Scams You Might Easily Fall For & Mastering The Art of Deal-Making

Speaker 1 Today, on something you should know, if you want to get to know someone better, there's a simple technique that works really well.

Speaker 1 Then, protecting yourself from the constant threat of scams and identity theft.

Speaker 2 Identity theft is high-tech, low-tech, and no-tech. It isn't just coming through your computer.
It is going through your trash.

Speaker 2 This is anything they can do to get the information they will do.

Speaker 1 Also, a simple way that will help you remember names a lot better and to look at some common negotiating techniques that don't work, like starting with a low-ball offer.

Speaker 3 The problem with doing that is that you make yourself untrustworthy. If I'm selling something that's worth $1,000 and you offer me $200 for it, are you trying to take advantage of me?

Speaker 3 Do you not know what this item is worth? What kind of person are you?

Speaker 1 All this today on something you should know.

Speaker 1 It's time for Black Friday, Dell Technologies biggest sale of the year.

Speaker 3 That's right.

Speaker 1 You'll find huge savings on select Dell PCs like the Dell 16 Plus with Intel Core Ultra processors. And with built-in advanced AI features, it's the PC that helps you do more faster.

Speaker 1 From smarter multitasking to extended battery life, these PCs get the busy work done so you can focus on what matters most to you.

Speaker 1 Plus, earn Dell rewards and enjoy many other benefits like free shipping, expert support, price match guarantee, and flexible financing options.

Speaker 1 They also have the biggest deals on accessories that pair perfectly with your Dell PC, improving the way you work, play, and connect.

Speaker 1 Whether you just started holiday shopping or you're just finishing up, These PCs and accessories make perfect gifts for everyone on your list. Shop now at dell.com slash deals and don't miss out.

Speaker 1 That's dell.com slash deals.

Speaker 3 Something you should know, fascinating intel, the world's top experts, and practical advice you can use in your life. Today, Something You Should Know with Mike Carruthers.

Speaker 1 Hey there. Welcome to Something You Should Know.

Speaker 1 Have you ever been taken by a scam artist? I have.

Speaker 1 And fortunately, it hasn't happened very often, and it wasn't very much money, but I don't think I know too many people who haven't fallen victim to some scam sometime, somewhere, which is why I think you're going to find the conversation with Steve Wiseman coming up in just a moment really interesting.

Speaker 1 First up today,

Speaker 1 You probably think that one of the best ways to get closer to someone you would like to be closer to is to do something nice for them. Do them a favor, make some nice gesture.

Speaker 1 Well, it turns out that you're better off asking them to do you a favor.

Speaker 1 A study in the Journal of Human Relations revealed that when someone gives you their time or advice or does a small favor for you, a connection is made.

Speaker 1 And it's a more powerful connection than if you were to do them a favor instead. I'm sure you know from your own experience that it feels good to do someone a favor.

Speaker 1 So, when you ask them to do a favor for you, you're making them feel good.

Speaker 1 And then it also opens the door for a return of the favor in the form of lunch or a cup of coffee.

Speaker 1 And presto, you've got the opportunity to get to know each other a little better and to get a little closer. And that is something you should know.

Speaker 1 I think it would be hard to find someone someone who has never been scammed or never had their identity stolen or their credit card compromised in some way or been taken for a ride by some scammer out there.

Speaker 1 Scams are everywhere. A lot of them are online, but they're not all online.
And most all of them are designed to separate you from your money.

Speaker 1 And I know a lot of people believe they're too smart, too sophisticated to fall for a scam.

Speaker 1 But as you're about to hear, some very smart, sophisticated people have been victims right along with the rest of us.

Speaker 1 One of the leading authorities on scams and identity theft is attorney Steve Wiseman. He also wrote a book a few years ago called 50 Ways to Protect Your Identity in a Digital Age.

Speaker 1 Hey, Steve, welcome to Something You Should Know.

Speaker 2 It's great to be with you.

Speaker 1 I'm kind of curious how you got interested in scams and identity theft and these kind of crimes in the first place.

Speaker 2 I'm a lawyer and also a college professor at Bentley University, where I teach white collar crime.

Speaker 2 Actually, before I taught at Bentley University, I taught at a number of other colleges with ever setting foot on the campuses.

Speaker 2 I used to teach in their prison education programs in the Massachusetts state prisons. And it was there I met a number of scam artists and con men and criminals, always found it fascinating.

Speaker 2 And then unfortunately, had a personal experience about 20 years ago where I was a victim of identity theft.

Speaker 2 And this was, I think, really around the time that identity theft was taking off as a crime. It is now the biggest consumer crime.
So I just find it very, very interesting and timely.

Speaker 1 I have a sense, and I'd like you to comment on this if you agree or disagree, that there's this kind of general perception amongst a lot of people that scams are for idiots, that I'm too smart to be scammed.

Speaker 1 And, you know, if you're dumb enough to read and give money to the Nigerian prince because he sent you an email, well, you know, that's your problem, but I'm way too smart.

Speaker 2 Well, you know, there's two things about that. First of all,

Speaker 2 no one is too smart to be scammed. All you have to do is look at Bernie Madoff and the many intelligent people that wound up being victims of his scam.

Speaker 2 And he actually was kind of of that mind that if you're too smart, you wouldn't be scammed. He actually blamed his victims at one point.

Speaker 2 He said, if anyone looked into what I said I was doing, they would know it's impossible. But when you mentioned about the Nigerian email scam,

Speaker 2 brought a smile to my face because lately, the Nigerian email scam is still with us and they are absolutely even more ridiculous than ever.

