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Behavioral red flags of insider fraud

Behavioral red flags of insider fraud

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Recognizing the behavioral clues displayed by fraudsters can help organizations more effectively detect fraud and minimize their losses.

7 Key Warning Signs 

  • Living Beyond Means - A fraudster living beyond his or her means has been the most common red flag since 2008.
  • Divorce/family problems
  • Financial difficulties
  • "Wheeler-dealer" attitude
  • Control issues, unwillingness to share duties
  • Unusually close association with vendor/customer
  • Irritability, suspiciousness, or defensiveness

Job Performance as a Warning Sign

A fraud perpetrator's job performance will often suffer while the scheme is taking place. Each of these performance-related issues were cited in at least 10% of fraud cases.
  • Poor performance evaluation
  • Excessive absenteeism
  • Fear of job loss
  • Excessive tardiness
  • Denied raise or promotion

Personal Life as a Warning Sign

In 63% of cases, the fraudster exhibited red flag behavior associated with his or her personal life.
  • Living beyond means
  • Excessive family/peer pressure for success
  • Instability in life circumstances
  • Past legal problems
  • Social isolation
  • Addiction problems
  • Divorce/family problems
  • Financial difficulties

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