Monday, March 24, 2014

Gullibility, Distractibility, And Availability In Undue Influence

Dr. Patrick O’Reilly, author of Undue Influence: Cons, Scams and Mind Control, shared his wisdom today at the Commonwealth Club.  I learned enough about three major definitions - gullibility, distractibility, and the availability heuristic - to reduce my own chances of getting ripped off.

Gullibility is our natural state during periods of emotional vulnerability.  We accept presented information less critically when we are weakened by stress or trauma.  Distractibility from noise, crowds, and everyday details diverts our attention from critical thinking.  The availability heuristic is the human tendency to accept vivid imagery that has an emotional impact.  These biases combine with other forces to enable con artists to rip people off.  Read Undue Influence for more details on fallacies and traps.  

This line of work is relevant to me for a couple of reasons.  I first encountered multilevel marketing (MLM) scams during my active duty military service in the mid-1990s.  I knew enough about how these schemes worked from the junk mail I used to receive in college.  Several fellow officers pitched me MLM ideas of various stripes, all of which I rejected once I realized what they were.  I was very disappointed that people who pledged to live honorable lives were trying to prey on people junior to them in rank.  I was very polite and professional when I declined all further contact with these losers.  

My most severe encounter with fraud came a few years ago in San Francisco.  One very charming but disgusting veteran wore falsified valorous decorations on his uniform while defrauding donors who supported veterans organizations.  American Legion Post 911 in San Francisco was the vehicle for this scam.  That post's continued existence brings shame to the veterans' community of San Francisco.  The victims and incurious dupes who continue to enable the primary con artist's fraud don't strike me as particularly vulnerable or easily distracted.  They are mostly accomplished professionals, making their continued collaboration with a scammer all the more inexplicable.  Social proof probably plays a role among people who can't bring themselves to admit being hoodwinked over cocktails at their private club.  I accept that they don't want to explain themselves to me.  They will eventually have to explain themselves in court.

Bernard Madoff's Ponzi scheme proved that even successful investors fail to perform due diligence when someone in an affinity group possesses asymmetric information.  That's the best explanation I can find for high-profile fraud among the elite.  Extraordinary claims of fantastic results may seem completely plausible to high achievers who are accustomed to obtaining extraordinary results themselves.  It takes a Herculean effort to show them the truth.  I'm up to that challenge and I have facts on my side.  Bring on the "Mickey Mouse" opposition.