Monday, June 29, 2015

Scam Psychology: Know Just Enough to be Dangerous (to yourself and others)

Do you know just enough to be dangerous? You don't think so?

You are probably wrong, as scientists have LONG documented "Dunning-Kruger Effect". Basically, for a given skill, incompetent people will
  • fail to recognize their own lack of skill
  • fail to recognize genuine skill in others
  • fail to recognize extremity of their inadequacy
Basically, you are so incompetent, you don't even recognize that you ARE incompetent. It's be like a person born and grew up near-sighted, that he thinks the world really is slightly blurry, and didn't even realize he needed glasses. 

This is related to, but is not the same as overconfidence effect, in that a person always thinks his confidence in his or her judgments is greater than the ACCURACY of those judgments. This is especially true when the confidence is high. People who were 100% sure of their answer in a certain test that turned out to be only 80% right are guilty of such overconfidence.

This is very common in scams, where the victims were recruited to be a co-conspirator, (i.e. to also recruit, for pyramid and Ponzi schemes, and/or to act as "anecdote witnesses", promoters, and so on), where the victim, overconfident in his or her skills to spot a scam (often armed with such myths as "we have a product, thus we can't be a pyramid scheme", or "I got paid, thus it can't be a scam"), failed to even realize s/he is not competent to even recognize his/her incompetence and failed to recognize proper advice from others.

The scammers are experts in making you believe you made the right decision(s) all along by give you the mushroom treatment, through "learned optimism", except they do it through lie and deceit.

Learned Optimism Through Lie and Deceit

Learned optimism is can be thought of as teaching you "optimism" by feeding you baby steps, including letting you win, through employment of shills and/or other deceit, to make you believe you are far more competent than you think you are. That you can do no wrong.

A lot of seminars selling "opportunities" often employ shills that will rush the desk after hearing "limited quantities available". Their job is to make you join them and buy some of that "limited quantity" (which is NOT limited after all) and think you got a good deal that nobody else will get.

Pyramid schemes often make their first payout very easy to accomplish, and HYIPs often pay out the early joiners very promptly, to convince people that it can pay and continue paying. Though often the earliest joiners are insiders (who got special deals from the owner to join in early and/or promote the deals to their minions) or the "winners" don't actually exist as they are impossible to verify.

Every scam tell you "it's a sure win", "you can't lose", "guaranteed", "backed by _____", and so on.

Ever heard of the "Magic Cheese Ponzi"? Or the "Pigeon Ponzi"? How about the "Emu Ponzi" and "Sheep Ponzi"? Or the "Milk Ponzi"? You probably never heard of these, or zillion more Ponzi schemes like them. What they have in common is they had people believing that people should give them money for their "can't lose" ways to make money.

They all lied. There is no market for the alleged "magic cheese" to be bought by French cosmetic firms. There is no market for the pigeons bred and most had to be euthanized. Emu and sheep (as well as goat) Ponzi destroyed many poor farmers in India as there were no market for their products. There was no contract to supply milk to Disneyland.

Or for cases closer to home, Zeek Rewards lied about its penny auctions to be so profitable to be sharing the profits. TelexFree lied about the sales of the VOIP packages being so profitable to be sharing profits. And so on and so forth.

Yet these scams collected dozens to MILLIONS of victims (1.9 million in TelexFree, not counting the ones scammed by the Brazilian branch of TelexFree) to the tune of BILLIONS of dollars. Are all these victims stupid? Of course not. Most are incompetent to realize they are incompetent.

Some of the more... theatrical examples of the Dunning-Kruger Effect were the "Telambo" (a TelexFree fan who dress up like Rambo), an TelexFree ice cream sundae (named by an ice cream vendor)... They were so convinced they were right, they can't even consider the possibility that they've been lied to all along.

Similar theatrical examples happened with ZeekRewards, where some people started a petition for the authorities to "leave Zeek alone" after it was closed by Secret Service and SEC raids. One such fan even left a note on the Zeek window which says "We forgive you. Please restructure and save our dreams. Signed: zeek affiliate".

This fan was so convinced that s/he was right about Zeek being a legal and profitable enterprise, s/he chose to believe the permanent closure of Zeek by law enforcement as a temporary setback that can be solved with a bankruptcy and reorganization. Indeed, the initial Secret Service and SEC staff that closed Zeek and started carting off boxes of documents were misidentified by Zeek fans as "Zeek staff", and the fans told the local papers so. It wasn't until the next day, when a Secret Service agent started taking statements in front of Zeek's front door that most people realize Zeek was done for.

So how can such people be dangerous? When they are so self-righteous (remember, they are overconfident, that they CANNOT CONCEIVE that they could be wrong) they are de facto accomplices to the scammers, by recruiting additional victims (often, friends and family) and passing on anecdotes like "it was so easy!" "I did it and so can you!" or even "The product works great!" They also will not listen to advice from people who knew better, as they also CANNOT CONCEIVE the notion that other people could know more about the truth than they do. They will even automatically create reasons on why others CANNOT know more than they do, including "you must hate the owner", "you can't comment on what you haven't tried", "you are a part of conspiracy", and so on.

What Can You Learn From Them

Can you learn from these victims and not to be like them? It may be difficult as this runs counter to much of MLM culture.

Much of MLM and promotion in general is about confidence, yet as we explained earlier, high confidence about the wrong things are just... epic fails. And admitting one's lack of competence is completely against the notion of confidence.

Much of MLM is also about "avoid negativity", and this exacerbates one's inability to recognize competence of others (and your own incompetence), as you are basically ignoring people telling you that you are wrong.

As Greek philosopher Epicetus once said, "If one believes he knew all there is to know, then he will learn nothing."  He is ignorant of his own ignorance.

Are you ignorant of your own ignorance? How will you find out and what will do about it?

No comments:

Post a Comment