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Inside the Mind of a Fraudster.

By: J. Michael Skiba, Dr. Fraud

Consider these disturbing facts: 1) fraud costs an average of $82 billion per year, 2) twenty-five percent of the public believes it is acceptable to commit fraud, 3) there were 17 billion connected devices in 2018 and 50 billion devices today, 4) over 72% of businesses will be targeted for fraud and of those that are victims, 60% will go bankrupt as a result. These facts should raise a flag that fraud and technology should be on one’s strategic radar as immense losses can result. Technology is all around us, from self- driving cars, personable wearables, smart appliances, and connected cities. All of these platforms push data into circulation; data that causes a shift in our psyche. This shift in psychology is also evident in the fraudster, and companies will need to adjust their strategies to effectively face this new type of criminal.

Technology has incredible advantages in the business world, but it also increases the disconnect a customer has with companies. Studies in criminology reveal that when an individual does not identify or “feel” their victim, then crime is more likely to ensue. With business automation and tech advancements  in the business world, this also creates more detachment with customers, which translates into making it easier for them to commit fraud on a psychological level as there is no identifiable victim. From a purely psychological perspective, technology will breed more fraud as this detachment will make fraudsters feel “ok” about committing these suspicious acts.

But all is not gloom and doom as carriers can meet the challenge and leverage many fraud fighting tools.  There are, of course, technology tools, such as machine learning software packages, aggressive spam filters and everything in between. However, one of the most beneficial and often overlooked strategies is training and awareness as these approaches are very low cost (when compared to expensive software programs) and have incredible return on investment. Conducting training accomplishes two key tasks: first, it provides tangible information to the company on problems and where the current and potential vulnerabilities are; second, it creates a personal connection between those in the actual training session. This connection is highly overlooked yet is an extremely important aspect of a successful fraud program, as communication across departments, units, and disciplines is critical for highly focused strategies. Consider that about 50% of employees click on a malicious e-mail or insert a foreign USB stick into a computer, and how it takes on average 164 days to detect ransomware, it is critical that the internal staff is well trained and well educated as to the damaging effects of fraud.

All of the companies that I have worked with through my career have remarked that offering training is an extremely worthy investment of time and resources. Training serves to formally educate but also simply creates an awareness of the fraud problem, which is the first step to prevention!

Stay safe!


Dr. Fraud



Dr. J. Michael Skiba, Dr. Fraud, has over 25 years of international counter fraud experience. He has been a professor/researcher for 15 years and holds an MBA and PhD in economic crime. He is a media contributor on NBC, ABC, Sirius XM, and many other media outlets and also a trainer for the U.S. ATF. He founded the Dr. Fraud Training Group, a company specializing in providing training and consultation services to companies on fraud and scams.

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