The Curse of Desperation

Motive. Means. Opportunity.

Anyone who has ever watched a murder detective series on TV will instantly recognise the significance of those three words. They’re the key determinants to rule suspects in or out when it comes to discovering “whodunnit.”

Motive is the “why” – the reason someone commits murder. Means refers to the ability or resources a person has to enable them to commit it, while opportunity is the “where and when”.

Find a suspect with all three in alignment and you’re likely looking at your killer.

Somewhat surprisingly, the path an employee takes on their journey to committing a financial crime is not all that dissimilar.

In the 1970s, criminologist Donald R. Cressey published a model called the “fraud triangle.” The term refers to the three conditions that, when all are present together, significantly increase the likelihood of an employee committing a financial crime (occupational fraud).

These conditions are:

Motivation – do they have a reason for committing fraud?
Opportunity – do they have the chance to do so without getting caught?
Rationalisation – can they justify their behaviour, even if it’s only to themselves?

When you can answer “yes” to all three questions about one of your employees, you’re looking at someone with a high likelihood of committing a financial crime.

According to a 2024 report by the Association of Certified Fraud Examiners, occupational fraud is likely the largest and most costly form of financial fraud in the world. Estimates of the resultant costs to companies run into the trillions of Dollars every year.

Perhaps even more worrying, though, is that the same report states that over 84% of employees who commit fraud had no previous record of any criminal activity.

My biggest concern with that statistic is that it makes financial crimes notoriously difficult to predict – and those who commit them equally tricky to identify ahead of time.

This is largely because it’s situations and circumstances, not personality traits, that lead to people committing fraud.

Recent theories suggest that people are more willing to steal if they are on the wrong side of what’s known as the “desperation threshold” or the level of resources critical to wellbeing.

When people fall below this threshold, they have little left to lose and are thus less sensitive to the consequences of any criminal action.

A report from the National Association of State Auditors, Comptrollers and Treasurers in the US supports this, revealing that most people can be incentivised to commit fraud if the circumstances are right.

This is known as the 10-80-10 rule, which states:

10% of people would never commit fraud under any circumstances or for any reason.
10% are always on the lookout for opportunities to commit fraud.
80% fall somewhere in between.

Basically, this means that eight out of every 10 people aren’t what you’d call natural fraudsters, and yet neither are they completely immune to never committing a financial crime.

This doesn’t necessarily make them bad people. Sometimes, they’re just desperate.

Imagine, for example, your work colleague (who has an exemplary, 15-year career with the company) reveals their child has been diagnosed with a serious illness. There are treatments available, but they are prohibitively expensive and not covered by medical insurance.

Although your colleague has never before committed any kind of crime, and has always acted with the utmost integrity, their child’s life is at stake.

How long do you think they would they hesitate before crossing the line?

How desperate would their situation have to be before they’d consider the risks were worth taking?

I’m probably showing my age here, but there’s a telling, if controversial scene in the film Indecent Proposal, in which billionaire John Gage (Robert Redford) offers a down-on-his-luck husband (Woody Harrelson) $1m for the opportunity to spend the night with the man’s wife (Demi Moore).

Initially, they turn him down, offended at his suggestion. But the proposal clearly fascinates them. They could really use the money, and it would just be one night…

Eventually, they decide to accept his offer.

“We can make a big deal out of this, walk away and feel principled, or we can look at it as a simple business transaction and get rich,” Moore’s character says.

Motivation, opportunity, rationalisation.

That’s all it takes for good people to do bad things.

Of course, I realise that “good” and “bad” are subjective viewpoints, and there are many different ways to rationalise unethical behaviour.

In my experience, however, these are the main drivers:

Survival – feeling unable to feed your family, afford life-saving medical treatment, or pay your bond/rent
Sudden change in circumstance – losing your job, getting divorced
Peer pressure – feeling the need to keep up with colleagues or “everyone does it.”
A sense of being wronged – being refused a raise or passed over for promotion.
Lack of supervision – employees feel they “can get away with it.”
Lack of robust internal controls – no approval controls or regular internal audits.
Resentment – our clients are making so much money; they won’t miss a “bit off the top.”

These are all very human, and in some cases, understandable lines of thinking. That doesn’t, of course, make them right.

The problem is, it’s not a phenomenon that’s going away any time soon. In fact, it’s getting worse. Research suggests that attitudes towards so-called “deviant acts” such as financial crime, have changed in the past decade or so.

Figures show that while globally, the levels of more “traditional crimes” such as violence against individuals and burglary have fallen steadily over the past 30 years, the emergence of the digital era has corresponded to a rise in online crime.

In 2023, fraud and computer misuse accounted for nearly half of the 8.5 million crimes experienced by adults in the UK. Attitudes have also shifted, with significantly more people feeling crimes such as bribery and benefit fraud are justifiable than was the case a decade or so ago.

Professor Mark Button, Director of the Centre for Cybercrime and Economic Crime at the University of Portsmouth, says, “The decline in honesty amongst the younger generation could be explained by a growing attitude that online fraud is a victimless crime, because the offender can’t physically see a victim.”

South Africa has not escaped this trend.

Recent statistics from the Southern African Fraud Prevention Service (SAFPS) revealed a 32% increase in the number of reported incidents from 2023 to 2024.

Manie van Schalkwyk, Executive director of the SAFPS, says, “Banking fraud made up 45% of the fraud incidents reported last year. This was followed by the Micro Finance Sector (19%) and the Clothing Retail Sector (14%).”

Clearly something needs to be done to stem this unwanted tide before it becomes a tsunami.

So, as an employer, how can you fight employee desperation before it gives way to crime?

One of the most effective solutions is to introduce a financial wellness programme. Financial concerns are the biggest cause of workplace stress, so in addition to heading off at the pass any potential forays into crime, these programmes benefit your employees – and thus your company – by providing the right support when they need it most.

South Africans are under increasing amounts of pressure from all sides. People on the brink of committing a financial crime need help now, rather than punishment later.

We’d love to hear your experience with this issue. Have some of your employees succumbed to temptation through desperation? Let’s share our stories so we can help each other, and the people in our organisations who are wrestling with this desperate dilemma.