The Portland Digit Recognition Test (PDRT), a forced-choice measure of recognition memory designed for the purpose of assessing the possibility of malingering, was administered to two groups of clinically referred patients seeking financial compensation for injuries including a mild head trauma group and a brain dysfunction group and also to a third group with brain dysfunction not seeking compensation. The three groups were equated on verbal acquisition ability. The two groups seeking remuneration were impaired on the PDRT compared with the group not seeking compensation, and the brain dysfunction group seeking compensation was superior to the mild head trauma group. Cut-off scores were established for the group with brain dysfunction not seeking compensation, and 33% of the mild head trauma group and 18% of the brain dysfunction group seeking compensation fell below the cut-offs. Significantly below chance scores were found in 17% and 3% of the two groups seeking compensation, respectively. Difficult PDRT items were more sensitive than easy items to compensation-related deficit. The PDRT is recommended as a measure of exaggeration of memory deficits.