Situational deterrence and claim padding: results from a randomized field experiment

While it is generally argued that threats of legal sanctions are more effective with offenders involved in economic crimes than with delinquents committing more conventional crimes, such an affirmation rests on weak empirical evidence. Also, most studies supporting this proposition were conducted with non-experimental designs, thus, undermining the interval validity of the results. On the other hand, studies base their predictions on individual factors and do not incorporate contextual factors. To overcome those limitations, a randomized field experiment was implemented in four insurance companies to incorporate contextual factors into the dynamics of deterrence. This study assessed the effect of a written threat (a deterrent letter reminding insured persons of the punishment for insurance fraud) on claim padding behaviours of insured persons filing claims for residential theft. A deterrent-letter project was implemented in four insurance companies, with claims randomly assigned to the experimental or the control group. Cases belonging to the control group were managed as usual, while individuals in the experimental group received the written threat. The experimental design made sure that the deterrent stimulus was exactly delivered to the insured persons when they had the opportunity to exaggerate the value of their claims. Findings demonstrate that claimants in the experimental group were less likely to pad their claims than were those in the control group. The letter was effective, regardless of the means of delivery. In conclusion, the administration of a written threat at the moment of criminal opportunity appears to be an effective strategy for preventing economic crimes.

Jean-Luc BacherEmail:

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Etienne Blais   graduated in 2005 at the University of Montreal, where he obtained a Ph.D. in criminology. He is an assistant professor at the School of Criminology and a researcher at the International Centre for Comparative Criminology, both located at the University of Montreal. He is also a researcher at the National Institute of Public Health of Quebec. His research interests include road safety, crime and injury prevention, insurance fraud and research methods in criminology. Jean-Luc Bacher   graduated in Law at Fribourg University, Switzerland, is Professor of Criminology at the école de criminologie, University of Montreal and researcher at the Centre international de criminologie comparée (CICC) in Montreal. His research interests include white-collar crime, economic crimes, sentencing and deterrence. He is currently working as a magistrate at the Tribunal pénal féderal of Bellinzona, Switzerland, and his recent research has been focused on the Canadian apparatus against money laundering.