Understanding our Emotional Response to Fraud

Paul Maskall is the Fraud and Cybercrime Prevention Manager at UK Finance. They also work with the Dedicated Card and Payment Crime Unit (DCPCU).

Paul believes that technology isn’t necessarily the enemy, but it is our relationship with it that needs some work. With a background in law enforcement, intelligence, counter-terrorism a passion for cybercrime and fraud, Paul applies behavioural and psychological principles to the core of his work. In doing so maximising the impact of fraud prevention and cybercrime policy, strategy, and education.

Paul’s work is all about getting people to open up about their experiences of fraud and cybercrime. By discussing the emotional impact of these crimes, and the psychological tricks used by fraudsters people can be better equipped to spot and prevent fraud.

A lot of the existing material on preventing fraud focuses on getting people to trust their gut. However, Paul believes this is ineffective as criminals work hard to deceive people’s gut instincts and build trust with their victims.

Emotional Intuition

Paul used an example to demonstrate ways in which human intuition is attached to spending habits. The choice that is made when selecting a payment method, between using a card or cash. Most people opt for contactless card payments these days, but why is it easier to pay with a contactless card as opposed to cash?

It can be argued that the main difference is that the transaction is felt at a more emotional level when using cash instead of contactless payment. There is a certain amount of intention behind using cash to trade for goods that are contextualised by the human experience of holding something valuable in our hands.

Paying with a card holds less emotional weight because it does not feel as tangible.

Since the move to digital payment methods, almost all of wholesale has shifted from intentional and emotive decision making, categorised using physical cash, to the subconscious, detached spending habits that are dictated by contactless payments. A subconscious and detached relationship towards spending equate to a greater risk of fraud.

A Sense of Risk

People perceive risk in different ways depending on their values, context, and environment and consequently the assessment of risk is very dynamic.

Paul referred to Daniel Kahneman [2], an Israeli psychologist who is notable for his work on the psychology of judgement and decision-making. He talks about the availability heuristic, also known as availability bias.

The availability heuristic refers to the cognitive shortcut where risk is assessed. Risk is assessed based on the availability of examples that can be recalled which display negative consequences.

For example, many people fear flying because they have watched films about plane crashes. There is an imprinted image of the risk that conjures fear and apprehension.

Additionally, there is a higher chance that a person will take action to minimise risk if they have seen visual representations of the risky thing going wrong.

Paul applied this theory to the emotional response that happens when fraud has occurred. It is believed that there is a lack of instinctual emotional response to this because there is no visual or tangible representation of the occurrence.

A fundamental problem in fraud prevention is that the public struggle to fully internalise the risk associated with fraud, even though fraud is one of the most common crimes in the UK.

Better communicating the risks of fraud could change the instinctual emotional intuition that is too often minimises our perception of risk around fraud.

How do we Educate on the Risks?

The key to making people truly aware of the risks associated with fraud lies in how you package it.

Usually, images associated with fraud are extremely negative, but they do not match up with the actual outcomes of falling victim to fraud. Images associated with fraud are often hooded men hunched over a computer.

The victim will never see this hooded man therefore, emotional intuition and a concept of risk is not present within the victim until it is too late. A smarter approach to fraud prevention communications, that demonstrates the actual consequences could involve highlighting the emotional trauma that is associated with fraud through the circulation of lived experience case studies.

Although fraud is an act that is traumatic and violent in nature, it does not always evoke the appropriate emotional response in people. Availability bias shows how this happens and those working to counter fraud should consider this when raising awareness.

[1] Maskall, Paul. 2021. Fraud and Cybercrime Prevention, DCPCU, UK Finance

[2] Tversky, A. and Kahneman, D., 1973. A heuristic for judging frequency and probability. Cognitive psychology