The Psychology of Fraudsters

We often wonder why people commit fraud, why they steal things that do not belong to them and what goes through their minds when they do such awful things. The answers can be explained by Donald R. Cressey's famous concept, which was developed in the 1950's to explain why people commit fraud. Cressey, a criminologist came up with a theory which he called the 'fraud triangle' to understand the basics of fraud. According to Cressey, there are three elements present in every fraud: Motivation, Opportunity and Rationalization.


In this element, Cressey says that a person always feels pressure or feels a need to commit fraud. It might be a financial need such as high medical bills or debts or it can be a desire for material goods that makes a person want to commit fraud. Sometimes, there may even be a need for good results at work or gambling and even drugs. So, it does not necessarily have to be a financial need or pressure that makes one commit fraud.


When there is a need, the fraudster usually looks for opportunities to commit fraud. And the workplace is always a good target. Employees may have certain access to records, valuable documents or other information that would allow them to commit fraud. They may also have heard stories from other employees, who may have cheated the employer before, and may have gotten away with it. Therefore, internal access as well as knowledge about what goes on in the company may make it easier for them to commit fraud.


Fraudsters always rationalize their behavior by convincing themselves that committing fraud is okay. For instance," I deserve it. I only want my share", "After this, I'm done", "They'll blow their money anyway" etc. Fraudsters will also rationalize their behavior by convincing themselves that they are just "borrowing" money and will pay it back one day. Some fraudsters may say that the company has enough money and it won't affect them in a big way.

Therefore, employers must take action to avoid fraud from happening at their companies. Learn about the fraud triangle and take control especially when there is an opportunity to commit fraud. Limit access to valuable information and documents and allow employees only to handle internal information when it is necessary for the job.

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In 2003, more than 10 million Americans fell victim to identity theft.

Identity theft costs business and individuals $53 billion dollars annually

In 2003, Americans spent 300 million hours resolving issues related to identity theft.

70% of all identity theft cases are perpetrated by a co-worker or employee of an affiliated business.