How to Spot a Fraud—in Others and in Ourselves

A fake German heiress cons New York socialites and investors out of hundreds of thousands of dollars. A self-styled entertainment mastermind invites thousands of rich young people to a luxury island festival, which turns out to feature Styrofoam-boxed sandwiches in disaster relief tents. A so-called son of a diamond mogul tricks Tinder dates into funding expensive trips and designer clothes.

Frauds like these dominated headlines in recent years, and have now returned for a second wave of notoriety on Netflix’s miniseries Inventing Anna and Fyre Festival: The Greatest Party That Never Happened and documentary The Tinder Swindler.

Why exactly are we so fascinated by people who deceive and exploit us? According to social psychologist Sam Sommers, it’s partly because to some extent—whether it’s children playing around with the truth or job seekers embellishing their resumes—we all do it.

“The truth is, the ingredients of our normal, day-to-day social functioning are conducive to going down the path of fraud,” says Sommers, professor and chair of the Department of Psychology. “Deep down, it’s a very human phenomenon that we can all relate to, either because we’ve done it ourselves, or we know people who have.”

Context Matters

In internet comment sections, nice normal people can turn into trolls. On dating apps, otherwise honest people misrepresent their age or appearance. What’s the common thread?

“It feels easier to be less completely upfront online, or to say things we would never say in person, because there’s a layer of protection,” Sommers says. “There are certain contexts in which we feel differently about the need to behave in ethical ways.”

The business world, which is central to the schemes in Inventing Anna and Fyre, is another realm where lying and cheating are prevalent. Sommers points to a study showing that participants primed with thoughts of business are more likely to cheat on a task.

Likewise, studies have shown higher rates of sociopathic traits among CEOs, says Michael VanElzakker, AG15, a lecturer who focuses on abnormal psychology. “If there’s a soft-hearted person who wants to make sure everyone in Haiti has good water and nutrition, and another person who decides to pay a $10 million fine to dump something in a river and save the company $20 million, which one is going to become CEO of a big company?” VanElzakker asks. 

He also highlights the effect of cultural norms, giving the example of feudal Japan, where it wasn’t considered immoral for samurais to test the sharpness of their swords on peasants. “A huge part of the way people behave and what they accept and are willing to do is based on the social milieu,” VanElzakker says.

Big Lies Start Small

Con artists’ careers often begin with a simple lie—to themselves.

It’s a phenomenon many of us know well, Sommers says. For example, if we have a bad habit such as smoking, we might tell ourselves that at least we don’t do cocaine, minimizing what we do. Or maybe that we had a stressful day, so we deserve a cigarette, justifying it.

Cognitive dissonance—the state of knowing we shouldn’t do something but doing it anyway—feels uncomfortable, Sommers explains. We react by trying to resolve the inconsistency, and because our behavior is hard to change, often it’s reality that we bend instead.  

In a similar vein, people who commit frauds might tell themselves that the target of their scam is stupid and deserves to be tricked, or that they’re much more likely to get away with it than they really are.

Many of them even come to believe the lies they tell themselves—but VanElzakker is quick to distinguish self-deception from delusion. “You believe something that’s not true, but not in the same way as someone undergoing a psychotic break.”

We all engage in these mental gymnastics to get through our day, Sommers says. “A degree of self-deception can be an ingredient of healthy mental well-being.”

But lying to ourselves makes it easier to do harmful things again—and to do even worse things next time. “A lot of times we see people doing little things that are unethical here or there, which snowballs and gets to a level that’s more problematic and disturbing,” he says.

Fakery Is Socially Driven 

People claim to be richer, smarter, more successful, or more well-connected than they are not only for money and power, but also for the praise, status, and professional prestige it brings. “Social approval is a strong incentive for people. We are inherently social beings,” Sommers says.

This truth makes fraudulent behavior contagious, as we look to each other for cues about what’s acceptable. “People are much more likely to lie and cheat if they see other people doing the same,” Sommers says. There are examples of this behavior throughout history, even in our country’s highest office, of course—it's hard to forget Richard Nixon's famous line, "I am not a crook."

