Outgoing, gullible, and risk-tolerant individuals are at a higher risk of fraud. People with inflated self-esteem and low comfort with math and finance are also vulnerable. Fraudsters manipulate victims by gaining their trust and promising exaggerated returns on investment.
There are three specific actions that increase your risk of fraud: personality, gullibility, and risk tolerance. Fraud occurs when a person is deceived or deceived for someone else’s personal or financial gain. Everyone is at risk of being a victim of fraud, but these risks are influenced by your choices and behavior.
A person who is outgoing, has an inflated level of self-esteem, and is outside their comfort zone has a higher risk of fraud. Outgoing people enjoy interacting with others. They are outgoing, approachable, and willingly share personal information with a wide variety of people.
An inflated level of self-esteem can be perceived as bragging or boasting. People who feel the need to do this refuse to acknowledge warning signs or messages from others. They are confident in their superior ability to read people and substitute their own judgment for the advice or experiences of others. This increases the risk of fraud, as they will continue to pursue a relationship or business proposition despite other people’s bad experiences or warnings.
The basis of most frauds is the possibility of financial gain. There is a wide range of skills and confidence in financial and investment matters among the general public. Many people report low comfort with math and finance, which increases their risk of fraud. This scenario makes it relatively easy to manipulate people using complex mathematics, promising exaggerated returns on investment, and including lots of numerical values in any presentation or conversation.
Outgoing people are often willing to participate in a financial scheme based on the strength of a personal relationship, rather than an impersonal evaluation of the numbers. By gaining the person’s trust, scammers can manipulate the victim into providing funds. Fraud victims often report feeling like something was wrong with the proposal, but they continued anyway, according to the report.
Gullibility is a person’s general willingness to suspend their assessment of a situation in favor of someone else. An unwillingness to acknowledge bad judgment and mistakes increases the risk of being lied to or scammed again. Gullible people have a reduced ability to assess their own level of responsibility and prefer to allow others to take control of a situation.
Risk tolerance is your personal comfort level with different levels of risk. A low risk tolerance is a trait associated with people who are unwilling to try new things or take risks. People with a high risk tolerance believe they have a wide range of experiences and enjoy the thrill of the unknown. All fraud schemes are high-risk propositions that promise a greater rate of return than is possible from a traditional financial product.
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