An important aspect of preventing and disrupting fraud and financial is understanding the mindset of fraudsters and why they commit fraud in the first place. The Fraud Triangle was developed by criminologist Donald R Cressey, and it suggests that people will commit fraud when the following three factors are present:
- Pressure / motivation – such as a sudden change in circumstances, a sense of being wronged, or pressure to retain status.
- Opportunity – the knowledge of weaknesses in procedures which can lead to undetected fraud.
- Rationalisation – the ability to justify that the fraudulent activities are not necessarily wrong.
In addition to this, it is important to understand that there are various types of fraudsters that commit different types of fraud. The Commonwealth Fraud Prevention Centre was established in 2019 and developed the Fraudster Personas to raise awareness for the different types of fraudsters. Each persona utilises a variety of methods to defraud their victims and dishonestly gain personal benefits.
- The Reckless – a fraudster that does not care for the consequences of their actions. They disregard any requirements or warnings to gain personal benefits. An example of The Reckless fraudster can be a contractor who accepts a job despite knowing that they cannot provide the correct service.
- The Deceiver – a fraudster that uses false statements, deliberately misrepresents facts, or withholds relevant information, in order to make their victims believe something that is not true. The Deceiver fraudster can be someone who lies about their circumstances to receive Employment and Support Allowance.
- The Impersonator – a fraudster who pretends to be another person using false or stolen identities to dishonestly gain personal benefits. The Impersonator fraudster can be a scammer receiving fraudulent payments using stolen identities.
- The Fabricator – a fraudster who invents or creates false documents, invoices, or receipts which can be used to receive money or other benefits. The Fabricator fraudster could be a business owner that fabricates documents so they can receive a grant.
- The Coercer – a fraudster who manipulates their victims into acting in a desired way. The victim might be threatened, intimidated, or even bribed. The Coercer fraudster could be someone who intimidates their victim into handing over personal or banking information.
- The Exploiter – a fraudster that uses something in a wrongful way to commit fraud. The Exploiter fraudster could be a member of staff who uses their position or privileges at their place of work to access their company’s systems to steal funds or commit other acts of fraud.
- The Concealer – a fraudster that hides evidence of their actions. The Concealer could be a service provider that deletes company records to hide their fraudulent activities.
- The Organised – a group of fraudsters that use a combination of methods in planned, coordinated, and sophisticated ways to commit fraud and gain personal benefits. The Organised fraudster could be a scam operator who creates a false business and website to legitimise a fraud scheme.
When it comes to fighting against fraud, prevention is the best cure. Therefore, being able to recognise the different types of fraudsters allows for people to avoid becoming potential victims. In March 2020, the Commonwealth Fraud Prevention Centre published an introductory guide that explains the various counter measures that can be implemented against the different types of fraudsters. These counter measures include the sharing and verification of information and identity, as well as measures that promote honesty and integrity in the workplace.
Furthermore, pre-employment screening act as a deterrent for dishonest individuals applying for positions within your organisation, but it also sets a positive culture for all employees, knowing that an organisation has a zero tolerance to fraudulent behaviour and looks to save the organisation from fraud losses.
TenIntelligence is committed to ensuring the security of our Clients and organisations.
If you have a suspicion of fraud in the workplace, or have spotted some of the fraud personas highlighted above, then consider reporting the fraud to your legal, security or compliance team.
Alternatively, we are here to help, by setting out clear objectives in an investigation plan, and:
- determine the finer details of the suspected fraud, look to identify those involved and understand the mechanics of the fraud
- perform thorough investigations, both in the interest of the victim and to clear innocent people under suspicion
- identify and recover assets lost to fraud and prevent further losses
- provide accurate evidence to help establish proof of loss, guilt and personal gain
- review and implement measures to prevent fraud from occurring again
Whatever the investigation, each case must begin with the intention and preparation that it could end in litigation.
By utilising various OSINT techniques, a “Trust but verify” mindset, and providing the required due diligence, we enable our clients to make assured decisions about an individual, a company or an investment. Contact our team for further information about how we can help.
Rachael Legg – Senior Analyst