Geoff Peters

[image © copyright Geoff Peters]

By mid 2006 a number of providers such as Sky and TalkTalk were promising domestic customers high speed internet access, packaged along with something else, such as tethered phones for national and international telephone calls (TalkTalk), or digital television (Sky). The broadband element of the package is said to be free, but the ’free’ broadband is conditional on you buying the other services too.

In essence these companies are offering a package which cable companies like ntl:Telewest have been able to offer cable TV subscribers for many years. Their package features the so-called triple play of broadband, TV and telephone.

What’s the catch?

These offers are undoubtedly better value for people who do not have access to cable and have been paying separately for a telephone line, landline telephone calls, and broadband internet access. They will also look attractive to those considering broadband internet who’ve previously been paying for much slower dial up internet access.

However, there is a lot of small print to consider. First, none of these packages are available to everyone. Only about five million homes have cable TV at present and the technology of the other packages relies on you living close to a telephone exchange to which your supplier has access.

You can learn more about broadband in what is broadband? But there are two further complications you need to consider:

• your broadband provider will be sharing your data stream with up to 50 other users
• the connection is asynchronous: inbound and outgoing data rates provided by the service are different – with much higher speeds available for receiving than for sending data

If you often post your holiday snaps on Flickr, or you provide a web server for your local community group and especially if you run an online business from home, the uploading speeds may seem slow. And should you and the others that share your data stream all start uploading files at the same time, you’ll probably feel nostalgic for the speeds that you used to get out of your old-fashioned modem.

What’s next?

There are ways of reaching households that aren’t near a telephone exchange and of avoiding the limitations of the copper wires of the telephone system. For example, wireless technology which avoids the expense of digging up the road to provide the optical fibre that is used for the network backbone.

The technologies of video and interactivity (broadcast and broadband) are converging quickly. Indeed it is worth remembering that the 16m+ households with digital TV through cable, satellite and Freeview are already receiving very high bandwidth content.

Meanwhile, BT, which now receives only a small proportion of its revenue from telephone calls, is set to become a provider of TV content. It launches internet protocol based IPTV in 2006 and along with Korean company Samsung plans trials later this year of high quality video broadcasts to mobile TV-phones.

For many the future can be seen in Korea where 80% of households have very high speed connections, primarily by optical fibre. In Korea a combination of competition and government loans have lead to new and thriving technical and entertainment industries.

Those who advocate the undoubtedly greater expense of providing new infrastructure (in Korea’s case optical fibre) point to new forms of entertainment and hence revenue streams. These, alongside the industrial strength that results from being close to the leading edge, have served Korea well.

Further reading

• What is broadband? 1Mb or 8Mb? Unlimited or capped? How fast is ‘superfast’? We clear up some of the issues
• Broaderband? The future of high-speed access
• Broadband: How South Korea leads the way
• Networked Living: exploring information and communication technologies
• Information and communication technologies: people and interactions
• Keeping Ahead in Information and Communication Technologies

Blogging about

Money Programme

Get the facts behind the big business and finance stories from around the world – and down your street, in The Money Programme.

The Great Phone Call Con looks at the problems of phone-line fraud and unsolicited telephone marketing. This made me wonder, why has there been an explosion of this sort of fraud, and why do they seem to find it so easy to fool us? The answers to both questions may lie in the nature of human psychology.

Why the massive surge in telephone fraud?

Fraud requires a supply of victims, weak safeguards and motivated crooks. Changes in technology have increased access to potential victims. It’s relatively cheap and easy to set up machines to communicate with people. It’s also possible to obscure the trail back to the fraudster. The widespread use of electronic money exchange (online banking, credit card use, etc) also makes it easier – by making it easy for us to part with our cash. Safeguards are poor; law enforcement has struggled to keep up with these new forms of fraud.

However, I don’t think the availability of new means of fraud, alone, is sufficient to explain why there is so much fraud going on. An important aspect of the recent surge in telephone and internet crime seems to be the seemingly endless supply of fraudsters.