Speaker 2 And at first, I was thinking, you know, why would they do that? And the thing is, they want to get the most vulnerable, the most greedy, and people who will fall for it.

Speaker 2 They don't want to spend time with someone who will be asking a lot of questions. But the short answer to your question is:

Speaker 2 anyone can get scammed. And the person that thinks they're too smart for it, they're going to be the next victim.

Speaker 1 Okay, so because this is such a big problem and can come at you from lots lots of different directions, where do we start?

Speaker 1 What should I be on the lookout for?

Speaker 2 One of the things is the Internet of Things. Anything that you have that is connected to the Internet, and that is a vulnerability for you.

Speaker 2 So, you know, if you have a smart TV in your home, if you haven't protected that and changed the default password,

Speaker 2 an identity thief can get into, hack into your Internet of Thing device, and there were more than 1.5 billion attacks last year on these.

Speaker 2 Get to your computer. From your computer, they get to your online bank account.

Speaker 2 You know, there are other times where, again, the identity theft, they trick you into providing information. I was speaking with some victims and a TV crew about a victim of a scam.
They went online,

Speaker 2 they found what looked like a legitimate site.

Speaker 2 It appeared to have all of the good credentials, but they didn't check it out. And the bottom line is they sent their money to a scammer.
So we really have to do our homework in these scams.

Speaker 2 The SEC, which is interesting, actually did a phony website called for a non-existent cryptocurrency called HoweyCoin.

Speaker 2 And it looked good, had all of the endorsements of celebrities and everything to make it appear good.

Speaker 2 And if people clicked through and it got to the part where they were going to send their money, there's a big announcement on your screen telling you that you would have been scammed, that this is a scam.

Speaker 2 So different scams lure you in. They all take advantage of fear and greed.

Speaker 1 I want to go back to what you said a few minutes ago about scammers getting into my computer through my smart TV. Can you go into a little more detail about that? Because

Speaker 1 I hadn't heard of that that before, so I'd like to know how that works.

Speaker 2 They're going to attack your router. Remember, your router is the gateway to all of the tech equipment you have in your house.

Speaker 1 So they'd have to be parked outside then. I mean, they'd have to be close to the house.
Oh, no.

Speaker 2 No, they don't even, they don't.

Speaker 2 This can be done at a distance. As a matter of fact, the FBI issued a warning about hacking into routers by Russian cyber criminal gangs.

Speaker 2 And the problem there is a lot of people don't change the default password on their router. And those router passwords are available online.
Criminals halfway around the world can hack into it.

Speaker 1 See, I would bet that most people, or at least a lot of people, don't even know that their router has a password or that their smart TV has a password, let alone would they know how to change it.

Speaker 2 I mean, there are other issues there with our smart TVs. And interestingly enough, the prices of our smart TVs

Speaker 2 are less than what we would actually pay for it if those televisions were not subsidized by companies that are taking information that we agree, we don't realize we agree, to be gathered about us, that is gathered by our smart TV that is watching not only what we're watching on TV, but the TV can be can pick up and be connected through your router to all of the other devices in your home.

Speaker 2 And so the privacy that you give up, unless you know enough, and most of us don't, and they make it difficult too. I mean, even children's toys, they come with

Speaker 2 a default password. And if people don't change those passwords, that's the Trojan horse that can lead the hackers to your computer, to your bank account.

Speaker 1 So a lot of these scams are under the radar. It isn't a matter of appealing to your stupidity or your greed or whatever.

Speaker 1 You wouldn't even know what happened.

Speaker 2 Absolutely. I mean, it's all of the above.

Speaker 2 The Jamaican lottery is still a major one that appeals to our greed. And there are gangs in Jamaica that have gathered telephone numbers of generally older Americans, and they call them.

Speaker 2 They tell them that they've won a lottery that they never even entered. And, you know, it's tough to win a lottery.

Speaker 1 It's really tough.

Speaker 1 Yeah.

Speaker 2 And so they

Speaker 2 have to pay fees or taxes. And that thing is huge.
Now, that, you know, that depends on greed, but there are plenty of times, particularly with cybersecurity,

Speaker 2 that we're not necessarily taking the steps and we don't realize where we are vulnerable. And of course, even if you, you know, I'm one of these guys, even paranoids have enemies.

Speaker 2 So, you know, being in the business, I'm particularly paranoid. And I was particularly angry in 2017 with the major data breach at Equifax, where 147 million of us, and

Speaker 2 I include me in there, had our personal information stolen.

Speaker 2 So despite the fact that I'm taking care to protect my personal information, the companies didn't.

Speaker 2 And with Equifax, what made it worse is Steve Jobs once said, if you're not paying for a product, you are the product.

Speaker 2 And with Equifax and the other credit reporting agencies, they they make their money from selling our personal information.

Speaker 2 And so the idea of protecting our information wasn't as high on their priority list as it should have been.

Speaker 1 We're talking about scams and identity theft and how to protect yourself. And I'm talking with attorney Steve Wiseman, whose website is scamaside.com.

Speaker 1 I've learned from experience that hiring isn't easy, even when you know exactly who you're looking for. Running a business doesn't automatically make you good at hiring people.

Speaker 1 It's a skill and it takes time, sometimes too much time. That's why I like Indeed.
It makes the whole process faster and easier and the results are better.

Speaker 1 When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed Sponsored Jobs helps you stand out.

Speaker 1 Your listing jumps right to the top of the the page for the people you actually want to reach. And that saves you days, maybe weeks of waiting.
And the numbers back it up.

