Who Else Wants a Free Lunch?
According to the Colorado Division of Securities, "Andrew Paul Weis, DOB: 10-27-50, of Lakewood, was sentenced to 20 years in prison, plus five years mandatory parole, for securities fraud. He defrauded at least 25 people, most being older adults, out of almost $600,000."
The entire press release can be read here.
Mr. Weiss used the lure of a free investment seminar, complete with lunch, to defraud individuals. He solicited at retirement homes, mainly in Arizona and New Mexico. There was not a restitution order, apparently. Mr. Weis had offered to pay the individuals $2,000 a month, if he could be freed on probation. The request was denied, which is a good thing as Mr. Weis would have likely used his considerable talents at persuasion to con other individuals out of a least $2,000 a month.
What is it about a free lunch that would convince individuals to "turn over their life savings" to Weis? Cialdini describes the influence tool here as "the rule for reciprocation." "The rules says that we should try to repay, in kind, what another person has provided us. If a woman does us a favour, we should do her one in return; if a man sends us a birthday present, we should remember his birthday with a gift of our own."
Although the reciprocation rule does not appear to require us to turn over our hard earned money to a criminal just because he has bought us lunch, some scientific experiments have shown that the rule can be used to obtain significant economic benefits. The old Amway trick of delivering a "free sample" of merchandise for a 24 trial period ensnared many a consumer who would not have purchased from Amway otherwise.
Why can the rule extract seemingly excessive favours? Cialdini identifies two reasons: a) most of us find it highly disagreeable to be in a state of obligation, and so we will quickly try to remove ourselves from its grasp, and b) to violate the rule is to be a moocher or a welsher. In order to avoid being labeled as such, we might agree to an unequal exchange of favours.
I don't know how Mr. Weis obtained money from the individuals, apparently $30,000 or more from each person. But I would hazard a guess that during his seminar he tried to sell each person an outrageously expensive investment proposition, say of a million dollars, then offered to take "only" $25,000 to invest. This trick works because individual who turned down the "million dollar opportunity to invest feels flattered, and then happy to invest the $25,000 -which vindicates the investor's self portrait of himself as a very savvy investor? After all, not many people get asked to invest a million dollars. What a clever person I must be.
