How kind-hearted young fall for scams

PUBLISHED : Monday, 22 February, 2010, 12:00am
UPDATED : Monday, 22 February, 2010, 12:00am

Scarcely a week seems to go by without its crop of horror stories about people falling for scams. Cheap travel packages to nowhere. Empty promises of modelling careers. Meek young people browbeaten into signing extortionate contracts. We imagine ourselves in these situations and say: 'I'd never fall for that.' Oh really?

The South China Morning Post set out to learn why scams continue to entrap scores of people every year; why the supply of suckers never seems to run out. The following profiles of victims reveal broad patterns of common characteristics. If you are in your early 20s, kind-hearted and not averse to giving out small favours, you had better take note.

Based on the scenarios of recent scams exposed in the media, psychologists say shy and non-assertive young people are most likely to fall prey to scams. Being impressionable, they tend not to doubt the sales pitch of hucksters in the initial stage of a scam. Once under pressure, they buckle and succumb easily to threats. The police say street deceptions, modelling frauds and timeshare schemes where high-pressure sales tactics are used to urge customers to sign an agreement are common types of scams.

The pattern of the scams is similar, with victims being approached through unsolicited calls or street encounters for help in filling in questionnaires. A follow-up call is made days later, offering free coupons for help with questionnaires. Victims are then enticed to a location where young salespeople of the opposite sex are engaged to chat with and soften them up. Coercion tactics are then used by senior personnel to force transactions. When victims report the scams to police, they are turned away because they fail to produce evidence of deception.

The Consumer Council received 5,568 complaints involving unscrupulous sales tactics in the services sector from January to November last year. Police figures show 52 cases of street deception were reported in the same period, but only one case of timeshare fraud and three modelling scams. Of the police cases, 17 resulted in convictions for street deception, with no convictions recorded for timeshare or modelling scams.

Chris, the victim of a modelling scam, set up a website in 2003 for people to share their experiences of being duped. The site has recorded more than 200 victims of modelling scams, 90 per cent of whom were in their early 20s when duped. 'Almost all the victims were turned away by the police,' Chris said. 'The officer asks whether they pointed a gun at you. He says 'You could have left but you paid voluntarily'.'

Chris, a 29-year-old accountant, was approached six years ago in Tsim Sha Tsui by a modelling 'scout' who said part-time jobs were available for her. Once trapped in their office, she was forced to pay for photo shoots and hairstyling and cosmetics packages that could give her an image overhaul for her future modelling jobs. Not until she paid HK$30,000 was she allowed to leave.

Ben was one of 16 victims in a collective lawsuit against a timeshare travel agency lodged with the District Court in August last year. Thirteen were in their early 20s when they were scammed. The IT programmer, now 25, lost a total of HK$28,800 in a travel scheme involving paying by instalments for stays at hotels and resorts - which turned out not to exist when he tried to book a room.

His troubles began with an innocuous phone call two years ago posing as a survey on the city's smoking ban. In a follow-up call several days later he was offered free coupons worth HK$500 in return for his help. Then a young and attractive saleswoman chatted with him for an hour about his personal life before another salesperson came to offer him a travel package costing HK$300,000.

'I said I didn't have any money and they kept marking down the price until it was just HK$2,000 per month for four years. I still said no and then they scolded the young saleswoman in front of me and said she had to pay on my behalf as my account had already been opened. As I just wanted to leave and didn't want the saleswoman to bear the cost of my account, I signed the English contract, which I couldn't read, and gave them my credit card.'

Ben reported the scam to police, who did not accept his case and told him to file for damages in the Small Claims Tribunal instead. He set up a website and got together a band of 16 people who were duped by the same company. Their case was later transferred from the tribunal to the District Court. They finally decided to drop the lawsuit in December, without having won any compensation from the company.

'It dragged on for too long. They countersued us for failing to pay for the outstanding amounts in the contract. The Consumer Council gave us no help and we didn't have the money to carry on the lawsuit,' said another victim, a Ms Ho, who lost HK$13,000 in the scam. Ho blamed her 'soft-heartedness' for the trauma. 'The man said he would fall short of his quota if I didn't go to collect the coupons,' she said.