Speaker 1 According to Indeed data, sponsored jobs posted directly on Indeed get 45% more applications than non-sponsored jobs. What I like most is there are no monthly subscriptions, no long-term contracts.

Speaker 1 You only pay for results. And while I've been talking, 23 hires were made on Indeed worldwide.
It's that fast.

Speaker 1 There's no need to wait any longer. Speed up your hiring right now with Indeed.

Speaker 1 And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com/slash something.

Speaker 1 Just go to indeed.com/slash something right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/slash something.

Speaker 1 Terms and conditions apply. Hiring, indeed, is all you need.

Speaker 1 With the weather getting colder and the holidays upon us, I just want my wardrobe to be easy. Things that look sharp, feel great, and last season after season, which is exactly what I get from Quince.

Speaker 1 I reach for my Quince cashmere sweaters constantly. They're 100% Mongolian cashmere.
and somehow they're just 50 bucks. Soft, warm, and the kind of everyday luxury that doesn't feel overdone.

Speaker 1 And their denim is another favorite, great fit, easy to wear, and it holds up beautifully. And if you're looking for a holiday gift to give without the big price tag guilt, Quince is perfect for that.

Speaker 1 Those cashmere sweaters I just mentioned, they make great gifts. And their wool coats, you got to check them out.
They're stylish and durable, and their quality is top of the line.

Speaker 1 It's amazing how many people have found Quince and love it. What I love is how Quince works directly with ethical factories and top artisans cutting out the middlemen.

Speaker 1 So you get premium quality at half the cost of other high-end brands. It's luxury without the markup, which means you can give something nice this season or keep it for yourself.

Speaker 1 Give and get timeless holiday staples that last this season with Quince. Go to quince.com/slash SYSK for free shipping on your order and 365-day returns.
Now available in Canada, too.

Speaker 1 That's q-u-in-ce.com slash S-Y-S-K. Free shipping and 365-day returns.
Quince.com/slash S-Y-S-K.

Speaker 1 So, Steve, I want to talk about medical identity theft because I'm not sure people even understand that that's a thing. And you say it could actually be fatal.
So explain how that works.

Speaker 2 Interpol once indicated there were only about 100 cyber cyber criminal geniuses, but their business model now is they will create the malware, the botnets to distribute it, provide tech support, and they will sell and lease what they've created on the dark web to less sophisticated criminals.

Speaker 2 So they will be able to get all of our information. So your credit card, if it comes with other personal information about you, will go for about $45 online on the dark web.

Speaker 2 But your medical insurance will go for much more. And that's because they are able to turn that into

Speaker 2 medical, they can get medical equipment, they can get sell the use of the insurance. And here's the thing that makes no sense whatsoever.
You become a victim of medical identity theft.

Speaker 2 Somebody has accessed your medical insurance. You find out, you report that, and you attempt to get this false information removed from your medical records.

Speaker 2 Well, that would violate the privacy of the medical identity thief. And so all you can do is have a notation on there that this information is disputed.

Speaker 2 But quite frankly, you could have information on your medical report that could contain

Speaker 2 a false

Speaker 2 blood type or a medicine to which you are allergic to.

Speaker 2 And

Speaker 2 these things could be potentially fatal. So medical identity theft is a huge, huge problem.

Speaker 2 And unfortunately, the healthcare industry has been very, very lax in protecting data, including medical insurance records.

Speaker 1 Wait, what?

Speaker 1 That's preposterous that

Speaker 1 an identity thief could put information in your medical records and they protect his privacy.

Speaker 2 Yep, the HIPAA privacy law is protective. It makes, I mean, when I first found that out, I kept looking for, I must have had bad information.

Speaker 1 But nope, that's it.

Speaker 2 That's our government at work.

Speaker 1 And even you, I mean, somebody who's

Speaker 1 pretty sharp about this, you said you've been the victim of identity theft. I've been scammed.
And I mean, I don't know too many people who have not had some rub up against.

Speaker 1 this, whether they thwarted it or not,

Speaker 1 that have been scammed.

Speaker 2 Years ago, there was a cartoon called Pogo, and Pogo had

Speaker 2 a saying, we have met the enemy, and he is us. All too often, when it comes to being scammed and when it comes to becoming victims of identity theft, we may be our own worst enemies.

Speaker 2 For instance, we put too much personal information up on social media.

Speaker 2 the grandparent scam, which is still going on, and that's where the grandparent gets a call in the middle of the night. The grandchild is having problems wherever they are.

Speaker 2 They've been arrested or there's been a medical emergency. They gather, the scammers gather that information through social media.
I used to like the Big Bang Theory, the show.

Speaker 2 And Sheldon used to call his grandmother Mima.

Speaker 2 And so they could, the bad guys could know from checking out your social media, you call your grandmother Mima. And so they get a call, Mima, it's me.
I'm in trouble. I need some money.

Speaker 2 Get it to me fast.

Speaker 1 Yeah. Well, it's understandable.
Somebody in that situation might panic and send money. And in fact, I think, wasn't there just some woman, I think she used to be a police dispatcher who got scammed

Speaker 1 or that they attempted to scam her and they showed up at her door to get the money and the police were there and tackled them in the front yard.

Speaker 3 Yes, I saw the videos of that.

Speaker 2 It was terrific. But, you know, and along with individuals, you know, they, why did the Willie Sutton, a famous bank robber, was once asked, why did he rob banks?

Speaker 2 And he said, because that's where the money is. So major, major scams are perpetrated against companies and government agencies.
And we've seen that with ransomware and other.

