Consumer Scams: The Right Way to Train Your Staff

There is much discussion around the severe threat of consumer Scams. This is transnational organized crime, driven by massive scam compounds in southeast Asia. Victims are psychologically groomed to transfer millions of dollars. Banks, telcos and digital platforms all must implement controls to help prevent these Scams from occurring.

Detecting the Scam Is Only the Start of the Battle

The Scam controls have already been covered in the whitepaper I wrote—and what gets less attention is what happens after detection. For example, Banks might alert on a suspicious transaction such as:

• an elderly customer doing their first wire and it is $50,000
• or a customer walks into a branch to withdraw $20,000

The spotlight is now turned on the Bank employee who talk with the customer and they must:

• understand what this transaction is about
• understand if it is a Scam
• and finally, to convince the customer to cancel the transaction if it appears to be one

This final step is the moment when all of the Scam controls will bear fruit or collapse.

The Psychology of Why People Believe in the Scammers

In August I had a chance to talk with two Canadian psychologists who specialize in Scam Prevention. Kelly Peters (Behavioural Economics Leader and Partner) and Michelle Hilscher, PhD (Senior Manager, 
Behavioural Economics) work in Deloitte’s Behavioral Economics Group in Toronto, and many thanks to the Canadian Bankers Association for the introduction.

Kelly and Michelle talked about how to train bank staff for when they interact with customers who appear to be Scam Victims. The goal is to prevent the Scam monies from leaving the bank and saving the customer from loss.

Kelly reminded me that people know the right thing to do. But life injects itself at times with emotion, pain, grief, pressure, loneliness and shame, among other 'runaway train’ events. It is during these events that Scammers will be most successful as the customer is vulnerable

When I asked how bank staff should respond to a Scam alert, Kelly said:

• “do the what the fraudsters are doing”
• “the fraudsters have mastered the psychology of grooming victims”
• “banks need to use that same psychology to help break the spell”
• “banks need to convince the customer they are being Scammed”
• “The bank staff need to meet and beat the Scammers”

She pointed out Scammers effectively exploit psychological factors that Bank staff often overlook when dealing with clients.

The SAFETY Framework

Kelly defined the framework used by Scammers as the SAFETY Framework.

• Social: people are vulnerable because they want social connection and belonging.
• Attractiveness of the offer: the Scammer is offering something exciting and immediate.
• Feelings and emotions: people may be vulnerable because of their emotions and once a Scam involved, get trapped by their emotions.
• Errors (and biases): misestimated probability—people like to use shortcuts to keep their lives simple, but this means they can make mistakes that leave the vulnerable to being Scammed.
• Time (act now!): people act fast under pressure, or act before thinking.
• Yielding Self-Control and Risk-Taking: people sometimes seek out risk and throw caution to the wind, making them vulnerable.

How Can Bank Staff Break the Spell of the Scammers

Michelle then gave specifics on how Bank staff should interact with a customer in the branch or on the phone. If they spot a suspicious transaction (wire, cash withdrawal) she advised:

• Step in as an authority figure.
  
  • be someone the customer can feel comfortable working with.
• You are attempting to offset the Scammer acting as an authority figure.
  
  • This is appropriate on short-cons, where they ‘represent’ the local sheriff or taxing authority.
• Move the discussion to a perspective view.
  
  • Try to put the customer into the ‘shoes of another person.’
  • Ask the customer to think if this happened to one of their friends, how would they think about it?
• Make the customer feel comfortable to pause.
• Normalize the experience.
  
  • Remove the feeling of shame.
  • Reduce the pressure of this moment.
  • Explain these types of events happen to good and smart people.
• It can be appropriate to bring up the liability issue (if you send this money and there is a Scam, it will be solely your loss).
  
  • Do NOT bring this point up at the end of the conversation.
  • Bring it up at the beginning of the conversation.
  • Make it clear you want to help them decide on this issue.
  • You want to give them the feeling you are with them, not against them.
  • Scammers will warn the victim about the Bank trying to stop them.
  • If you bring this liability issue up at the end, you will potentially damage the relationship built up with the victim.

Is Focusing on Customer Liability a Workable Option?

Kelly was asked about giving the customer a Withdrawal Alert Warning Form to sign. The form would include samples of Scam scenarios and warning the customer is fully liable for the loss, with a space for the customer signature.

She said this could have unintended consequences.

• It could make the customer more entrenched to complete the withdrawal.
• It could distance the customer from the bank.

She suggested a better way to address this would be to give the customer an interactive prompt instead:

• An iPad (or go to a branch PC) could present an interactive screen.
• With the help of AI it will go through Scam scenarios.
• Let the customer complete the ‘self-assessment.’
• Real-time prompts appear based on the answers.
• This can help to restore a balance of power between the Bank staff and the customer.

Is there a Best Way to Train Bank Staff?

Kelly and Michelle said that proper staff training is important for staff morale. When staff have these interactions, they feel defeat when they cannot retain the money in the bank and the customer remains a victim. Better training will get a better success rate – the transaction cancelled and customer saved. So, better training is as much for the benefit of the staff themselves as well as the customer.

They emphasized that finding the best approach for each customer interactions will take trial and error, just like how the Scammer worked to master the best grooming pitch. Try, fail, try again in training, not when dealing with real customers

Michelle focused on measuring the success of the training using role playing:

• How many interactions took place?
• How many times was the money saved?
• And how much was saved?
• What type of Scam was it? (Scam type and short vs long con)
• How long are the interactions? (shorter is better if with recovery)

Key Points Any Interaction With a Scam Victim Needs To Consider

In closing I asked Michelle and Kelly what are a few quick pointers for Bank staff, ahead of any training. She said:

1. Have empathy for the customer.
2. Don’t give up when your gut says it is fishy!
3. Remember at the moment of the interdiction, the customer is an agent of the Scammer.

Kelly said it is important for banks to realize that:

• “consumer Scams will get exponentially worse with AI”
• "all channels to effectively deal with customers when there is a Scam alert”
• “help consumers identify these Scams early on”

Final Thoughts

I really enjoyed interviewing Kelly Peters and Michelle Hilscher—it reinforced for me that staff training should be the number one Scam control for banks. But to be successful it really needs to be covering the psychology of:

1. the Scam
2. the customer interdiction

I know many Banks (and of course credit unions and fintechs) are paying much more attention on fighting consumer Scams. I hope this brief article helps frame the importance of effective staff training to help keep the funds for the customer. Bank staff are the first responders for consumer Scams. Make them count!

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Upcoming Webinar

Learn more from Kelly Peters and Michelle Hilscher as they share lessons learned from their work with a leading Canadian bank about how to use behavioral tactics to interrupt scam victimization and ultimately, prevent scam losses.

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