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Inside the mind of a fraudster

Psychologists and behavioural scientists Dr Anna Koczwara and Anneloes Hak discuss how fraudsters use psychology to manipulate and engage with us.

Fraudsters are expert manipulators and, as a business owner, it’s important to have discussions with your employees about fraud, so they can recognise red flags and feel comfortable raising concerns if they spot something suspicious. 

“There’s always a human element in business,” says Dr Anna Koczwara, Head of Behavioural Science at the bank. “As a bank we invest in tightening the security of our technology and processes, it’s equally important for us to invest in educating our customers on how to recognise the psychological tactics used by fraudsters.”

“We are all human and we often overestimate our abilities to detect a fraud or scam. We think that fraud is something that won’t happen to us, but it can happen to anyone,” adds Anneloes Hak, Behavioural Science & Applied Psychology Manager at the bank. 

Time-pressure, a false sense of trust and authority bias are tactics to engage us

Fraudsters exploit the fact that we’re all human, busy and at times distracted. They deliberately create a sense of urgency and build trust so that we react quickly, leaving us little time to think about what's happening. “At work we often manage multiple priorities and time pressures, this means that we have to divide our attention between multiple tasks, which can make it more challenging for us to recognise those red flags,” adds Anneloes.

Common fraud tactics often involve building strong trustworthy relationships with potential targets. We can break this down by using three elements of trust:

  1. Competence – fraudsters pretend to provide expert advice, initially providing advice to build a sound relationship.  
  2. Integrity – fraudsters look to mimic the values or company they are targeting, taking initial actions that align to these.
  3. Benevolence – fraudsters make it seem they are acting in the victim’s best interest, for example helping them solve a problem or secure a good deal.

Fraudsters want us to keep secrets. They thrive on secrecy. As a bank we’re on a mission to demystify a lot of the things that fraudsters do, as they continue to use psychology to trick people.

Anneloes Hak
Behavioural Science & Applied Psychology Manager

Fraudsters might also use ‘authority bias’; for example, saying that they know your CEO personally or that they’ve spoken to somebody else in the company already, to add pressure and gain your trust. “These are all ways to build the deception that they are trustworthy and credible, whilst also making it more uncomfortable for you to challenge them which increases the likelihood that you’ll engage and take action,” explains Anna.

Designing jobs and a company culture that focus on building and strengthening trust

As a business it’s important to work together and share responsibility, creating a culture where employees can ask questions and feel comfortable to talk about fraud or raise concerns. “It’s really important that companies focus on strengthening trust, so they know where to go when something doesn’t seem right and feel safe to speak up,” Anneloes points out.

This aligns with the fundamental parts of good job design, says Anna: “People having autonomy to make decisions – saying no to requests they might feel uncomfortable about and feeling empowered to speak up and challenge.

“A company culture that is focused on learning is also important to make sure that fraudsters don’t get away with the same trick twice,” asserts Anna. 

Supporting employees after fraud

The vast majority of people don’t come to work to do a bad job. Being targeted by a scam can create feelings of vulnerability, managers can support the individual to learn from the experience by reflecting on what happened and encouraging them to share their learnings with others. “This helps to give the individual some control back over the situation and build back the employee’s confidence,” Anna says.

It’s good to talk

Some people who have encountered fraud might find it helpful to talk about their experience. It might be a partner at home, a close friend in work, an employee assistance programme, or a support group. It won’t be the same person for everyone, it will be whoever is right for them.

“Fraudsters want us to keep secrets. They thrive on secrecy. As a bank we’re on a mission to demystify a lot of the things that fraudsters do, as they continue to use psychology to trick people. The more we talk about it, the harder it is for them to successfully carry out their crimes,” says Anneloes.

Visit our fraud hub to learn more about security threats to your business.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

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