Episode Notes for Fraud Talk: 'The Problem With Too Many Choices'


Emily Primeaux, CFE
Associate Editor, Fraud Magazine

In January I had the pleasure of interviewing Bret Hood, CFE, about using data analytics in fraud examinations and the problem of “choice paralysis.” Currently the director of 21st Century Learning & Consulting and a retired FBI supervisory special agent, Hood has spoken at ACFE Annual Global Conferences and is a federal court-recognized expert in fraud and money laundering.

Hood recently wrote an article for the January/February 2017 issue of Fraud Magazine about choice paralysis using a grocery store study. In the article and on the podcast, he explained that this study helped highlight that when people are given too many choices, they freeze and can’t make a decision. The same can happen when a fraud examiner approaches an investigation using data analytics.

Data analytics software can produce an endless amount of data — some usable, others distracting. In the podcast, Hood explained that it’s important for fraud examiners to determine which data sets are relevant. “If we’re doing a billing fraud, I should only be concerned with the billing and not something else,” Hood said. “So if I have billing fraud, I don’t necessarily care about accounts payable. It depends on what kind of billing we have, but what happens is when we start to focus on other things, when we start to take the divergent path, that distracts us from what our original purpose is.”

Other highlights from the interview include:

  • Recommendations for how fraud examiners can overcome choice paralysis, including prioritizing three things that are relevant to your case, focusing on those and fighting the urge to move down other paths as they become present.
  • An analysis of how the brain processes information, including a look at your “working memory.”
  • System 1, the reactionary part of your brain, versus system 2, the reasoning part of your brain.

You can listen to Hood’s entire interview at ACFE.com/podcast and join the discussion about the podcast in the ACFE Community.

Helpful Resources Mentioned in This Episode