Motivation in the Fraud Triangle

Organizations face many frauds that cost them millions every year. It is a big trouble for the running businesses as well as for individuals. But the basic question arises: why does fraud happen in the first place? To understand this better, the method of the fraud triangle was established by criminologist Donald Cressey in the 1950s. He concluded that three things are required for the occurrence of the fraud, i.e., opportunity, rationalization, and motivation.

This guide will focus on the motivation part of the fraud triangle. Questions like why do people feel the requirement for committing fraud? What drives them to cross that line? Let us analyze the motivations of fraudsters.

What’s Motivation in the Fraud Triangle?

In simple terms, motivation is the reason someone commits fraud. It’s the pressure or need that pushes them to act dishonestly. Motivation isn’t about having the opportunity to steal or finding a way to justify it (that’s opportunity and rationalization). Motivation is the why behind the crime.

People are different, and so are their reasons for committing fraud. Some might be in financial trouble. Others might feel pressure at work or just think they’re owed something. Let’s dive deeper into the types of motivation that can lead to fraud.

Common Reasons People Commit Fraud

Financial Pressure

One of the biggest reasons people commit fraud is financial stress. Everyone knows that money problems are tough. Maybe the person has mounting debt or unexpected expenses. They might feel desperate to pay off bills, take care of their family, or keep up with their lifestyle. They don’t see any way out—except by cheating.

For an instance, an employee of the company can face plenty of financial problems because of credit card debt and may believe that they are having difficulty covering their expenses. The employee might opt to misappropriate funds from the company for the solution of the situation, rationalizing to themselves that it is only short-lived or the employee deserves it because of the effort they’ve put forth.

Lifestyle and Peer Pressure

The primary objective of this motivation is to maintain one’s external appearance. In today’s materialistic world, people are very conscious about their wealth and success. Social media, peer groups, and expectations from family make us think we must always showcase our best self. Once in a while the pressure gets more intense, leading people towards committing fraud to fund their high-end way of living.

Let’s say a young employee working in a corporate job sees their friends driving fancy cars or going on exotic vacations. They want to be part of that world, but their paycheck doesn’t allow it.

Workplace Stress and Performance Pressure

In companies, employees usually face the pressure to satisfy performance criteria. The pressure can be applied by the owners, clients, and internal expectations. In case the pressure gets intense and targets are unrealistic, employees feel that they do not have an option or choice other than to alter the numbers or take what’s not theirs to create the appearance of success.

For instance, a sales representative is unable to get the bonus unless the defined target is achieved. It can result in making up fake figures for sales by the sales representative or taking credit for the deals that did not occur in reality.

Feeling of Injustice or Entitlement

Some fraudsters believe they are entitled to more than what they get. It can arise because maybe the feeling of working underpaid or not being given enough credit at work makes them consider it to be wrong. They believe they are worth more than what they’re earning. This feeling of unfairness can make them feel justified in stealing from their employer.

For an example an employee an employee has spent years working hard without receiving raises or recognition. They’ve seen other people get promoted, but not them. They might think, “I work just as hard, but I don’t get what I deserve.” The business owes me money, and I’m just taking what’s mine. They commit theft because they feel like they deserve it.

How to Deal with Motivation in Fraud

Now that we know what motivates fraud, let’s talk about how organizations can stop it from happening. It’s not enough just to address opportunity or rationalization—motivation needs attention too.

Create a Fair and Supportive Environment

If people are under financial pressure or feel like they’re not being treated fairly, they’re more likely to commit fraud. Organizations can reduce these pressures by offering fair pay, benefits, and support programs. A transparent, supportive culture makes people feel secure and valued, which lowers the chances of fraud.

Offer Help with Personal Problems

Financial issues, family problems, or stress can push people toward fraud. Employee Assistance Programs (EAPs) are one way that employers may assist. These programs offer counseling, financial advice, and support for personal issues. When employees feel they have someone to turn to for help, they’re less likely to resort to fraud.

Set Realistic Expectations

At work, setting impossible targets creates stress and encourages fraud. Companies should set goals that are achievable and realistic. When employees feel they can succeed without resorting to unethical behavior, they are less likely to fake numbers or steal.

Fraud Training and Awareness

Regular training in how to stop scams is a must. When workers know what will happen if they cheat and what kind of behavior is expected of them, they are less likely to be tempted to do it. Also, regular checks help find fraud early on, which makes workers less likely to try anything in the first place.

Questions to Understand your ability

Q1.) What’s the real deal with the “Motivation” part of the Fraud Triangle?

a) It’s all about finding the perfect opportunity to steal.

b) It’s the excuse people use to justify their actions.

c) It’s the intense pressure or reasons that push someone to commit fraud.

d) It’s the financial gain they hope to get from the fraud.

Q2.) Which of these isn’t one of the typical reasons people commit fraud?

a) Serious financial problems.

b) Trying to live up to a flashy lifestyle and peer expectations.

c) Feeling like they deserve more than they’re getting.

d) Having no real pressure or expectations at work.

Q3.) Why do some workers get so desperate that they resort to fraud because of job pressure?

a) They have impossible targets and feel like fraud is the only way out.

b) They’re simply bored and looking for excitement.

c) They’re too lazy to do their actual job.

d) They’re getting paid way too much and still want more.

Q4.) How can companies tackle the financial pressure that might push employees to commit fraud?

a) Ignore their problems and raise targets even higher.

b) Give them Employee Assistance Programs (EAPs) and financial advice.

c) Make their salary structure more confusing.

d) Fire anyone who mentions personal issues.

Q5.) What’s one way to stop fraud before it starts by attacking the motivation behind it?

a) Set crazy high goals to pressure employees even more.

b) Create a transparent, supportive, and fair work culture.

c) Keep employees in the dark about ethics and fraud.

d) Reduce training sessions and make everyone fend for themselves.

Conclusion

Motivation comes as a significant factor in the case of fraud occurring. It can be sourced due to financial pressure, lifestyle expectations, stress at the workplace, and feelings of self-entitlement, and understanding these is crucial to know about the “why” behind these instances of fraud. Organizations are required to target the primary causes behind these motivations with the help of generating a fair and supportive environment, offering support, setting up realistic targets for employees, and making sure fraud awareness is a top concern.