Pain of rejection makes us more likely to commit fraud

By Frontiers


by Abigail Pattenden,

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

Many of us might not be 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.


2 Comments on Pain of rejection makes us more likely to commit fraud

  1. I read this article with great interest. As Director of a ministry that serves individuals and families with white-collar incarceration issues, I can attest that many people we work with commit fraud because of a fear of rejection. That is, they know or intuit that they are at the tipping point, about to go over the line. What they lack is the ability to solve their dilemma elegantly, and approach their spouses and fess up that things are not going as they hoped and planned. They fear their spouses’ rejection when faced with the prospect of, for example, adopting a less stressful lifestyle, having less money, selling the big house, taking their children out of private school. So instead they create a fantasy that everything will be alright even though they know it won’t. They dispel the potential consequences but are soon tortured, looking over their shoulders and living double lives until, no longer able to withstand the pain, they engage in self-sabotage abd manufacture their own demise.

    Rev. Jeff Grant, JD, M Div
    Minister/Director I Progressive Prison Ministries, Inc. I Greenwich CT & Nationwide

  2. It seems to me that Jeff Grant’s observations hit the bullseye.

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