Speaker 2 But one of the biggest, as far as companies goes, is called the business email compromise. And what happens is the bad guys get into the computers of a company.

Speaker 2 They find out when a particular CEO or CFO is going to be away or on vacation or something. And then they send an email that appears to come from them

Speaker 2 asking to wire money to a particular company that they're doing business with. Of course, there is no company that they're doing business with.
It's going to the scammers.

Speaker 2 But they now have this deep fake technology, which can be used for videos as well as audio. And there was a German company in which they had a subsidiary in Britain.
And

Speaker 2 the criminals were able to get the voice of the CEO of the company from some YouTube videos. And they were able to take that to do a phone call that sounded exactly like the CEO.

Speaker 2 There's an easy technique called spoofing where you can fool your caller ID so you can make it look like it's coming from wherever. And the scammers picked up a quick $200,000.

Speaker 1 What about, you know, there are these services people can buy that are supposed to protect your identity. Are they worth it? Do they do a job?

Speaker 1 Is it at least a minimal level of protection or is it really good or what?

Speaker 2 When I describe these identity theft protection services,

Speaker 2 I say this kind of like you're crossing the street and you get hit by a bus and someone rushes out to tell you, hey, you just got hit by a bus. That's what these services do.

Speaker 2 They don't protect you from becoming a victim of identity theft. They alert you sooner that you have become a victim.
So it's helpful. You can do these things for yourself.

Speaker 2 I think some of them are priced so that they may be worth it. But frankly, the best place to find a helping hand is at the end of your own arm.

Speaker 2 And the one thing that absolutely none of these identity theft protection services do, which is the absolute best thing for protecting yourself, is putting a credit freeze on your credit reports.

Speaker 2 And now, since 2018, you can do it for your children. And children, according to a Carnegie Mellon study, are 51 times more likely to become targeted for identity theft than adults.

Speaker 2 This can protect you so that even if someone gets your personal information, they're not going to be able to open accounts in your name, which is a big way that people get whacked. So a credit freeze.

Speaker 3 easy to do.

Speaker 2 If you're going to apply for credit, you can go online and lift it so that the creditor, at least a car recently, and they had to check it out, can check my credit report and then put it back on automatically.

Speaker 2 So best single thing you can do is freeze your credit and freeze your children's credit.

Speaker 1 Isn't it true that a lot of identity theft still happens by people going through your trash?

Speaker 2 Absolutely. And, you know, this is

Speaker 2 one of my mottos is

Speaker 2 things aren't as bad as you think. They're far worse.
So what if you have a shredder and you shred the documents before you put them out?

Speaker 2 And in Arizona in particular, there were identity thieves who hired methamphetamine addicts who would stay up all night piecing together single shredded, you know, just vertical shredded documents.

Speaker 2 And so if you're going to shred, which is a great idea, make sure you get a cross shredder.

Speaker 1 And

Speaker 1 I don't put my trash out until the morning, you know, until I hear the trucks coming, because just for fear that somebody could go through that at 2 o'clock in the morning and take their time and

Speaker 1 maybe find something I didn't shred or.

Speaker 2 Yeah, quite frankly, I don't think that's an unreasonable fear. Identity theft is high-tech, low-tech, and no-tech.
It isn't just coming through your computer. It is going through your trash.

Speaker 2 This is anything they can do to get the information, they will do.

Speaker 1 You had mentioned IRS. How do those scams work?

Speaker 2 You know,

Speaker 2 they're twofold. One of them is imposter scams.
And this is, according to the Federal Trade Commission, the biggest level of scams that we've had in the last year.

Speaker 2 And this is where you get a telephone call, a text message, or an email that is coming from some,

Speaker 2 maybe it's the FBI, maybe it's Social Security, and lately it's from the IRS.

Speaker 2 That spoofing where the scammer very easily can trick your caller ID to make it look like it's coming from the irs they tell you that here's the thing that bothers me the fact that the irs has had to put on its website we don't ask for or take gift cards but criminals posing as the irs will do it so under a wide variety of pretexts they'll ask you for gift cards credit cards some kind of payment that you do over the phone the other thing is income tax identity theft which is a multi-billion dollar problem.

Speaker 2 Someone gets your social security number,

Speaker 2 files electronically a tax return using your number and a counterfeit W-2. They get a big refund.
If you file after them,

Speaker 2 your return will be held up. And right now, the IRS is taking about close to 300 days to process claims for your legitimate refund.
So

Speaker 2 income tax identity theft, people say, well, you know, they're not getting me, they're the government's money, but you're not getting your refund for pretty much close to a year.

Speaker 1 Does the IRS take payments over the phone? I thought they did not.

Speaker 2 They did not. And as a matter of fact, I'm glad you've mentioned that.
You know, people say, how do I know if it's the IRS calling me?

Speaker 2 How do I know if it's the IRS sending me an email or a text message? And the real easy way to know it is the IRS never initiates contact in any of those three manners.

Speaker 2 The only way they initiate contact is through snail mail. So if you get a phone call, an email, or a text message indicating it's from the

Speaker 2 IRS, you know it's a scam.

Speaker 1 Well, there is obviously a lot to know if you want to protect yourself. And if you do want to know more, you can check out Steve's website, scamaside.com.

Speaker 1 There's a lot on that website you'll find helpful. The name of the book he wrote is 50 Ways to Protect Your Identity in a Digital Age by attorney Steve Wiseman.

Speaker 1 And there are links in the show notes to both of those resources I just mentioned. Thanks for coming on and sharing all this, Steve.
Appreciate it.

Speaker 2 Terrific. Great talking with you.

