Why fraudsters commit fraud repeatedly

July 12th, 2021

In previous articles, we’ve discussed why some people commit fraud. This article digs a little deeper to understand why a one-off instance of fraud could lead to repeated offending. Multiple acts of fraud can occur for many different reasons, from opportunity, to circumstances, to simply being a tactic of organised crime groups.

To understand the psychology around committing fraud, we need to understand what triggers fraudulent behaviour.

The fraud triangle hypothesis

Dr Donald Cressey developed the fraud triangle hypothesis in 1953 to help us understand the enablers or motivators of fraudulent behaviour. These factors apply across all types of fraud, including insurance fraud.

Regardless of whether soft (unintentional or unintended) or hard (intentional and planned) insurance fraud is taking place, at least one of the following factors can be applied, and in some cases, all can be attributed to acts of fraud.

  1. Motivation – what is driving the behaviour? There could be underlying factors such as financial stress, greed, addiction or a sense of entitlement.
  2. Opportunity – there may be a flaw in a process or a legal loophole that someone can take advantage of. This is often a temporary situation with a perceived low risk, but high financial gain.
  3. Rationalisation – this comes down to the mindset of an individual and whether they can justify committing an act (for example, “my insurance company can afford to pay me out, I’ve paid for insurance for years and never claimed”)

If you’ve committed a fraudulent act, and appear to have “got away with it”, will you choose to commit this act again? Research shows that the fraudulent pattern is likely to be repeated if the perceived risk is low, and the likelihood of being caught is unlikely. 

Of course, most people are law-abiding citizens, but there are a minority of people looking for opportunities to challenge societal norms. A mix of the right personality type or personal situation, in the right environment, can lead to the motivation to commit fraud. As a society, we all play a role to influence our friends and families about resisting the temptation to act unethically. 

Instances of repeated fraud

A recent New Zealand example that made headlines was the case of Joanne Harrison, the fraudster who committed multiple fraudulent offences with Tower Insurance, a government department and local council. The serial nature of her fraud offences raised many questions about why she did it, and how she managed to get away with it. A common theory is that fraudsters live in a fantasy world, where they manage to convince themselves they’re doing the right thing. Having a strong sense of entitlement can be another contributing factor. In Joanne’s case, although she was caught committing fraud, she successfully won name suppression and was able to apply for other roles and commit further fraud due to lax employment vetting practices.

“With insurance company fraud, some offenders believe they have a right to defraud insurers.”


While some people may be able to justify their fraudulent activity by thinking that large companies or government agencies can afford it, other fraudsters target individuals if they think they can get away with it. A New Zealand horse trainer ripped off individuals by selling non-existent horses and insurance policies. The reason he gave for committing the fraud was that he was battling a gambling addiction.

In the UK, a ’crash for cash’ insurance fraudster intentionally crashed into eight drivers within one year to claim the insurance money. The reason he gave during his trial was that he was in debt and needed the money. The financial situation this fraudster found himself in, made him disregard the innocent people he risked injuring. He was able to commit multiple frauds by using false names and addresses and taking out multiple insurance policies.

When fraudsters may commit repeated fraud

There are some common scenarios that insurance companies look out for in their insurance investigations. Some of these situations are well known to be triggers for ongoing fraud, but some offenders may simply commit one act before getting cold feet.

A New Zealand insurance expert identified these ways of committing fraud:

  1. Breaking the ‘moral seal’ – after an initial genuine claim, some people then progress to making fraudulent claims once they’re familiar with the claims process.
  2. New technology claims – people trying to upgrade to the latest phone / computer / TV shortly after new technology is on the market.
  3. Weather events – using a major weather event to claim on a house or vehicle policy.
  4. Non-disclosure – such as not disclosing you’ve had a car accident when taking out a new car insurance policy.
  5. Double dipping – claiming with multiple insurers for the same incident.

In the US, insurance fraud often centres around greed and hardship. Common fraud cues include:

  1. Frequent insurance claims.
  2. Claimants who are too calm or unworried about their claims.
  3. Lack of documentation for family heirlooms and jewellery.
  4. Handwritten receipts supporting the value of claimed items.
  5. Financial stress (poor credit score etc).
  6. Increasing insurance cover shortly before making a claim.

Know people making dishonest insurance claims?

Do the right thing! Do your friends and family a favour and tell them not to. Remember, you can also report insurance fraud by visiting our website. You can make reports anonymous if you wish.