It’s widely considered that there are three main factors for fraud – motivation, opportunity, and lack of surveillance.
1. Common motivation factors
There are a number of possible motivations for committing fraud. These include:
- Financial pressures: A person might commit fraud due to financial difficulties. This can be a result of unfortunate circumstances, such as in the case of a relationship breakdown, or more strongly self-inflicted, from living a lavish lifestyle beyond their means or getting into serious gambling debt.
- Peer pressure: A person might be pressured to collaborate in a fraud at work, and go along with it to be accepted in the ‘in group’ or to avoid harassment.
- Personality traits: According to the Australian Institute of Criminology (AIC), certain personality types may be more inclined towards committing fraud – such as opportunists, narcissists, or people who like to lord it over or manipulate other people, and who enjoy the challenge of beating the system and fooling others.
- Disgruntlement: In some cases, resentment can be involved – such as where an employee feels overlooked for a promotion or pay increase they feel they deserved, or where they feel victimised or treated unfairly (whether real or imagined).
Rationalisation can also play a part, with a perpetrator justifying their actions to alleviate guilt. This might include thinking “I deserve it” or “it’s not hurting anyone” or “the company can afford it and won’t even notice the loss.”
3. Lack of surveillance
Since fraud is all about secrecy and deception, it is not always easy to uncover. Surprise audits, anonymous hotlines, and continual monitoring can help in detecting fraud. At Wise, we offer a whistleblower hotline service that can help organisations to detect fraud. Get in contact with us for more details.