist, esp. by people with (naive) "unbridled enthusiasm". Quoting from the Boston Globe story:

...Fausto da Rocha said he probably lost $45,000, the proceeds of an insurance payment from an auto accident. He had initially resisted TelexFree, but after friends profited, he decided to join, hoping the investment would accelerate his recovery from bankruptcy a few years earlier and losing his house. Da Rocha, well known in the Brazilian community, said he recruited about 20 relatives and friends. 

“I feel guilty,” da Rocha said as tears clouded his eyes. “My career is gone. I’m going to clean houses with my wife. Cleaning houses is a good business.”

But the social cost is even greater. He had 20 relatives and friends he can never look in the eye again.

Sann Rodrigues, one of the "TelexFree 8" charged by SEC
as part of a scam, showing off his Ferraris and MB and mansion
in Florida in one of his videos (screencap from Vimeo)

Scam Psychology: The Illusion of Asymmetric Insight

Ever heard of "illusion of asymmetric insight"? No? Me neither, at least not until about a week ago, when I heard it on the "You're not so smart" podcast.

The premise is quite simple: let's say A and B have a difference of opinion on a certain issue. However, A thinks that he understands B's position better than B understands A's position. Sometimes, A thinks he understands B's position than B understands his own position.

The reverse is also true: A believe he knows his own position far better than any one ever could, certainly more than B's understanding of A's position, at least in A's own mind.

The problem is more often than not, this is an illusion, not reality.

Cover of Lord of the Flies, Educational Edition

Lord of the Flies

In 1954, a group of psychologists, posing as camp counselors, got 11 and 12-year old boys into a camp... on separate ends of the camp. The two groups don't even know each other exists as they arrived on separate buses via separate routes. As psychologists predicted, a social order quickly emerged, with leaders taking charge and the rest will serve the order in whatever roles needed. The two groups are nearly identical... except they are on separate ends of the camp.

So what happened when they met? Well, you can read the short account by David McRaney of "You are not so smart". Let's just say, one of the things each group obsessed on is trying to find differences between the two groups... and used that difference to "prove" (to themselves) that their own way is superior and the other group is inferior, even though such differences are trivial.

And the experiment almost got out of hand when... let's just say... knives were involved.

http://youarenotsosmart.com/2011/08/21/the-illusion-of-asymmetric-insight/

Scam Psychology: Do You Really Understand Your Odds? (i.e. What is Probability Neglect?)

Read and answer this simple question:

Susan and Jennifer are arguing about whether they should wear seat belts when they ride in a car. Susan says that you should. Jennifer says you shouldn't... Jennifer says that she heard of an accident where a car fell into a lake and a woman was kept from getting out in time because of wearing her seat belt, and another accident where a seat belt kept someone from getting out of the car in time when there was a fire. What do you think about this?

Perhaps it's not so simple now, is it?

Answer this yourself, but keep it in the back of your mind, while you realize the truth...

Human beings SUCK at understanding probabilities... esp. if they are not educated (through no fault of their own).

Human beings are easily influenced into overestimating or underestimating certain probabilities, through time, newsworthiness, and misunderstanding about small possibilities, and outright lies. Here are some of the things psychologists have learned over the years:


Newsworthy Information Affects Perception of Statistics

Human brain have a cognitive bias called 'availability' bias, in that fresh information, esp. those that captures our attention, such as disaster, death, huge lottery winning, or whatever captures your interest, will cause you to remember the information, and thus, influence your perception of likelihood of future events.

After a natural disaster, demand for insurance goes up, even though probability of disaster had not. People simply are more worried after a widely reported natural disaster.

Similarly, report of a recent disease will raise vaccination rates. After a meningitis outbreak at a major university on the East Coast, vaccine was offered within a week, and 95% of eligible student chose to take the vaccine. On the West Coast, a similar outbreak happened 5 months ago. Due to FDA approval process, both East Coast and West Coast were given vaccines at the same time. Only 50% of students in the West Coast University chose to take the vaccine. The news is no longer fresh on their minds.

The more a particular risk or statistic is mentioned in recent news or dredged from memory, the more likely it will be weighed more prominently in one's decision process, even when they should not be.

Most scams rely on modern buzzwords to make sure they related to SOME terms in recent news, like "internet", "apps", "VOIP", "web ads", and so on. They want you to think that "tech" companies succeed because tech is mentioned all the time. And in turn, want you to believe their scam will be a 'success'.


Small Probabilities are Rarely Judged Correctly

Events of small, tiny, or negligible probabilities are downplayed or outright ignored, esp. when coupled with other biases.

Back in the 1980's when automobile seatbelt wearing became mandatory, many people still resisted wearing them. When questioned, they acknowledge that not wearing seatbelts is not a good idea, but most justified it by stating they don't get into accidents, or they haven't had an accident in many years. Their self-optimism bias made them believe that the small probability of getting into an auto accident is 'effectively zero'.

However, the small probabilities can also be over-weighed, esp. when the events are shocking. For example chances of disasters, such as nuclear reactor melt-downs, or Liquefied Natural Gas (LNG) transport explosions, airline disasters, or terrorist attacks... or even something like mass shootings, are often vastly over-weighed and perceived to be far more often they they actually are due to media attention. For example, how many nuclear reactor melt downs have been there? Most people can only name 3: Three Mile Island, Chernobyl, and Fukashima. There actually had been many more (give or take, about 20-30, depending on how you count the ones on-board Soviet submarines).  But that's counting 60 years of nuclear reactors, over 400 plants currently in operation, and most of the problems had to do with the earliest (and thus, the less safe) models.  Chances of a nuclear reactor melting down is exceedingly small, esp. given modern safeguards. Yet after Fukashima, many nations vowed to close their nuclear power plants and/or severely reduce plans to build them. In this case, news coverage has made the risk look that much larger than before.