Successful fraud requires both a set of skills and a willingness to deliberately target and deceive others. The most successful fraudsters have a capacity to look us in the eye, to engage our trust and then betray it without a qualm. This capacity is actually quite rare and often associated with personality disorder (or perhaps politicians?!).

Typically, those committing fraud use psychological strategies to distance themselves from any sense of guilt. Criminologists refer to this as ‘neutralisation’. A common form of neutralisation is to view the victim as in some way to blame – “He had it coming; I couldn’t have taken him in if he wasn’t so greedy”. Another is to depersonalise or belittle the victim – for example the recently prosecuted perpetrators of a series of frauds on Ebay, referred to their 3,000 victims as ‘the idiots’. However, for most people, such attitudes are difficult to maintain in the face of personal contact with an intended victim.

By contrast, telephone or internet fraud guarantees a psychological distance between fraudster and victim. The technology already provides a significant amount of depersonalisation: a ready-made neutralisation strategy. Thus, people who would find the emotional costs of face-to-face fraud too high are much more able and willing to engage in remote fraud.

Why are we so easy to fool?

When we fall victim to fraud, or the more legal but related forms of advertising and marketing manipulation, we often assist in our own deception. Effective fraudsters don’t try to fill out all the gaps in a story. Like professional magicians, they know that manipulating us to reach a conclusion for ourselves is more powerful than making a direct statement. We’ll fill in the gaps in story for ourselves given the right motivation; and they know that greed and fear are both powerful motivators that they can easily manipulate.

If we believe someone can enrich us, or we think they can prevent something we dread, we want to believe them and will often explain away any holes in their story for ourselves.

Once we have become victims of deception, another factor comes into play. Fraud is often under-reported. For most of us, self-esteem is important; and we, often quite unconsciously, look for ways to protect it. For this reason, we tend to pay more attention to information that builds our own self-esteem than information that threatens it. So, many of us are quite reluctant to accept that we are victims and are even more reluctant to tell others.

Intelligence and education are not a protection here. Indeed, there is some evidence that highly educated people are easier to fool, because they don’t expect to be fooled.

There are important parallels between the traits that make many of us easily deceived by fraud and those that make traders in financial markets easily deceived by market movements. In my own research on the behaviour of traders in investment banks, I found these well educated, intelligent and highly trained professionals to be often prone to illusions about the extent to which they were in control and able to make unbiased financial judgements.

Fear, greed and the need to maintain self-esteem may make many of us more easily trapped by a telephone scam, but they also account for some major mishaps in financial markets.

Protecting yourself from fraud

So if the world is full of fraud and human psychology disposes us to be dupes, how can we protect ourselves? There is no foolproof solution, but some simple rules may help: 

• If it seems too good to be true, it probably is.
• If a person, or organisation, starts to play on your fears it may be that person or organisation that you should fear.
• If you are fooled, it does not mean you are an idiot. You are in good company. Do take the time to report the scam.

Further reading

• The psychology of decision making – the same thinking processes that help you cope with everyday life prejudice your judgements in other areas
• The Psychology of Fraud by Grace Duffield and Peter Grabosky, pubilshed by the Australian Institute of Criminology
• Introduction: Traders, markets and social science by M P Fenton-O'Creevy, N Nicholson, E Soane and P William, published by Oxford University Press
• Trio jailed for £300,000 fraud on eBay 'idiots' by Audrey Gillan and Bobbie Johnson in The Guardian (29 October 05)
• 'The Psychology of Deception' by R Hyman in Annual Review of Psychology
• The American Confidence Man by R Hyman and Charles C Thomas

About the author

Mark Fenton-O'Creevy is Professor of Organisational Behaviour at the OU Business School. His research includes investigations into the performance of traders in financial markets, and the problems that occur when management practices are transferred from one country to another.

He is also a National Teaching Fellow, and Principal of the Centre for Practice-Based Professional Learning.

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