Behavioural science to deter fraudsters

Behavioural insights are fundamentally about understanding decisions and behaviours, and leveraging that understanding to design practical policies and interventions.

Behavioural insights take lessons from disciplines like psychology and economics, and is associated with light touch interventions like simplification, personalisation and social norm comparison. These sorts of interventions are sometimes referred to as "nudge" strategies.

In May 2022, the Commonwealth Fraud Prevention Centre, joined by colleagues from Services Australia and the Australian Tax Office, joined an International Public Sector Fraud Forum meeting on the topic of behavioural insights and fraud deterrence.

The International Public Sector Fraud Forum is comprised of representatives from the 5 Eyes Nations – Australia, the United States, Canada, UK and New Zealand.

The deep dive meeting provided the opportunity to hear from experts in each country, including a guest presentation from Dr Yaniv Hanoch, who has been researching scams and fraud, most recently during the COVID19 pandemic.

A key takeaway, which came up over and over again within the research and presentations, is that the likelihood of being caught is a powerful deterrent to criminal behaviour, more powerful than the threat of punishment.

This finding supports the idea that fraud messaging around active detection approaches can be an effective and low-cost method for reducing potential loss from fraud. Proactive counter fraud messaging has the greatest impact when deployed upfront to prevent fraud before it occurs.

The messages we communicate to the public can change a person's beliefs and perceptions about the risks and benefits of committing fraud. Reducing a person's ability to rationalise their actions can be the determining factor in stopping them from attempting or committing fraud.

The Centre has developed a Fraud Messaging Toolkit with more guidance in developing and deploying fraud messaging. To request a copy of the document, contact us at info@counterfraud.gov.au.