Scams leverage this small probability misconception by emphasizing that everybody can be successful without mentioning the odds, usually stated as "if you work hard, you can be successful just like me." The definition of "success", the odds, and the definition of "work hard" are, of course, left vague. They simply neglect to mention that everybody has equal by miniscule odds.  Then the scammer will emphasize that the potential victims are making the right choice, how it's a commitment to success, etc. Soon the participants will COMPLETELY ignore the odds that they may be participating in a scam, not a business.

Scam Psychology: What Are YOUR Communication Vulnerabilities?

Scammers are often very good communicators. They can tailor their message for a wide variety of audiences and they are quick in recognizing your particular communication vulnerabilities, and thus, exploit you using those vulnerabilities. To counteract this, you need to know what type of communication vulnerabilities do you have. These are four questions you need to ask. Are you:

• Idea or evidence?
• Direct or diplomatic?
• Think about it or go all in? 
• Accept a map or blaze your own trail? 

Each of these questions may indicate a communication vulnerability. If you have more than one, you need to beware. If you have 3 or 4 you may be especially vulnerable. You may want to keep score for yourself. 

Are you an Idea person or Evidence person?

Some people are caught up in ideas. As long as they like the idea they could care less about the evidence. It's much like ideology, or as Stephen Colbert put it "Truthiness". Others are more about the evidence, and refuse to commit to an idea until they see enough.

In general, scammers prefer "idea person" as they are much easier to sell to. Once they sell the "idea",  the "idea person" will look for evidence to convince him- or herself.

Scams often involve a nebulous high concept (the "idea") that sounds logical and feasible, but in reality have tons of complexities that most people are not aware of or are impossible to research without being a professional.  The evidence people would want more evidence, while idea people would just accept the idea without further proof.

If you're an "idea" person, add 1 to your score.


Are you a direct person or a diplomatic person? 

Do you prefer cutting straight to the point, or do you prefer a bit more socialization?

Scammers prefer those of you who socialized, as they want to hit you with (real or fake) social proof and exploit various cognitive biases that all people have. They can also distract you with fancy displays and language, bandwagon effect, crowd hysteria, shilling, and other tricks.

Scammers also don't want any "direct" person to ask questions about more evidence. If you are too diplomatic you may never get any evidence, or just enough to convince yourself.

Scams often involve fancy events, elaborate presentations, exotic locations, and so on, where you mingle with people who were already convinced of the "idea" (see above).

If you're a diplomatic person, add 1.

Scam Psychology: Charlie Munger on How You Screw Up: Part 3 of 6

Charlie Munger (Photo credit: Wikipedia)

You may have heard of Charlie Munger. But if you haven't, you should have heard of his partner: Warren Buffet, one of the 5 richest man in the world.  In 1995, Charlie Munger gave a speech at Harvard... about how people misjudge things. Here's my personal interpretation of his lessons, as applied to network marketing. You can read the full speech.  Please also check out the previous sections 1-4, and 5-8

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In the speech given at Harvard in 1995, Charlie Munger identified what he called "24 standard causes of human misjudgment." What he really meant is "24 reasons why you screw up".  Here is 9 through 12

9) Failure to Recognize Contrast Bias

Contrast bias is simple to explain... If I give you one item and ask you to rate it, you will give your honest opinion. However, if I have you rate that item, plus an HORRIBLE item, that original item will be rated higher, on the average, because there's a contrasting item.

Here's a simple experiment by Professor Cialdini. Two buckets of water, one quite cold, one quite hot (neither will actually harm). Volunteers are asked to put one hand in hot water and one hand in cold water for 5-10 seconds. Then both are removed and placed in the same bucket of water. The hand what was in hot water now feels cold, and the hand what was in cold water now feels warm/hot, but they are feeling the SAME bucket of water. It's the contrast that makes the water feel hot or cold.

And this experience shows up everywhere. It's often recommended in some pickup artistry books that you bring along an ugly friend or two to make yourself look better. This is the same idea: contrast.

A somewhat anecdotal and apocryphal real estate sales technique if you want to get rid of a not-so-good property is you show the prospects two really awful properties, have them go tsk-tsk and shake their head, then you take them to this "better" property, and they'll probably bite.

On the flip side, without a contrast or a measure against a neutral background (control group), you may not be aware of creeping changes. This can be termed "anti-contrast bias".

Then there's the "boiled frog" urban legend, where the claim is if you put a frog in a pot of water, but you cook it VERY VERY slowly, the frog will never jump out. It's not true, but it's an interesting legend and illustrates this point. You can "creep" in changes and if the movement is small enough it may escape notice.

So beware of this being used on you... Either a special contrast example is used to make a position to look better or worse than it really is... this coercing a bias, or someone tried to "creep" in some changes and rely on your momentum bias to say nothing.

Scam Psychology: Can Your Spot Your Own Self-Delusions?

Huff-Post has a great short article on 5 self-delusions you need to spot in yourself.

Right there at #3 is "money for nothing". That is the heart of all money scams.

Read it. Learn from it.