Is There a Fraudster in Everyone?


What turns people into fraudsters? Is it just opportunity or does it take more than that?

Paul and Bob are at Schiphol Airport with their 16-year-old daughters. They have known each other for more than ten years. Their daughters go to the same hockey club, they regularly go out for drinks together and sometimes the two families go on joint holidays, each in their own Volvo. Today their daughters are going to a summer school in Spain. They are flying to Madrid and will then take the bus to Salamanca for an intensive two-week language course. However, Paul knows that he has not yet paid his daughter’s tuition fees. For the simple reason that he does not have the required two thousand euros. Despite his well-paid job as a marketing manager, he lives a bit beyond his means.

After waving off their daughters, Paul goes to his work and writes a memo about a marketing event in Salamanca and gets the accounts department to transfer two thousand euros to a bank account in Spain.

It is not about opportunity 

We all know the expression ‘opportunity makes the thief’, but is this really true? PwC has done extensive research into aspects of fraud and ‘opportunity’ amounts to only 18%.

Some more interesting figures: did you know that 20% of employees in, for example, Great Britain have a criminal record? And that on average 50% of all people who have exchanged marriage vows have an affair? In other words, the people around us are not always who we think they are.

All things considered, we are actually aware that all of us occasionally, or in fact regularly, tell lies. Our daily communication comprises small and big lies. We all know this, yet we often strongly and rather unrealistically claim that ‘somewhat incorruptible does not exist’.

Wanting to belong

So what is the reason why we break the rules or not? The same PwC study shows that only 14% is about honesty, ultimately ethics are clearly not that important. The study shows that in 68% of the cases it is about pressure – the pressure of hunger, of needing money, of wanting to belong and, above all, of wanting to be accepted. As people we undergo a logical moral development that is based on wanting to belong to a group, because it offers safety and security. We focus on the norms, standards and values of the group we want to belong to. However, this is not always achievable.

Setting an example

Psychologist Lawrence Kohlberg studied the moral development of people – a field of behavioral ethics – and investigated group behavior. He wondered: ‘What if we could influence convention?’ We can, for example, train children by punishing and rewarding them, but in organizations and companies this no longer works. It would lead to mutiny. What does work is finding role models within the organization who determine the convention. Those are the people whose behavior, sometimes unknowingly, sets the norm. As CEO of ABN AMRO, Gerrit Zalm always takes the regular elevator to his office and on his way up he talks with everyone he bumps into. He is setting the tone at the bank for a culture of dialogue and being approachable.

Sergio Marchionne is CEO of, amongst others, Fiat. If you google him, you will find that he nearly always wears a jumper. Recently, I was in an airplane with four Italians who were all wearing a jumper. I asked them: ‘Do you by any chance work for Fiat?’ Surprised, they replied: ‘Yes.’ Almost unconsciously they copy the example set by their role model.

It’s about the top 

Obviously, role models are mainly found at the top: they are seen by everyone. When problems came to light at Imtech Poland, the organization sent large groups of employees worldwide on an integrity course. In my opinion that was useless: the Board of Directors itself should have gone on a course instead.

At Wells Fargo over five thousand employees worldwide committed fraud. They did not know each other, so they did not influence each other. But one person they all knew was the CEO, who immediately declared in his press statement that there was definitely no connection with his own bonus.

Culture change

What can we do? In any case make sure the atmosphere in the company improves. In Paul’s case, he should not have written a memo, but have had a good conversation with his boss. He could, for example, have offered to borrow the money and pay it back in terms. It would be even better still if Paul could say to his hockey mates: “Sorry, but at this point we can’t afford that holiday, that summer school or that party.” What we need is an environment that accepts everyone as they are.

CEO on a course

So it is not about opportunity. The funny thing is that I am an accountant and 95% of my colleagues, who work on many cases, are constantly looking for that opportunity. They rarely find one. What they should really do is talk to the CEO and send him on a course.

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