Why Experts Fall for Scams
Research for the UK consumer regulator found scam victims often knew more than average about the scam's subject, and confidence can be the weak point.
Key takeaways
- The UK Office of Fair Trading's 2009 report found, in interviews, that scam victims often had better than average knowledge of the scam's subject.
- Victims reported putting more effort into analysing scam material, which the authors read as a sign of being drawn in.
- In a 2026 FINRA Foundation survey of 1,004 Americans, 71 per cent were highly confident they could spot fraud, and 63 per cent would invest in a guaranteed 25 per cent return.
- A 2020 study of 1,220 older Americans found financial literacy was not significantly linked to fraud victimisation.
The letter says you have won a prize draw. To release the money, you need to pay a small handling fee. Many people bin it at once.
The people who fall for scams are often imagined as naive, elderly or careless. Research commissioned by the United Kingdom's consumer regulator found something less comfortable: scam victims often know more than average about the subject of the scam. A later survey suggests that the most confident people are not necessarily the safest either.
Aja Raden makes the point in The Truth About Lies, a history of cons and hoaxes: expertise can be a vulnerability rather than a defence. She gives no source for the claim. There is evidence for a version of it, though a narrower one than the book's.
What the UK regulator's researchers found
In 2009 the Office of Fair Trading published The Psychology of Scams, a report prepared by a team at the University of Exeter led by Stephen Lea. It drew on four kinds of evidence: in-depth interviews with people who had lost money to scams, an analysis of 583 real scam communications, two questionnaire surveys of the public, and an experiment in which simulated prize-draw letters were sent to 10,000 people.
The finding the authors themselves called counter-intuitive came from the interviews. In the report's words, "scam victims often have better than average background knowledge in the area of the scam content". Among the people interviewed, victims of lottery scams had often played legitimate prize draws and lotteries, and victims of investment scams often had some knowledge of investing. "Such knowledge can increase rather than decrease the risk of becoming a victim."
That finding comes from 25 interviews with people who had lost money, and the report attaches no percentage to it. It is a pattern noticed in careful conversations, not a measured effect, and it should be read with that weight. Interviews can reveal how people were caught; they cannot say how common each route is. But it was not the only surprise.
Thinking hard about a scam may be a sign of having already taken the bait.
The questionnaires found that victims reported putting more mental effort into analysing scam material than non-victims did. The authors offered a plausible reason for this that does not flatter the victims: people who engage with a scam are drawn into it, while people who are not victims tend to throw the letter away without reading it closely. Thinking hard about a scam, in other words, may be a sign of having already taken the bait.
Effort is not the same as scepticism. The report also notes that the cognitive-effort measure was less reliable in one of the two survey waves.
And past victims were more likely to respond again. In the prize-draw experiment, people who had responded to scams before showed more interest in responding to the new one. The report cites earlier research by the regulator estimating that a victim had a 30 per cent chance of falling for another scam within 12 months. The authors also note that the people most at risk were not poor decision-makers in general. Many had successful business or professional careers.
Confidence can be counted
Expertise is hard to measure in a survey. Confidence is easier, and it is the part of the story with numbers attached.
A 2013 paper from the same research team, led by Peter Fischer in the Journal of Applied Social Psychology, compared people who reported having complied with scams in the past with those who had not. The differences were in how they responded to very large prizes, how much pleasure they took in the thought of winning, how much they relied on signs of official authority, and in their self-confidence. Some of these differences, the authors suggested, looked like stable traits rather than one-off lapses.
A 2026 survey by the Investor Education Foundation of the Financial Industry Regulatory Authority in the United States puts the confidence problem starkly. Of 1,004 American adults, 71 per cent said they were highly confident they could detect financial fraud. Meanwhile 63 per cent said they would definitely or probably invest in an offer promising a guaranteed, risk-free return of 25 per cent a year for five years, which is a textbook sign of fraud. The most confident groups were among the least likely to spot it. Among people who held investments, 75 per cent were highly confident and 72 per cent would have invested.
That survey is a short research brief rather than a peer-reviewed paper, and holding investments is not the same as being an expert. But it points to a related gap, between how sure people feel and how they judge an offer.
Where knowing more stops helping
It would be easy to turn this into a slogan that experts are gullible. The evidence does not support that, and one large study found no link in either direction on a related question.