Speaker 1 I want to tell you about a great new podcast I think you'll like. I'm loving it.
So what happens when our passions become obsessions?

Speaker 1 Well, on David Green is obsessed, one of America's most familiar voices and longtime co-host of NPR's Morning Edition, seeks out obsessives of all kinds while unpacking his own fixations.

Speaker 1 You'll hear David talk to comedian Tig Nataro about her complex passion for plant-based food. Actor David Arquette on his love of Bozo the Clown.
Paula Poundstone on her house full of cats.

Speaker 1 Celebrity chef and author Michael Simon discusses why he just can't quit the Cleveland Browns, even though they often make him miserable, and so much more.

Speaker 1 It's pop psychology disguised as conversations with the world's most fascinating people.

Speaker 1 You can listen to David Green is obsessed wherever you get podcasts.

Speaker 1 You know, my mornings used to be a scramble, coffee, breakfast, trying to remember what supplements to take. It was a lot to juggle.

Speaker 1 And now I start every day with a single scoop of AG1, and it's made my mornings so much easier and better.

Speaker 1 In one mix, here's what I get. I get nutrients from real whole foods plus prebiotics, probiotics, and enzymes that support my digestion and gut health.

Speaker 1 After just a few weeks, I mean, I can tell it's working. My energy feels steady all day.
I don't have to think about juggling five different pills or powders.

Speaker 1 And what I love is that AG1 isn't just another supplement. It's a daily microhabit that supports whole body health in one scoop.
It's simple, it's consistent, and it fits easily into my routine.

Speaker 1 One scoop, shake, drink, done. And I know I've done something good for myself before the day even starts.
It's become a small ritual that sets the tone for the entire day.

Speaker 1 AG1 helps me stay one scoop ahead. Head to drinkag1.com/slash something to get a free welcome kit with an AG1 flavor sampler and a bottle of vitamin D3 plus K2 when you first subscribe.

Speaker 1 That's drinkag1.com slash something.

Speaker 1 Negotiation is one of those things, we don't talk about it a lot on this podcast because I think people's impression is that negotiation is a very businessy topic or it means we're going to talk about how to negotiate the price of a car, that kind of thing.

Speaker 1 But the fact is we all negotiate all the time, every day. And there is a very different approach to negotiation that I have found fascinating.
It comes from a guy named Barry Nailbuff.

Speaker 1 Barry is an entrepreneur and professor at Yale School of Management, and he's the author of a new book called Split the Pie, a radical new way to negotiate.

Speaker 1 And I really think you're going to enjoy what he has to say and his approach to this topic. because it is different than what you've heard about negotiation before.
Hey, Barry, welcome.

Speaker 1 Thanks for being here.

Speaker 3 Thanks for inviting me.

Speaker 1 So start off by explaining how your approach to negotiating is different

Speaker 1 and what it is people sometimes miss about what you think a negotiation is.

Speaker 3 Sure.

Speaker 3 Most people, it's strange to say, don't appreciate what it is they're really negotiating over.

Speaker 3 They think it's over some

Speaker 3 total amount as opposed to what would be lost if the two parties don't reach a deal.

Speaker 3 That is, they don't understand the actual negotiation pie, and therefore the arguments they make are really not over the right numbers, which leads people to be confused about power and fairness, and negotiations end up going south.

Speaker 1 So explain the pie, because I think of a negotiation as I want this, you want that. I don't see it as a pie to split, so explain that.

Speaker 3 The pie is

Speaker 3 how value is created by an agreement compared to what the parties would get if they end up working on their own or doing something with other folks.

Speaker 1 So let's get specific with a real example that would explain what you just said.

Speaker 3 I made a rookie error. I

Speaker 3 filed for a trademark and didn't realize that trademarks are public the moment you file for them.

Speaker 3 As a result, some troll, and I'll call him Edward because that's his name, ended up buying the URL, the domain name associated with my trademark. And he offered to sell it back to me for $2,500.

Speaker 3 Now, Edward doesn't care about fairness.

Speaker 3 He's a jerk.

Speaker 3 From him, it's a zero-sum mindset. It's like, how much money can he get?

Speaker 3 And I pointed out to Edward that there's an organization called ICAN, which is the domain registry, and for $1,300,

Speaker 3 they have a dispute resolution process. And what Edward had done is called registration in bad faith.
And so I was guaranteed to get that domain name back if I paid ICAN $1,300.

Speaker 3 So, Edward, look, I'm going to get the domain name either because we reach an agreement or because I go to ICANN.

Speaker 3 So, the only question from my perspective is do I pay them $1,300 or do I pay you something? And there's no way I'm paying you $2,500

Speaker 3 when I can get it for $1,300 from ICANN.

Speaker 3 And sure enough, he comes right down to $1,100.

Speaker 3 But from my perspective, now, $1,100 is better than ICAN,

Speaker 3 but I'm only up $200 and he's up $1,100.

Speaker 3 And so I say, there's a $1,300 pie. That's what I can save by doing a deal with you, and I'm prepared to split it $650, $650.

Speaker 3 At which point he comes down to $900, kind of halfway between my $650 and his

Speaker 3 1,100.

Speaker 3 And he's saying, that's the lowest I'll go. I won't move anymore.
And my point is, I've made you a fair offer.

Speaker 3 If you can tell me why we do something different, okay, but you know, what you're proposing is giving you more of the benefit than it is to me, and I don't see why we should do it that way.

Speaker 3 And so I stuck at 650. He was at 900.
And at the end of the day, I had a principal. He was arbitrary.

