Nav: Home

Pain of rejection makes us more likely to commit fraud

July 25, 2016

People commit fraud because they are unhappy about being rejected, a new study in Frontiers in Psychology has found.

Many of us might not professional criminals, however when an insurance company rejects our claims, we are more likely to inflate the claims.

Insurance companies take note: we are more likely to submit false insurance claims if our original submissions are rejected. Regardless of whether that rejection is fair or unfair, or if there is a financial reward at stake, being rejected makes us feel unhappy and we react by behaving dishonestly.

In this study, which used a mock insurance claim scenario, people whose claims were initially rejected were quick to fudge their stories to get their claims settled.

Whilst the odd small claim inflation in the real world may seem harmless enough to the perpetrator, insurance fraud is a very expensive crime. According to the FBI, insurance fraud amounts to around $40bn per year, or $400-$700 per family per year in the US.

Dr Sophie Van Der Zee explained "Fraud is a widespread issue that is costing society and thereby each individual large sums of money. The problem with fraud is that it benefits a few people, but as a result harms the rest of a population. "

Understanding what drives people to falsify information on their insurance claims could mean huge savings to both the insurance firm and the consumer. The scientists responsible for this research think they have the answer: clarity and transparency on the part of the insurer. Make the guidelines clear, and make the rejection policy clearer again.

The study looked at the rejection of a person's efforts, and how it affected their emotions and subsequent behaviour. Using an online platform, participants filled out and submitted mock insurance claims and reported on their levels of happiness, sadness, frustration, anxiety, and guilt. The claims were either accepted or rejected by the researchers.

People whose claims were rejected reported more negative emotions. They were also significantly more likely to cheat or lie in the next phase of the study, regardless of whether the rejection was made on objective or subjective grounds, or whether or not there was a financial incentive.

Basically, it didn't matter if the rejection was fair or not, or if they stood to gain financially: insurers - rejection hurts, and you're going to pay.

Dr Van Der Zee said: "This means that tackling fraud will positively affect a lot of (honest) people's lives. If we understand when people tend to behave dishonestly and commit fraud, we can construct the environment in a way that people are encouraged to behave honestly rather than deceptively. Seeing as the detection of deceit and fraud is very difficult [] prevention is better than cure. "

The research for this study was conducted over the course of two and a half years, and the researchers are already in talks with several Dutch insurance companies, with a view to testing their ideas in the real world.
-end-


Frontiers

Related Emotions Articles:

How people want to feel determines whether others can influence their emotions
New Stanford research on emotions shows that people's motivations are a driving factor behind how much they allow others to influence their feelings, such as anger.
Moral emotions, a diagnotic tool for frontotemporal dementia?
A study conducted by Marc Teichmann and Carole Azuar at the Brain and Spine Institute in Paris (France) and at the Pitié-Salpêtrière Hospital shows a particularly marked impairment of moral emotions in patients with frontotemporal dementia (FTD).
Emotions from touch
Touching different types of surfaces may incur certain emotions. This was the conclusion made by the psychologists from the Higher School of Economics in a recent empirical study.
Negative emotions can reduce our capacity to trust
It is no secret that a bad mood can negatively affect how we treat others.
Study examines how sensitivity to emotions changes across the lifespan
Why do we become more positive as we grow older?
Face it. Our faces don't always reveal our true emotions
When it comes to reading a person's state of mind, visual context -- as in background and action -- is just as important as facial expressions and body language, according to a new study from the University of California, Berkeley.
Surrounded by low achievers -- High on positive emotions?
Study involving the University of Konstanz proves negative impacts of high-achieving environment on school students' individual emotional well-being.
Adults with autism can read complex emotions in others
New research shows for the first time that adults with autism can recognise complex emotions such as regret and relief in others as easily as those without the condition.
Interpreting emotions: A matter of confidence
We are exposed to the facial expressions of the people.
Football coaches between victories, defeats and emotions
Football coaches who have their emotions under control are more successful.
More Emotions News and Emotions Current Events

Top Science Podcasts

We have hand picked the top science podcasts of 2019.
Now Playing: TED Radio Hour

Risk
Why do we revere risk-takers, even when their actions terrify us? Why are some better at taking risks than others? This hour, TED speakers explore the alluring, dangerous, and calculated sides of risk. Guests include professional rock climber Alex Honnold, economist Mariana Mazzucato, psychology researcher Kashfia Rahman, structural engineer and bridge designer Ian Firth, and risk intelligence expert Dylan Evans.
Now Playing: Science for the People

#541 Wayfinding
These days when we want to know where we are or how to get where we want to go, most of us will pull out a smart phone with a built-in GPS and map app. Some of us old timers might still use an old school paper map from time to time. But we didn't always used to lean so heavily on maps and technology, and in some remote places of the world some people still navigate and wayfind their way without the aid of these tools... and in some cases do better without them. This week, host Rachelle Saunders...
Now Playing: Radiolab

Dolly Parton's America: Neon Moss
Today on Radiolab, we're bringing you the fourth episode of Jad's special series, Dolly Parton's America. In this episode, Jad goes back up the mountain to visit Dolly's actual Tennessee mountain home, where she tells stories about her first trips out of the holler. Back on the mountaintop, standing under the rain by the Little Pigeon River, the trip triggers memories of Jad's first visit to his father's childhood home, and opens the gateway to dizzying stories of music and migration. Support Radiolab today at Radiolab.org/donate.