Page 463 - ACFE Fraud Reports 2009_2020

Behavioral Red Flags Displayed by Perpetrators
Our survey respondents were asked to identify which, if any, common behavioral indicators were exhibited by the
perpetrators before their frauds were detected. Overall, at least one red flag was identified in 92% of cases, and, in
64% of cases, the fraudster displayed two or more behavioral red flags. Figure 71 shows the distribution of those
red flags. Approximately 44% of fraud perpetrators were living beyond their means while the fraud was ongoing,
and 33% were experiencing known financial difficulties. Other common red flags were an unusually close asso-
ciation with a vendor or customer (22%), displaying control issues or an unwillingness to share duties (21%), a
general “wheeler-dealer” attitude involving shrewd or unscrupulous behavior (18%), and recent divorce or family
problems (17%). These six red flags were also the most common behavioral indicators in each of our last three
studies. In general, the distribution of behavioral red flags from year to year has followed a remarkably consistent
curve despite the fact that each of our studies contains entirely distinct cases of fraud and perpetrators.

Figure 71: Behavioral Red Flags Displayed by Perpetrators

Living Beyond Means 43.8%
Financial Difficulties 33.0%
Unusually Close Association with Vendor/Customer 21.8%
Control Issues, Unwillingness to Share Duties 21.1%
“Wheeler-Dealer” Attitude 18.4%
Divorce/Family Problems 15.0% 16.8%
Irritability, Suspiciousness or Defensiveness
BEHAVIORAL RED FLAG Past Employment-Related Problems 8.9% 11.6%
Addiction Problems
Complained About Inadequate Pay
9.4%

Refusal to Take Vacations
8.6%
Excessive Pressure from Within Organization 8.4%
Social Isolation 7.4%
Complained About Lack of Authority 6.5%
Excessive Family/Peer Pressure for Success 6.0%
Instability in Life Circumstances 5.9%
Past Legal Problems 5.6%
0% 10% 20% 30% 40% 50%
PERCENT OF CASES

RepoRt to the NatioNs oN occupatioNal FRaud aNd abuse 59