Speaker 3 And he came and said yes to my 650.

Speaker 3 So he didn't care about fairness, but he recognized that I do.

Speaker 3 And therefore, if you want to do a deal with me, you have to accept the fair outcome.

Speaker 1 See, I would have thought he would have said, okay, well, if you're going to pay them $1,300 to take the domain away from me, give me $1,200 and you can have it right now.

Speaker 1 And you would have said, okay.

Speaker 1 But you didn't say, okay.

Speaker 3 I didn't, because if I did that, he's up $1,200. I'm only $100 better than I can.
Now fight fire with fire would be I go back to Edward and say I'll give you $100 and then I'm up $1,200.

Speaker 3 But in fact I say look for the same reason that I wouldn't expect you to accept $200 offer leaving me $1,100 a head, you shouldn't expect me to accept your proposal of $1,100.

Speaker 3 which leaves you $1,100 ahead and me only $200 ahead. It's true that I need you to save this $1,300, but you also need me.
We need each other, and that's why we should split it $650, $650.

Speaker 1 And you got him.

Speaker 3 And he got me. And we got each other, and we saved the $1,300, and I was $650 ahead, and he's $650 ahead.
So, yes, he's a jerk.

Speaker 3 Yes, he's a troll, but he also understood the logic of what I was saying, and he didn't have any countervailing logic. So, my view is principles beat arbitrary.

Speaker 1 Well, that's a great example, a great story, And I like how you appealed to his sense of fairness with whatever sense of fairness he had

Speaker 1 by pointing out your sense of fairness. But not everybody will agree with that.
I mean, people come into negotiations often wanting to get as much as they can possibly get.

Speaker 1 And

Speaker 1 that's kind of the job of negotiation in many ways, to get as much as you can get.

Speaker 3 And so you're right. The reason for a negotiation is to do better than what they would get without an agreement.
And the question is, how do you measure that? So let me give you a real-world example.

Speaker 3 My mother had the opportunity to buy the house that she was renting from the person who she was renting it from.

Speaker 3 And if she did the transaction with him, there would be no real estate agent involved, and therefore they could save a 5% real estate commission, which in this case was around $40,000.

Speaker 3 So the question is, how much of the $40,000 should my mother get and how much of it should the seller get?

Speaker 3 The seller could say, well, if you buy this kind of house from anybody else, you'd end up having to pay $800,000. So I should get the full $40,000 or you can pay $7.99.

Speaker 3 And my mother could say in response, if you sell this house to anybody else, after the real estate commission, you're only going get $7.60,000.

Speaker 3 So I'll give you $761 and I'll keep almost all of the $40,000.

Speaker 3 My view is that the negotiation here is over saving the $40,000 real estate commission. Each of them are equally powerful, equally necessary.
And so they should split it $20,000, $20,000.

Speaker 1 And so what happened?

Speaker 3 He agreed to that at the end of the day, essentially. He said, well, it's a hot market.
And so therefore, you know, I should be getting more of it.

Speaker 3 And the answer is the hot market is what determines the price from which we subtract the 20,000, not how it is that we divide up the 40,000.

Speaker 1 So every negotiation has to start somewhere, somehow. And often I think people

Speaker 1 throw out a number.

Speaker 1 You know, that's the starting point. That's where we begin our discussion.
Is that a good way to start, do you think?

Speaker 3 I like even more the idea of starting off with the rules for how we'll negotiate. To say to the other side, can we agree that our objective is to create a large pie together and split it equally?

Speaker 3 And understand, is this the person who's going to be a jerk and says, no, my view is I want to engage in a zero-sum negotiation where I get as much as possible, take advantage of you, and in the process shrink the pie?

Speaker 3 Or are they going to say, yes, great. Let's figure out how we can make a big pie together that we can split and equally benefit from.

Speaker 1 Something that often seems to derail negotiations is emotion, personality,

Speaker 1 ego,

Speaker 1 wanting to win or feeling the other person is trying to cheat you. And those emotions get in the way.

Speaker 3 It's true that a lot of people find emotions to be dominant when they're doing a negotiation. So I'm a little bit like Spock in the sense that I'm trying to bring some logic back into negotiations.

Speaker 3 And if you can combine Spock logic with Captain Kirk's emotional intelligence, you've really got it made.

Speaker 3 So I appreciate that you should be empathetic and curious about what the other side's interests and positions are.

Speaker 3 In fact, one of the things I like people to do is to make the other side's arguments for them. You see, we can't always win on every point, but we can always be understood.

Speaker 3 And a great way to demonstrate that you understand the other side's perspective is to make their arguments for them.

Speaker 1 Why would you want to do that? What would be the benefit to you to make the points for the other side? Seems like you're helping the other side get what they want.

Speaker 3 What I'm trying to do is figure out what it is that they want. Because my goal in negotiation is actually to give them what they want.

Speaker 3 The reason is, if they get what they want, then I can get what it is that I want.

Speaker 1 And so when people enter into these kind of discussions, negotiations with other people, what do you think are the things that derail? What do they do wrong? What are the mistakes they make?

Speaker 3 That's a long list. So one classic mistake is that they try and anchor with a low ball offer.
or a super high ask and they try and soften up the other side.

Speaker 3 But the problem with doing that is that you make yourself untrustworthy. If I'm selling something that's worth $1,000 and you offer me $200 for it, are you trying to take advantage of me?

Speaker 3 Do you not know what this item is worth? If I were to say yes to that deal, what kind of person are you?

Speaker 3 And then you have to come up, say, from $200 to $600 to $750.

