Getting Inside the Mind of a Fraudster: Why People Commit Fraud

Fraud is a serious crime and a deceptive act people commit for personal gain, often at the expense of others. According to the Federal Trade Commission, there were approximately $8.8 billion in losses from fraud in 2022, up from $6.1 billion in 2021. 

But why does fraud happen? In this blog post, we’ll explore some of the most common motivators that drive fraud. 

Financial Pressure

According to the American Psychological Association, 65% of respondents cited money as a significant source of stress. It’s no surprise, then, that one of the most common reasons perpetrators commit fraud is because they’re under financial pressure resulting from things like job loss, mounting debt, or the desire to maintain a certain standard of living. These pressures sometimes make fraud an appealing option to make ends meet. In some cases, fraudsters may view their attempts as only a temporary solution to a short-term problem.


Some individuals are simply motivated by the desire for material wealth–and engaging in fraudulent activities is a way they feel they can easily acquire it. This could involve embezzling funds from their employer or engaging in insider trading. Individuals motivated by greed may rationalize their behavior by convincing themselves that they’re somehow entitled to the money.

Lack of Ethics

Fraud becomes easier to commit for those who don’t have a solid moral compass and don’t fully understand the consequences of their actions. The lack of ethics makes it challenging for these individuals to see that they’re doing anything wrong by engaging in fraudulent activities. Also, they may not fully appreciate the impact of their actions on others. Lack of ethics could result from a variety of factors, such as upbringing, education, or socialization.


Addiction can be a powerful motivator leading individuals to behave in ways they otherwise wouldn’t. In some cases, individuals who struggle with addiction may turn to fraud as a way to support their habit. This could involve stealing from their employer or engaging in other fraudulent activities to obtain money or goods simply to feed their addiction.

Pressure to Perform

In some industries, such as sales, there may be significant pressure to perform and meet targets or quotas, leading some individuals to engage in fraudulent activities. This could mean inflating sales figures or engaging in other deceptive practices to make it seem like they’re meeting their goals.

Psychological Issues

Finally, some individuals may engage in fraudulent activities because of underlying psychological issues. This could include personality disorders, such as narcissism or sociopathy, or other mental health issues, such as depression or anxiety. Individuals with these conditions may have a distorted view of reality or struggle with impulse control, leading them to engage in such risky activities.

Point Predictive’s Approach to Fraud

Fraud is a complex issue with a range of underlying motivations. But with the growing prevalence of fraud, it’s vital that individuals and organizations remain aware and vigilant to prevent it from occurring. 

Point Predictive uses patented machine learning technology built on a unique risk data repository with more than 20 billion consumer risk attributes, helping lenders to prevent fraud by accurately and quickly validating income, borrower identity, and employment. To learn more about why some of the largest names in lending use our solutions –and see which ones can help you–schedule a free demo with our solution experts. 

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