Are You on the Naughty or Nice List?

After Thanksgiving, my family begins decorating for Christmas. We listen to Christmas music in the car and watch Christmas movies almost every night. Santa Baby by Eartha Kitt is my favorite original song; Silent Night by Harry Connick, Jr. is my favorite traditional song; and Elf is my absolute favorite movie.

It is such a special time of year. It is a time for giving, a time for sharing, and a time for reconnecting with friends and family. While we are busy shopping and visiting, Santa is determining if we should be on the Naughty list or the Nice list.

Santa has enough evidence to put me on either list. It is easy for me to identify the good deeds that I did throughout the year, but I have to put on my Santa hat to recall all the naughty things. We all have weak moments or lapses in judgment which cause us to do naughty things. When we look back on events, we tend to place more weight on the good deeds and rationalize our naughty ones.

Does this sound familiar? Fraudsters are able to do the same thing to justify their actions. It is hard to understand how a fraudster can rationalize their behavior, but if you put yourself in their shoes, you may be able to see their side. That’s not to say we would make the same decisions, but it may be easier for us to see why they made their decisions.

This is a very important point to consider when fighting fraud because it is one of the three basic principles of the fraud triangle. If a person has a certain level of pressure (e.g., financial difficulties) and there is an opportunity (e.g., lack of controls), then fraud is likely to occur if a person can rationalize it. Rationalization is the key to a person going from being a trusted employee to a fraudster. It doesn’t take much for an average person to take that step.

This will give you something to think about over the holidays. I wish you safe travels and hope that Santa leaves you presents instead of coal.

For weekly insights on fighting financial fraud, click here: