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Would this Deter You?

Would this deter you?

Can we deter fraudsters?

I encountered this friend on a hike in the mountains and decided to re-route my planned course. So yes, this guy deterred me!

Deterrence theory is a criminological principle based on the classical criminological works of Cesare Beccaria and Jeremy Bentham, who portrayed criminals as individuals that can be deterred from deviant behavior by the modification of environmental factors. There is an underlying assumption in deterrence theory that fraudsters are rational and cognitive thinkers who will avoid deviant behavior if they are highly deterred. There are two areas that should be the focus for companies; specific and general deterrence. Specific deterrence refers to how fraudsters must be taught to think that fraud will not be tolerated, which will hopefully result in personal behavior modification against deviant behavior. This form of deterrence focuses on ways that a specific individual can be deterred from a certain activity—in this case, fraudulent activity. From a counter fraud perspective, companies should show that they are hard targets and thus deter fraud on this specific level.

General deterrence focuses on ways that companies can send a “general” message that their company will not tolerate fraud; which will hopefully deter deviant behavior before it is even considered. One corporate strategy in the area of general deterrence would be to publicize strict zero-tolerance programs which make it clear that fraud cases will be diligently investigated.

Based on my experience, I do believe that these deterrent strategies can assist carriers in preventing fraud; and I highly encourage the use of this approach as part of a multi-pronged fraud strategy.

Stay safe!

Dr. Fraud


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