Clinical psychologist Sarah Ip Miu-yin said friendly and shy young people were most at risk from scams. 'They don't mind helping others out,' she said. 'They are not assertive and don't know how to stand up to aggressive people. Once they are trapped in a location, they can't logically analyse a situation under pressure. The managers who coerce them into signing contracts are like authority figures to them. Spouting legal threats and complex contractual terms, they have the young victims eating out of their hands.'

Winton Au Wing-tung, associate professor in psychology at Chinese University, said the use of young salespeople of the opposite sex in the initial part of a scam was designed to induce empathy in the victim. 'When the manager threatens to shift the cost to the young saleswoman, the male victim will feel guilty.'

The prevalence of scams involving unscrupulous sales tactics is due to a legal loophole. At present there is no clear legal definition of what constitutes unscrupulous sales tactics. Only employers who fail to pay a salary to employees are criminally liable for failure to fulfil contracts. Police turn away complainants on the ground that the cases involve no criminal factors.

Victims in contractual disputes have to seek damages through civil litigation. But the long time it takes for a lawsuit to be completed, and a lack of legal knowledge and cash for lawyers, mean many victims drop their lawsuits midway through the quest for compensation rather than risk ultimately losing and having to pay a huge legal bill.

Dr Elizabeth Quat, convenor of the Democratic Alliance for the Betterment and Progress of Hong Kong's consumer watchdog, said most of the victims in the cases her group was handling were young people. 'We got our first case of a travel scam in March last year. Now we have over 400 travel cases, over 40 modelling cases and over 300 cases about beauty and slimming companies.

'Police will only take up cases if there's evidence to show deception. But the burden of proof of deception is on the consumers. When they go to the police, they usually don't remember what, exactly, happened as they were being subjected to a high- pressure environment.'

A police spokesman said not every report of a suspected scam turned out to be a criminal case. 'If information or evidence is obtained to support the allegation that a company is committing criminal offences, then police will take appropriate action.

The government is reviewing consumer protection laws aimed at cracking down on unscrupulous sales tactics in the services sector. Legislators are calling for a cooling-off period for consumers to quit a service contract and get a full refund. A legal definition of improper sales practices will be included in a legislative amendment to the Trade Description Ordinance, set to be put forward in the 2010-11 legislative year.

Taking the bait

Profile of scam victims
- Young people in early 20s
- Kind-hearted
- Gullible
- Shy and unassertive
- Uncertain about one's rights
- Prone to feeling guilty
- Prone to buckle under stress
- Simple and unsophisticated
- Prone to overestimate one' s ability to fend off temptations
- Prone to flattery

Common scam tactics
- A first call/street encounter asking for help in filling out questionnaires
- A follow-up call several days later offering free coupons for the help
- Use of flattering remarks to make victims feel good about themselves
- Blasting high-volume music in a room full of 'clients' when victims go to collect coupons
- Use of young salespeople of the opposite sex to soften up targets
- Parading flashy images of products, travel destinations and possible job offers in the entertainment industry
- Asking the victims to produce ID cards and credit cards for record-keeping
- Use of coercion tactics by senior personnel to force signing of contracts
- Blaming the young salespeople in front of victims to make victims feel guilty
- Threatening legal action if victims refuse to comply

Five of the most common scams handled by police

The sale of fake herbs
Street hucksters exaggerate the medicinal value of herbs and lure victims to buy and resell them for huge profits

Fake timeshare schemes
Victims are lured to travel or other marketing agencies. In a high-pressure environment they are forced to sign contracts to a timeshare scheme

Delivery of unsolicited goods
Schools or companies receive unsolicited goods and sign receipts. Unscrupulous suppliers use receipts to claim payment and threaten legal action if refused

Bogus modelling agencies
Victims are persuaded to pay for training courses or beauty treatments for future lucrative modelling jobs

Pyramid investment scheme
Victims are persuaded to pay a membership fee and recruit new members from friends or relatives to get dividends