1. Psychology of the Fraudster Nikki Grieve-Top Investigative Psychologist Health Risk Management, Bupa International 7th November 2013

2. Psychology of the Fraudster 1.Fraudster Typologies Motivations 2.Fraud Handler/Detector Detection difficulties Objective indicators

3. 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!

4. Typology Organised RepeatOpportunist

5. Opportunistic

7. Repeat

8. Organised

10. Motivations and consequences £4million a week is being made on fake claims by criminal gangs Rare prosecutions (but improving!)

11. 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’

12. 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)

13. 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)

14. 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

15. 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

16. 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

17. 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

18. Subjective Verbal Cues Expressed by practitioners Liars are less consistent. Liars stories are less plausible. Lies contain fewer details. Liars speech is less fluent

19. 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.

20. 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.

21. Why Do These Beliefs Last? Illusory Correlations Feedback Belief Perseverance Confirmation Bias

22. 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) 22

23. Objective Indicators to Detection Meta analysis 23

24. 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.

25. 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.

26. 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.

27. 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%

28. 28 Thank you. Any questions?