He remembers the smooth voice of a salesman on the telephone. He remembers dreaming of a fortune in oil and silver futures. But to this day, the 81-year-old retired utility worker does not understand how swindlers convinced him to part with $18,000.
'I just wanted to better my life in my waning days,' said Gulban, a resident of Holder, Fla. 'But when I found out the truth, I couldn't eat or sleep. I lost 30 pounds. I still can't believe I would do anything like that.”
Gulban was the victim of a what law enforcement officials call a 'boiler-room operation,” a ruse that often involves dozens of fast-talking telephone salesmen crammed into a small room where they call thousands of customers each day. The companies snare hundreds of millions of dollars each year from unsuspecting customers, according to a U.S. Senate subcommittee on investigations, which issued a report on the subject last year.
'They use an impressive Wall Street address, lies and deception to get individuals to sink their money into various glamorous-sounding schemes,” said Robert Abrams, the New York State attorney general, who has pursued more than a dozen boiler-room cases in the past four years. 'The victims are sometimes persuaded to invest the savings of a lifetime.”
Orestes J. Mihaly, the New York assistant attorney general in charge of the bureau of investor protection and securities, said the companies often operate in three stages. First, Mihaly said, comes the 'opening call,” in which a salesman identifies himself as representing a company with an impressive-sounding name and address. He will simply ask the potential customer to receive the company's literature.
A second call involves a sales pitch, Mihaly said. The salesman first describes the great profits to be made and then tells the customer that it is no longer possible to invest. The third call gives the customer a chance to get in on the deal, he said, and is offered with a great deal of urgency.
'The idea is to dangle a carrot in front of the buyer's face and then take it away,” Mihaly said. 'The aim is to get someone to want to buy quickly, without thinking too much about it.” Sometimes, Mihaly said, the salesman will be out of breath on the third call and will tell the customer that he 'just came off the trading floor.” Such tactics convinced Gulban to part with his life savings. In 1979, a stranger called him repeatedly and convinced Gulban to wire $1,756 to New York to purchase silver, Gulban said. After another series of telephone calls the salesman cajoled Gulban into wiring more than $6,000 for crude oil. He eventually wired an additional $9,740, but his profits never arrived.
'My heart sank,” Gulban recalled. 'I was not greedy. I just hoped I would see better days.” Gulban never recouped his losses.
FIGURE 7-2 The Scarcity Scam
A variant of the deadline tactic is much favored by some face-to-face, high-pressure sellers because it carries the purest form of decision deadline: right now. Customers are often told that unless they make an immediate decision to buy, they will have to purchase the item at a higher price or they will be unable to purchase it at all. A prospective health-club member or automobile buyer might learn that the deal offered by the salesperson is good only for that one time; should the customer leave the premises, the deal is off. One large child-portrait photography company urges parents to buy as many poses and copies as they can afford because 'stocking limitations force us to burn the unsold pictures of your children within twenty-four hours.' A door-to-door magazine solicitor might say that salespeople are in the customer's area for just a day; after that, they—and the customer's chance to buy their magazine package—will be long gone. A home vacuum-cleaner operation I infiltrated instructed its sales trainees to claim, 'I have so many other people to see that I have the time to visit a family only once. It's company policy that even if you decide later that you want this machine, I can't come back and sell it to you.' This, of course, is nonsense; the company and its representatives are in the business of making sales, and any customer who called for another visit would be accommodated gladly. As the company sales manager impressed on his trainees, the true purpose of the can't-come-back claim has nothing to do with reducing overburdened sales schedules. It is to 'keep the prospects from taking the time to think the deal over by scaring them into believing they can't have it later, which makes them want it now.'
PSYCHOLOGICAL REACTANCE
The evidence, then, is clear. Compliance practitioners' reliance on scarcity as a weapon of influence is frequent, wide-ranging, systematic, and diverse. Whenever such is the case with a weapon of influence, we can feel assured that the principle involved has notable power in directing human action. In the instance of the scarcity principle, that power comes from two major sources. The first is familiar. Like the other weapons of influence, the scarcity principle trades on our weakness for shortcuts. The weakness is, as before, an
FIGURE 7-3 Don't Wait!
In addition, there is a unique, secondary source of power within the scarcity principle: As opportunities become less available, we lose freedoms; and we
As simple as the kernel of the theory seems, its shoots and roots curl extensively through much of the social environment. From the garden of young love to the jungle of armed revolution to the fruits of the marketplace, impressive amounts of our behavior can be explained by examining for the tendrils of psychological reactance. Before beginning such an examination, though, it would be helpful to know when people first show the desire to fight against restrictions of their freedoms.
Child psychologists have traced the tendency back to the start of the third year of life—a year independently identified as a problem by parents and widely known to them as 'the terrible twos.' Most parents can attest to the development of a decidedly more contrary style in their children around this period. Two-year-olds seem masters of the art of resistance to outside, especially parental, pressure: Tell them one thing, they do the opposite; give them one toy, they want another; pick them up against their will, they wriggle and squirm to be put down; put them down against their will, they claw and struggle to be carried.
One Virginia-based study nicely captured the terrible twos style among boys who averaged twenty-four months in age. The boys accompanied their mothers into a room containing two equally attractive toys. The toys were always arranged so that one stood next to a transparent Plexiglas barrier and the other stood behind the barrier. For some of the boys, the Plexiglas sheet was only a foot tall—forming no real barrier to the toy behind, since the boys could easily reach over the top. For the other boys, however, the Plexiglas was two feet tall, effectively blocking the boys' access to one toy unless they went around the barrier. The researchers wanted to see how quickly the toddlers would make contact with the toys under these conditions. Their findings were clear. When the barrier was too small to restrict access to the toy behind it, the boys showed no special preference for either of the toys; on the average, the toy next to the barrier was touched just as quickly as the one behind. But when the
