It’s that time of year—tax season is upon us! With words you can trigger a storm of feelings. Whether you’re looking to receive a big refund, or simply dreading the possible mistakes with hopeful, hopeful gnawing anxiety. During a time when economic anxiety is at an all-time high across the country, we as seniors are, sadly, perfect candidates for these complex scams. As a journalist immersed in the world of finance and the psychology behind it, I've seen firsthand how these fraudsters operate, and it's not just about stealing information. It's about manipulating minds.
What is it that makes these tax scams so successful? It’s not just a matter of technical sleight-of-hand. It’s the perversion of basic psychological rule that leaves all the chips away from even a little bit makes the rest of us a target. That’s why knowing these tactics is the best first line of defense. In this webinar, I’ll share the lessons I’ve learned and the stories I’ve observed to equip you, like never before, with the knowledge to safeguard yourself.
The first and most widely used behavior change tactic is using authority and trust. Imagine the impact of those emails or phone calls pretending to be from the Australian Tax Office (ATO). Those bad actors rely on the genuine reverence we hold for government institutions. They obfuscate with official-sounding language, leak proper-looking citations of esoteric regulations, and craft an atmosphere of legitimacy that gasses our righteous skepticism. Trust me, I’ve taken those calls. Even knowing this fact, I still find myself battling an instinctive surge of distress every time I hear the word, “Wait, am I being bad?
Another potent weapon in the scammer’s toolbox is reciprocity. Perhaps they even provide assistance cutting through a complex IRS tax enforcement question. Or they may just falsely promise you the biggest possible refund. A big but subtle mistake. This seemingly altruistic move breeds the sense of obligation—the feeling that you now owe them something. By doing this, the scammers take our natural tendency to want to return a favor and twist it into a weapon against us. Once I witnessed a fraud artist preying on an older woman. They postured as good actors in the industry, then a hot second later started demanding exorbitant fees for their non-existent services.
The promise of possibility and innovation is as powerful. When money is tight, promises of quick cash or a bigger than expected refund can blind even the best of us. Fraudsters take advantage of our desire for easy outs. They know that the promise of a quick buck can short circuit common sense. I interviewed victims who had a feeling in their gut that something was off. The temptation of that enormous reward was just too hard to pass up.
Anxiety and fear are just as easily deployed to force action. A scary-looking email telling you that you owe $100,000 in back taxes or will be arrested could work miracles. Scammers will often try to create a sense of urgency to pressure you into acting quickly, before you stop to consider your options. They know that fear is a tool that can paralyze and suspend critical thinking, clouding your judgement and making you more susceptible to doing what they want. An email that was so threatening it made the recipient feel that they had to leave their home. The scope of the panic they experienced was unprecedented and profound.
A scammer may first offer to fix a simple problem for free, putting you in their debt. This seemingly innocuous “small favor” lays the groundwork for bigger, more predatory asks later on. It’s a pretty diabolical move that plays upon our natural aversion to social discord together with our fear of being beholden.
Scammers similarly leverage fear to provoke a rapid, emotional response that short-circuits rational thought. When adding in financial stress created by the burdens of tax season, this vulnerability is only intensified. People start to be more distraught and vulnerable to fraudulent schemes. This is partly why adults age 65 and older are frequently impersonated. They’re more emotionally committed to their financial security, even more so as they near retirement age.
In addition to these psychological tricks, there are more technical methods that scammers use. The “foot-in-the-door” strategy starts with a modest request, enough to establish trust before increasing the stakes to a bigger ask. Understanding reciprocity helps recognize how scammers create obligation, while being aware of the "social debt" concept reveals how they manipulate feelings of indebtedness.
Understanding the use of authority and urgency is key. You know the drill. Scammers often impersonate well-known organizations, like the IRS. They employ high-handed moralizing and a threat of deadlines to strong-arm folks into submission. Watch out for generalized salutations in emails, like “Dear Valued Customer,” which should set off alarm bells.
So, what steps should you take to protect yourself? File your taxes as early as you can so that fraudsters don’t have a chance to use your information. Always double-check any communications that claim to be from ATO or other institutions. Never engage with unknown emails or phone calls. When in doubt, get expert advice from experienced tax professionals with the appropriate qualifications and credentials.
In my humble experience, elves aside, knowledge seems to be the most effective weapon we have against these psychological manipulators. Understanding how they target your emotions and exploit your trust empowers you to recognize the red flags and resist their influence. Keep your eyes down during tax season and don’t end up a victim of fraud. Consult with experts where appropriate to help you through the process and safeguard your organization from becoming a victim.
The battle against tax scams isn’t simply about protecting our wallets – it’s about protecting our peace of mind. By being aware of the dark psychology that’s lurking behind every corner, we can take back control and get through this otherwise tense period with more confidence and safety.