Marguerite DeLiema and colleagues, writing in the Journals of Gerontology in 2020, analysed 1,220 Americans aged 50 and over from the Health and Retirement Study. About 5 per cent reported investment fraud and about 4 per cent prize or lottery fraud. Greater wealth was associated with investment fraud. Financial literacy, which is closer to expertise than confidence is, was not significantly associated with victimisation in either direction.
Put together, the studies suggest a narrower claim than Raden's. Knowledge does not protect people from scams that target their area of knowledge, and the confidence that comes with it may lower their guard. Knowing a field gives a fraudster more to work with: the right vocabulary, the plausible detail, the sense that this offer is the kind of thing an informed person would recognise as a real opportunity.
The Exeter team linked this to the overconfidence effect. Elsewhere in the report they write that "as predicted from the overconfidence effect, the background knowledge scam victims had about a specific area (for example, investment decisions) often led to them falling for a scam that addressed that specific area." Our reading is that knowledge can raise confidence faster than it raises accuracy, and that scams that sit inside a person's area of knowledge are the ones that exploit the gap.
That is why the best scams are tailored. A lottery scam uses the language of real lotteries. An investment scam borrows the look of real investment documents. The more familiar the format, the more an experienced person relies on recognition rather than checking, and recognition is exactly what a good forgery is built to pass.
Using what you know against scams
The defence is to stop treating familiarity as verification.
When an offer arrives in a field you know well, treat your sense that it looks right as information about the presentation, not about the offer. Check it through a channel the sender did not supply: a phone number you already have, a regulator's register, a website you type in yourself.
Notice when you are working hard to evaluate something that arrived unasked. The British research suggests that effort is a warning sign in itself, because people who are not drawn in rarely spend long on it.
Be most careful about the offers that make you feel most competent. Scams aimed at experts flatter the expertise. A promised return that would look too good to a beginner can look merely attractive to someone who knows how markets usually behave. And if you have been caught once, assume you are a target again, because the evidence suggests repeat targeting is common.
Confidence is useful in most of life. In a scam it is part of the material the fraudster is working with, and that applies to experts as much as anyone.
Common questions
Are experts more likely to fall for scams?
In interviews for the UK Office of Fair Trading's 2009 report, scam victims often had better than average knowledge of the area the scam targeted. The finding is qualitative and unquantified, and a 2020 study of 1,220 older Americans found financial literacy was not significantly linked to fraud victimisation.
Does overconfidence make people vulnerable to fraud?
The evidence suggests it can. In a 2026 FINRA Foundation survey of 1,004 American adults, 71 per cent were highly confident they could detect fraud, and 63 per cent would invest in a guaranteed 25 per cent annual return, a classic fraud sign.
Are scam victims likely to be targeted again?
Yes. The 2009 report found previous responders were more likely to respond again, and cites earlier estimates of a 30 per cent chance of falling for another scam within 12 months.
Sources
Office of Fair Trading (2009). The Psychology of Scams: Provoking and Committing Errors of Judgement (OFT1070). Prepared by the University of Exeter School of Psychology: Lea, S. E. G., Fischer, P., & Evans, K. M. Full report read 2026-10-11 via the web archive: http://web.archive.org/web/20131018022026/http://www.oft.gov.uk/shared_oft/reports/consumer_protection/oft1070.pdf. Paras 1.8, 1.9, 1.12, 6.21, 10.20.
Fischer, P., Lea, S. E. G., & Evans, K. M. (2013). 'Why do individuals respond to fraudulent scam communications and lose money? The psychological determinants of scam compliance.' Journal of Applied Social Psychology, 43(10), 2060-2072. doi:10.1111/jasp.12158.
FINRA Investor Education Foundation (2026). Consumer Insights: Money and Investing, 'Confident you can detect financial fraud? Think again.' Research brief, not peer reviewed. 1,004 US adults, surveyed September 2025. https://www.finrafoundation.org/sites/finrafoundation/files/2026-03/Consumer_Insights_Brief_Confident_You_Can_Detect_Fraud_Think_Again.pdf
DeLiema, M., Deevy, M., Lusardi, A., & Mitchell, O. S. (2020). 'Financial fraud among older Americans: evidence and implications.' Journals of Gerontology: Series B, 75(4), 861-868. doi:10.1093/geronb/gby151. 1,220 adults aged 50 and over.
Raden, A. (2021). The Truth About Lies. Atlantic Books (UK); St. Martin's Press (US). Read in full by this publication, with a reliability audit. pp. 80 and 89, uncited.
A note on scope: the expertise finding is qualitative and unquantified. The defensive checks are this publication's suggestions.