Scam

A scam is a kind of fraud. It works by first gaining the trust of the victims, and then either asking them for money, or other things, or asking them to commit fraud. For this reson, scams are also known as confidence tricks. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men') at the expense of their victims (the 'marks')".^[1]

The shell game dates back at least to Ancient Greece.^[2] William Thompson (1821–1856) was the original "confidence man". Thompson was a clumsy swindler who asked his victims to express confidence in him by giving him money or their watch rather than gaining their confidence in a more nuanced way. A few people trusted Thompson with their money and watches.^[3] Thompson was arrested in July 1849. Reporting about this arrest, James Houston, a reporter for the New York Herald, publicized Thompson by naming him the "Confidence Man".^[3] Although Thompson was an unsuccessful scammer, he gained the reputation as a genius operator mostly because Houston's satirical tone was not understood as such.^[3] The National Police Gazette coined the term "confidence game" a few weeks after Houston first used the name "confidence man".^[3]

In Confessions of a Confidence Man, Edward H. Smith lists the "six definite steps or stages of growth" of a confidence game.^[4] He notes that some steps may be omitted. It is also possible some can be done in a different order than the one shown or carried out simultaneously.

Foundation work

The game must be prepared. This includes hiring of any assistants required and studying the background knowledge needed for the role.

Approach

The victim is approached or contacted.

Build-up

The victim is given an opportunity to profit from participating in a scheme. The victim's greed is encouraged, such that their rational judgment of the situation might be impaired.

Pay-off or convincer

The victim receives a small payout as a demonstration of the scheme's purported effectiveness. This may be a real amount of money or faked in some way (including physically or electronically). In a gambling con, the victim is allowed to win several small bets. In a stock market con, the victim is given fake dividends.

The "hurrah"

A sudden manufactured crisis or change of events forces the victim to act or make a decision immediately. This is the point at which the con succeeds or fails. With a financial scam, the con artist may tell the victim that the "window of opportunity" to make a large investment in the scheme is about to suddenly close forever.

The in-and-in

A conspirator (in on the con, but assumes the role of an interested bystander) puts an amount of money into the same scheme as the victim, to add an appearance of legitimacy. This can reassure the victim, and give the con man greater control when the deal has been completed.

In addition, some games require a "corroboration" step, particularly those involving a fake, but purportedly "rare item" of "great value". This usually includes the use of an accomplice who plays the part of an uninvolved (initially skeptical) third party, who later confirms the claims made by the con man.^[4]

Fraud has rapidly adapted to the Internet. The Internet Crime Complaint Center (IC3) of the FBI received 847,376 reports in 2021 with a reported loss of money of $6.9 billion in the US alone.^[5] The Global Anti Scam Alliance annual Global State of Scam Report, stated that globally $47.8 billion was lost and the number of reported scams increased from 139 million in 2019 to 266 million in 2020.^[6]

Government organizations have set up online fraud reporting websites to build awareness about online scams and help victims make reporting of online fraud easier. Examples are in the United States (FBI IC3, Federal Trade Commission), Australia (ScamWatch ACCC), Singapore (ScamAlert^[7]), United Kingdom (ActionFraud), Netherlands (FraudeHelpdesk^[8]). In addition, several private, non-profit initiatives have been set up to combat online fraud like AA419 (2004), APWG (2004) and ScamAdviser (2012).

• Bell, J. Bowyer; Whaley, Barton (1982). Cheating and Deception (reprint 1991). Transaction Publishers. ISBN 978-0887388682.
• Blundell, Nigel (1984) [1982]. The World's Greatest Crooks and Conmen and other mischievous malefactors. Octopus Books. ISBN 978-0706421446.
• Dillon, Eamon (2008) [2008]. The Fraudsters: Sharks and Charlatans – How Con Artists Make Their Money. Merlin Publishing. ISBN 978-1903582824.
• Ford, Charles V. (1999) [1999]. Lies! Lies!! Lies!!!: The Psychology of Deceit. American Psychiatric. ISBN 978-0880489973.
• Henderson, Les (2000). Crimes of Persuasion: Schemes, scams, frauds. Coyote Ridge. ISBN 978-0968713303.
• Kaminski, Marek M. (2004). Games Prisoners Play. Princeton: Princeton University Press. ISBN 978-0691117218.
• Konnikova, Maria (2016). The Confidence Game: Why We Fall for It...Every Time. Viking. ISBN 978-0525427414.
• Lazaroff, Steven; Rodger, Mark (2018) [2018]. History's Greatest Deceptions and Confidence scams. Rodger & Laz Publishing S.E.N.C. ISBN 978-1775292128.
• Maurer, David W. (1999) [1940]. The Big Con: The Story of the Confidence Man and the Confidence Game. Bobbs Merrill / Anchor Books. ISBN 978-0385495387.
• Maurer, David W. (1974). The American Confidence Man. Springfield: Charles C. Thomas, Publisher. ISBN 978-0398029746.
• Reading, Amy (2012). The Mark Inside: A Perfect Swindle, a Cunning Revenge, and a Small History of the Big Con. Knopf. ISBN 978-0307473592.
• Smith, Jeff (2009). Soapy Smith: The Life and Death of a Scoundrel. Juneau: Klondike Research. ISBN 978-0981974309.
• Sutherland, Edwin Hardin (1937). The Professional Thief (reprint 1989). University of Chicago Press. ISBN 978-0226780511.
• Weil, J.R. "Yellow Kid" (1948) [2004]. Con Man: A Master Swindler's Own Story. Broadway Books. ISBN 978-0767917377.
• Zhang, Yingyu (2017). The Book of Swindles: Selections from a Late Ming Collection. Columbia University Press. ISBN 978-0231178631.

• Scam travel guide from Wikivoyage
• Media related to Scam at Wikimedia Commons
• "Arrest of the Confidence Man". The Lost Museum, (GMU). Police Intelligence. New York Herald. July 8, 1849.
• "Book of Swindles". ChinaFile. 2017-11-15. Confidence tricks in China.
• "Prepaid funeral scam". FBI.gov.
• "To Catch a Con Man". Dateline NBC investigation. Archived from the original on 2007-03-24.