Psychology of the FraudsterNikki Grieve-TopInvestigative PsychologistHealth Risk Management, Bupa International7th November 2013

Psychology of the Fraudster

1. Fraudster

• Typologies

• Motivations

2. Fraud Handler/Detector

• Detection difficulties

• Objective indicators

Attitude to Fraud

• 69% of Britons would make a dishonest claim if they thought they could get away with it

• 49% believe most people inflate the value of the claim one third or more

• 76% agreed that fraud is common in making insurance claims

• 48% would not rule out making a fraudulent insurance claim in the future.

(ABI, 2000; 2003)

• This suggests that the main cause of fraud is policyholder attitude!

Typology

Organised

RepeatOpportunist

Opportunistic

Opportunistic

Repeat

Organised

Organised

Motivations and consequences

£4million a week is being

made on fake claims by

criminal gangs

Rare prosecutions (but improving!)

Motivation

Historical views of ‘greedy, needy, troubled’ or ‘babes, booze and bets’.

Neutralisation

• ‘there is no victim’

• ‘they’re insured’

• ‘no one will notice’

• ‘if you’re that gullible you deserve to be conned’

• ‘it’s a legal grey area’

• ‘I’ll pay it back once the crisis is over’

• ‘I did it for my kids’

Insurance Fraud

• Not restricted to any one race, gender, profession or economic group and

may offend in other areas of the financial sector.

• Motivations of fraudsters extend beyond cost benefit analysis.

• Morals, decision making, identity and opportunity all play a part.

Duffield & Grabowski (2001)

Detection of Fraud

Meta-analysis of lie detection

• Mean accuracy rate 54%

• Experts (Police, judges, psychiatrists,

job interviewers and auditors etc) 55.5%

• Students 54.2%

• Experience and accuracy appear to have a negative correlation.

• Studies have shown that in fact new recruits do better than experienced officers; But experienced officers were more confident (Depaulo & Pfeifer, 1986).

• Training to detect deception can decrease accuracy of detection.

– Bias judgements towards deception therefore increase false positives.

– Participants may become more confident but wrong.

(Köhnken, 1987; Kassin & Fong, 1999; Masip, Alonso, Garrido & Herrero, 2009)

Pitfalls

People tend to underestimate their ability to lie and overestimate their ability to detect lies.

• Examining the wrong cues

• Because widespread faulty beliefs about cues to deception

Subjective Non-verbal Cues

Expressed by practitioners

• Liars are more gaze aversive

• Liars make more self-manipulations

• Liars make more head move movements/nods

• Liars make more arm/hand movements

• Liars make more leg/feet movements

• Liars fidget more

• Liars shift position more

• Liars make more body movements in general

Subjective Non-verbal Cues

Expressed by laypersons

• Liars are more gaze aversive

• Liars shift position more often

• Liars make more illustrations

• Liars make more self-manipulations

• Liars make more arm/hand movements

• Liars make more leg/feet movements.

• Liars blink more often

• Liars have a higher-pitched voice

• Liars make more speech disturbances

• Liars take more and longer pauses

Subjective Non-verbal Cues

Expressed by laypersons

• Liars are more gaze aversive

• Liars shift position more often

• Liars make more illustrations

• Liars make more self-manipulations

• Liars make more arm/hand movements

• Liars make more leg/feet movements

• Liars blink more often

• Liars have a higher-pitched voice

• Liars make more speech disturbances

• Liars take more and longer pauses

Subjective Verbal Cues

Expressed by practitioners

• Liars are less consistent.

• Liars stories are less plausible.

• Lies contain fewer details.

• Liars speech is less fluent

Subjective Verbal Cues

Expressed by laypersons

• Lies seem less plausible.

• Lies are less consistent.

• Liars give more indirect answers.

• Liars make fewer self-references.

• Lies are less detailed.

• Lies are shorter.

• Lies contain more negative statements.

• Lies contain more irrelevant information.

Subjective Verbal Cues

Expressed by laypersons

• Lies seem less plausible.

• Lies are less consistent.

• Liars give more indirect answers.

• Liars make fewer self-references.

• Lies are less detailed.

• Lies are shorter.

• Lies contain more negative statements.

• Lies contain more irrelevant information.

Why Do These Beliefs Last?

Illusory

CorrelationsFeedback

Belief

Perseverance

Confirmation

Bias

Why don't we improve?

• Lying is a fundamental part of society and social interactions

– Altruistic lies (white lies)

– Violation of social norms

(Köhnken, 1986; DePaulo & Pfeifer, 1986; Meissner & Kassin, 2002; Bond & DePaulo, 2006)

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Objective Indicators to Detection

Meta analysis

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Objective Non-verbal cues

• Liars speak in a higher pitch.

• Liars make fewer movements with arm/finger/hands.

• Liars make fewer illustrations.

• Liars take longer pauses.

• Liars make fewer movements with legs and feet.

Objective Verbal Cues

• Liars answers are less plausible and convincing.

• Liars stories contain fewer details.

• Liars give more indirect answers.

• Liars provide shorter answers.

• Liars make fewer self references.

• Liars tell the story more chronologically correct.

• Lies contain less temporal information.

• Lies contain less spatial information.

• Lies contain perceptual information.

Conclusions

Cues are not ‘all or nothing’.

Lie cues will also be found in truthful accounts and vice versa.

Cues need to be appropriate for the context (characteristics of the situation, liar and lie).

Benefits of training truth and deception indicators to even out bias effects and increase open-mindedness.

However…

Highly motivated fraudsters can effectively engage in behaviours designed to

create honest impression

Liars who can adopt such countermeasures can fool even professional lie

detectors

Even trained practitioners revert back to beliefs!

Never catch 100%

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Thank you. Any questions?