Sunday, February 3, 2013

How Your Overconfidence Hurts You

One of the ways scammers get you is to make you overconfident in your own ability to "pick the right thing". This works for virtually all financial frauds (or even all frauds), but seniors are especially vulnerable as they believe their experience left them better prepared to detect fraud, even as their cognitive functions and mental abilities declined.

Read more about Seniors and Overconfidence Leading to Victimization

Overconfidence is often a simple inability to recognize or admit that you don't know enough about a certain subject you need to make decision on. Instead of holding off the decision until you have consulted experts and/or make more detailed inquiries, you were rushed / induced / enticed / hurried into making a faulty decision, by exploiting time pressure, overconfidence, attribute substitution, and other cognitive biases.

And victims who can't recognize their own weakness are overconfident indeed, whether they were lead on / pushed over by a conman is almost besides the point. It takes two to tango, so to speak. One does the scamming, and the other needs to be scammed. If one refused to be scammed, then scammers have nothing to do except wasting time.

So how *do* you avoid being overconfident?

Here are some tips:
  • If you don't really understand, ask
  • If you got brushed off, diverted into some other topic, or otherwise NOT get the answer you want, do NOT proceed
  • Don't let embarrassment and/or peer pressure and such influence you
  • Bring level headed friend(s) to "check" you
  • Recognize common emotional triggers, diversion / derail tactics, and such for what they are
Be careful out there
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