Why Do People Commit Fraud?

People commit fraud for a variety of reasons, some of which include single-mindedness blinding them to ethical issues, feelings of disconnectedness or neglect from the company, little sense of individual responsibility, and escalation from smaller thefts. Some people also commit fraud after being bypassed for a promotion.

A self-serving bias is why people commit fraud if they feel they were wrongly turned down for a promotion. They see themselves as better than their co-workers. The feelings stemming from the incident as well as reading too much into situations can lead to fraud.

A self-serving bias sometimes ties into a need for excessive consumption, and fraud results. People see others receive lavish bonuses or seemingly extreme perks while they do not. It seems unfair, and some become jealous. Fraud is a method to avenge the apparent unfairness.

The way a company treats its employees also plays a role in fraud. Strict companies that restrict freedom may create resentful employees who commit fraud. The same goes for companies who treat their employees like thieves from the start and without reason; this is called the Pygmalion effect.

Some people also commit fraud because someone on a higher level asked them to. Obedience to authority can be a difficult behavioral pattern for some employees to ignore.