Speaker 3 to $900 and next thing you know you've demonstrated that you are just like Gumby you're totally flexible that you have no principles in terms of the way in which you're negotiating.

Speaker 3 And so by starting at a point that's unreasonably far away from

Speaker 3 an appropriate number causes all sorts of troubles in negotiation thereafter.

Speaker 1 And so how would you do that otherwise? If someone says, well, make me an offer here, I'm selling this $1,000 thing, but without mentioning the number. I'm selling this thing.
What will you give me?

Speaker 1 And you know it's worth $1,000.

Speaker 1 Wouldn't you want to try to get it for less?

Speaker 3 Absolutely. So, I'm not saying you start off with a thousand dollars, but I also don't want you to start off with 200.
I want you to start off with a number that you can justify.

Speaker 3 If they ask you how you came up with that number, a good answer isn't, yeah, I tried to pick this low number because I read in a book somewhere that's a good way of softening you up and that I can anchor you with that number.

Speaker 3 Instead, it's

Speaker 3 look, when I see prices on eBay for this, the price is

Speaker 3 $847.

Speaker 3 And I know that you might be able to find somebody who will perhaps overpay. They're really desperate for it.

Speaker 3 But I'm prepared to give you the same price as I could find it on eBay would be one way of doing it. So providing some other possibility, giving them a reference, giving them an argument and a reason.

Speaker 3 for why you're making the number you're making.

Speaker 3 What else do people do wrong? One thing people tend to do is fight fire with fire.

Speaker 3 But as Smokey the Bear will tell you, you want to fight fire with water so that when somebody does something that's escalating, that is inappropriate, don't respond the same way.

Speaker 3 Find the way to put out the fire. In one of my negotiations, I once asked for a price that was way too high.

Speaker 3 And the person on the other side, the buyer,

Speaker 3 looks at me, says, great, where do I sign?

Speaker 3 And then, watching my smile grow on my face, says, huh, just kidding. If you really think that's what is needed, I'm afraid we don't actually,

Speaker 3 it's not going to work out. And it was the nicest possible way of letting me know that what I had done was just not really appropriate.

Speaker 3 as opposed to coming back and making a lowball offer in response.

Speaker 3 So that's one example

Speaker 3 of how not to respond in kind. When somebody makes an ultimatum, don't make an ultimatum in response.
Figure out how to walk them off the ledge. When somebody acts like a jerk, say, look,

Speaker 3 here are my principles. I'm prepared to split the pie with you.
I'm not prepared to do a deal that's unfavorable, that's unfair to me.

Speaker 3 So if you can give me a principle in in response to show me why my argument's wrong,

Speaker 3 I'm flexible on that account.

Speaker 3 Or somebody will lie to you,

Speaker 3 and that doesn't mean that you should be lying in response. So there's a lot of fight-fire with fire as opposed to figure out ways to put out the fire.

Speaker 1 Do you think it's a good idea when you're negotiating something with someone else that you keep the discussion strictly on what it is you're negotiating and what the value of this thing is to you and what the value is to them or should you bring in other things like the reasons why you want this

Speaker 1 is that relevant to the conversation or is it better to just you know stick to what you're talking about and don't elaborate too much

Speaker 3 so imagine a person is selling

Speaker 3 their family business and it's a gas station and the reason they're selling it is because they want to go on a sailing trip around the world. Should they reveal that or not?

Speaker 3 Well you could say it's a frivolous reason and so let's keep it hidden. Let's just say I'm planning to retire and spend more time with my grandkids.

Speaker 3 But when it comes down to it there are good reasons and bad reasons for selling. The buyer knows that you've got a for sale sign so they're wondering why are you selling?

Speaker 3 Is it that there's a leak in one of the storage tanks and the gas station is about to become a super fun cleanup site?

Speaker 3 Is the highway exit ramp about to close so there will be no more cars coming this way?

Speaker 3 In fact, the idea that you want to take a trip around the world is a good reason, not a bad reason from the buyer's perspective.

Speaker 3 And so, yes, go ahead and let them know why it is you are selling the station.

Speaker 1 What about though, if I'm selling something?

Speaker 1 I just did this not long ago. I had a piece of equipment that was no use to me, no value to me.
It was a piece of recording equipment that's obsolete. Nobody wants it.
Except collectors.

Speaker 1 Collectors collect this type of equipment. Consequently, it has value to them.
It has virtually no value to me other than I know it's worth something to a collector.

Speaker 1 But I don't want to tell the person

Speaker 1 it's worthless to me. I want them to pay me what it's worth to them.

Speaker 3 That's true. So that's a great case.
That's like I said. When the seller values it less than the buyer does, there's a pie.

Speaker 3 And that's the time to do the transaction. So you valued it near zero, the buyer values it at $1,000.
Great.

Speaker 3 Now it turns out that there are lots of buyers and one values it at $800, one values it at $900 and one values it at $1,000.

Speaker 3 Then you want to sell it to the $1,000 person. And I think the right price there is more like $9.50.

Speaker 3 Because your alternative is I can sell it to the $900

Speaker 3 person. And so that's really my fallback.
The reason I'm selling it to you is to beat the 900. I can't beat 900 without you.

Speaker 3 You can't

Speaker 3 get this value, this extra value without me. And so we have an extra 100 to split, and that's why I think it should be 50-50.

Speaker 1 What else do people maybe miss?

Speaker 1 Because it often seems that people, when they talk about about negotiation, what they're talking about or what they're thinking about is money, that it's all about the money.

Speaker 1 But as you just said a moment ago, you like to think there's more than just money. So what else are people missing by thinking this is just dollars?

