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