The fear of looking foolish may be one of the fraudster’s most effective protections
The leader of a UK business group was raging about a rating agency effectively extorting higher payments to ‘maintain’ the current consumer feedback score. As I relayed this to my wife - a fearless pragmatist - she said, “Why not just go public, you have email proof?”
Why not? Shame.
Going public and admitting that you (like many others) pay to maintain inflated customer feedback scores would be “embarrassing.” Yes, there are potential legal ramifications under competition law, market conduct (in certain regulated sectors), and potentially even fraud legislation (e.g, ECCTA ). But, in my experience, your average CEO is much more concerned about reputation than regulation.
Nothing to see here
Not coming forward is not new. Two decades ago, a colleague working with a hedge fund duped by a serial fraudster (big, big swindle) paid us to ring around London’s hedge fund community to warn them not to hire the scammer. The hedge fund wanted to be kept anonymous, so as not to become “a laughing stock in the market.” They weren’t paying us as a civic good for the market. They were terrified he’d go to another fund, and the pre-hiring background check would identify them as his erstwhile client.
There are also closed-door (often industry-centric) groups where similar data is shared in confidence. But these tend to be only open to the big organisations (think Fortune or FTSE 100).
For the rest of us, without budget to pay people to do the dirty work, or outside of these rarified rooms, there is no ‘point-of-truth’ about scammers and fraudsters. So, maybe we need to move the conversation from shame to guilt?
Shame vs Guilt
Shame is directed at the self - “I am so ashamed.” Guilt is directed at the act - “I shouldn’t have done it.” In investigative settings, this distinction matters. When in shame-mode, we tend to shut down, go introspective, and can spiral. If we can move someone to guilt-mode - “It was an easy mistake to make… many other people would have done the same” - we tend to be more likely to unburden ourselves of the act.
By not speaking up and sharing about these fraudulent, extortive, and other unsavoury practices, we let shame shut us down. We need a place to shed the guilt and alleviate that weight.
Legislation - including around privacy and security - makes this tricky, but there is hope. I’ve heard of recent initiatives, particularly in sports settings (e.g., at the federation level) where third-party speak-up frameworks provide a safe (and secure) place to unburden.
Would that work?
Would you feel more comfortable approaching a third-party framework about something you might otherwise sit on?
If the answer is “yes”, it needs financing. There are a few ways to do that, including industry associations, but they can be corrupted, and influential players can outmuscle (out-donate) smaller ones. So, and I didn’t think I’d be saying this, I favour partnering with ambulance chasers.
Bear with me. A law firm that gets a cut of successful prosecutions and damages is, in an odd sense, more purely aligned than an industry body that has a vested interest in maintaining that industry’s reputation, influence, and flow of donations.
So, again, would you be happy with that model? If not, what would you suggest?