Speaker 3 They miss the opportunity to have creative solutions come into play.

Speaker 3 So if I go back to my couple selling the gas station, turns out that when they come back from their trip they don't have a job and as a result they needed a big reserve fund to help tie them over until they find work.

Speaker 3 But the person buying the station thinks they're great managers and they're always short on good managers.

Speaker 3 And so they would be delighted to have them come back and work at the station as a station manager upon their return. So offer them a job.

Speaker 3 And now the person really wants to sell the station to you rather than to sell it to somebody else. So figure out what the person really wants and give it to them.
Or when you're buying a house,

Speaker 3 how likely is the closing to happen? Is the person getting a mortgage? Is there a mortgage contingency? Is there an inspection contingency?

Speaker 3 What are you going to do with the furniture that's in the house? Does the buyer want it? Does the seller want it?

Speaker 3 Is the closing date?

Speaker 3 Do you want it to be soon or do you want to delay it to help the person have a little bit time to to move? So look for things that can create value that are besides money.

Speaker 1 Talk about what happens when you're in the position of you don't know as much as the other guy, that he's more of an expert on whatever it is you're negotiating and you feel kind of stupid.

Speaker 1 How do you work that to your advantage if you can?

Speaker 3 Well, let's try to at least work that not to my disadvantage because I am in the challenging position. One of the things I like to do there is make what's called a contingent agreement.

Speaker 3 So imagine the art dealer comes in and sees this painting that I inherited from my father and

Speaker 3 says,

Speaker 3 all right, I'll give you $1,000 for it. And I have no idea if this painting is worth $2,000, $10,000, $100,000.

Speaker 3 And the problem is it could cost me $2,000 to get it appraised, which could be more than this painting is worth.

Speaker 3 So what do I do? I could come back and just say $2,000 or $5,000 and pick some arbitrary number, which could lose me the deal if it's really only worth $1,000.

Speaker 3 Or perhaps I'll get $2,000 but the painting is still worth $50,000 and I've missed the big opportunity. Instead, I prefer saying things like, here's what I'm prepared to do.

Speaker 3 I'll sell it to you for $1,000, but any money you make above $10,000, we split evenly so now if the painting is worth somewhere between one and ten

Speaker 3 okay fine they can make some money on this but if this thing is really a hidden masterpiece now I've protected myself so if you don't know what something is worth

Speaker 3 make a deal where you get some share of the upside if it turns out to be worth a lot

Speaker 1 And that way, you get a piece of the bigger pie. And it's all about splitting the pie.
It's really a unique way to look at negotiating. I've never really looked at it this way before.

Speaker 1 Barry Nailbuff's been my guest. He is an entrepreneur and professor at the Yale School of Management.
And his book is called Split the Pie, a radical new way to negotiate.

Speaker 1 And there's a link to that book in the show notes. Appreciate you being here.
Thanks, Barry.

Speaker 1 Have you ever heard of the Baker-Baker paradox?

Speaker 1 Basically, Basically, it's the result of research that says it's much easier to remember a person whose profession is a baker than it is to remember someone whose name is Baker. Why?

Speaker 1 Psychologists believe it's because when people hear about a man who works as a baker, it conjures up images and tastes and smells from our past and creates a very vivid impression.

Speaker 1 On the other hand, the name Baker doesn't mean much. There's nothing about a generic name to latch on to so people forget it more easily.

Speaker 1 The lesson here is that when you meet someone find something visually memorable about them that connects with their name. When you meet Mr.
Baker imagine he is a baker.

Speaker 1 When you meet Bob imagine his head bobbing up and down like a fishing bobber on the water, that kind of thing. You get the idea.
It sounds silly, but it's very effective if you want to remember names.

Speaker 1 And that is something you should know.

Speaker 1 As someone who enjoys this podcast, the best thing you can do to support this podcast is to tell someone else about it who doesn't listen. So it helps us to grow our audience.
I'm Mike Carruthers.

Speaker 1 Thanks for listening today to something you should know.

Speaker 4 The Infinite Monkey Cage returns imminently. I am Robin Ince and I've sat next to Brian Cox who has so much to tell you about what's on the new series.

Speaker 3 Primarily eels.

Speaker 1 And what else?

Speaker 3 That it was fascinating though, the eels.

Speaker 4 But we're not just doing eels, are we? We're doing a bit.

Speaker 3 Brain-computer interfaces, timekeeping, fusion, monkey business, cloud, science of the North Pole, and eels. Did I mention the eels?

Speaker 4 Is this ever since you bought that timeshare underneath the Sagasso C?

Speaker 3 Listen on bbc.com or wherever you get your podcasts.

Speaker 5 Oh, the Regency era. You might know it as the time when Bridgerton takes place, or the time when Jane Austen wrote her books.

Speaker 5 But the Regency era was also an explosive time of social change, sex scandals, and maybe the worst king in British history.

Speaker 5 And on the Vulgar History podcast, we're going to be looking at the balls, the gowns, and all the scandal of the Regency era.

Speaker 5 Vulgar History is a women's history podcast, and our Regency Era series will be focusing on the most rebellious women of this time.

Speaker 5 That includes Jane Austen herself, who is maybe more radical than you might have thought.

Speaker 5 We'll also be talking about queer icons like Anne Lister, scientists like Mary Anning and Ada Lovelace, as well as other scandalous actresses, royal mistresses, rebellious princesses, and other lesser-known figures who made history happen in England in the Regency era.

Speaker 5 Listen to Vulgar History wherever you get podcasts.