And by the same principle, if people see others going along with liars and cheaters—particularly friends, experts, and large numbers of people—they are more likely to jump on board, too, a concept called social proof.

“We use other people as an important source of information,” Sommers says. “Often it’s a good strategy, but it can lead you astray if others are falling victim to a scam.” Just think of the Bernie Madoff Ponzi fraud—friends and business acquaintances led their peers into the massive fraud scheme, costing them all millions of dollars.

Our social nature shapes something we tend to think of as purely individual: our sense of self. That’s partly why frauds build such shining images of themselves—if they can make others see them that way, then it becomes who they are, even— and perhaps especially—in their own minds.

“We have our own idea of who we are, what we value, and how we think we should act, but how we see ourselves also depends on feedback from others, and the unspoken comparisons we draw with them,” Sommers says. “We are defined by the people around us.”

Sociopathy Explains Some Harmful Behavior—but Not All of It

The term “sociopath” is often thrown around when it comes to swindlers and frauds, and there’s something to this, according to VanElzakker. Many frauds demonstrate what he called sociopathic traits, such as a willingness to prey on others emotionally and financially, a low regard for social bonds, and a lack of remorse for hurting others.

Also called callous-unemotional personality traits, they stem from a lower-than-average production of certain traits and emotions, which manifest as brain states, he says. “Just like with insulin production in the body, there can be a spectrum where people have too much empathy, or not enough—and too much anxiety, or not enough,” he says. “When people have no anxiety at all, they can pull scams on people, hurt them, do risky things without being bothered.”

Ultimately, debating frauds’ neurochemistry doesn’t help deal with them, according to VanElzakker. “Don’t medicalize selfish greed,” he says. “Most scammers are not suffering from a medical condition or illness. They are just trying to get money.”

It also ignores factors such as situation, environment, and culture, he adds. “The failure of abnormal psychology is that tends to focus on individual responsibility and individual solutions for systemic issues and problems. It doesn’t deal with the big picture of the way society is organized.”

There Are Much Bigger Frauds Out There

Fraud stories like the ones on Netflix capture our imagination partly because they’re outrageous, highly personal, and easy for us to grasp, according to VanElzakker. “It’s simple good guy, bad guy stuff,” he says. “It’s kind of like, wow, I can’t believe the guy’s moxie. And seeing a bunch of rich kids get scammed is funny.”

But these stories pale in comparison to the kind of deception and exploitation that doesn’t go viral, VanElzakker says. For example, in the 1970s, a number of social rights groups accused Nestlé of wrongly pushing mothers in developing countries to use infant formula instead of breastfeeding, which was then linked with health problems in their babies. Although hearings by the U.S. Senate and the World Health Organization led to new restrictions on marketing infant formula, there were no consequences for Nestlé.

“There are massive, world-defining scams that by matter of course, we ignore,” Van Elzakker says. “I think the question one ought to be asking is, why do we like to talk about the small frauds, and not the bigger ones?”

Frauds Show Us How We Can Be Better

Understanding how harmful and manipulative behavior arises can help us curb or prevent it, according to Sommers and VanElzakker.

It’s hard to get through to adults with low empathy and anxiety, but research on childhood intervention has been promising, VanElzakker says. We could do more to identify children with conduct disorder, which is the childhood condition associated with callous-unemotional traits and could lead to pathological behavior later in life, and set them on a better path.

“The hope is that we can teach them empathy, intervene with their parents, and get them into some sort of system or program, to ease them back toward the other end of the spectrum,” he says.

We could also make an effort to foster a culture of transparency and accountability in our businesses and institutions from the top down, says Sommers. “If you get the sense that the leaders are ethical people who follow the rules, that value system might make it harder for you to violate those rules,” he says.

And finally, each of us could be more aware of those little signs of what’s really going on—whether it’s a twinge of discomfort when we do something that’s not quite right, or a nagging sense that a charismatic new acquaintance’s claims aren’t adding up. “If it seems too good to be true,” Sommers says, “it probably is.”