FORMER Republican representative and would-be Senate candidate Bruce F. Caputo did it. Newspaper writers did it. A former top aide to Sen. Edward Kennedy, and expert witness for the EPA, a respected Harvard physician and White House political appointees all did it.

Embellishing credentials, falsifying re'sume's, exaggerating job experience, perpertrating hoaxes and faking news stories and scientific data have increased to near-epidemic proportions. Why the sudden growth in deception?

"Some pychologists will say it's delusions of grandeur based on a weak ego, but there's really a simple answer," says Dr. Jerald Jellison, associate professor of psychology at the University of Southern California. "It pays."

Jellison, a noted authority on the psychology of lying, says a strong incentive (money, promotion, new job, fame) coupled with lack of surveillance (more transient society, large urban areas where anonymity is guaranteed) has led more and more people down the Great Pretender path.

"You get a job you wouldn't have had otherwise," says Jellison. And in times of economic stress, he adds, "it's much more likely you'd find increased incidents of it."

"Dishonesty's been around forever," says Dr. Shervert H. Frazier, Harvard professor of psychiatry and psychiatrist in chief at McLean Hospital in Belmont, Mass. "I don't think it's an epidemic, but it's certainly rampant. I think we're more aware of it now."

One reason for the increased public awareness may be the willingness on the part of institutions and businesses to come clean at the first hint of deception rather than cover-up for their Great Pretender and risk further scandal. Still, others feel that if we're hearing about it more, chances are it's happening more. Blame it on the "Baby Boom," blame it on the lapse in modern morals, the distrust in institutions, the breakdown of the family. Blame it on the press-for-success, emotionally bankrupt survivors of the "Me Decade."

"They tend to want something they don't deserve," says Frazier. "They're willing to lie and cheat to get it. Most people are dishonest because they've been taught to be dishonest. They weren't born that way."

Lying is a learned behavior. As children, we are taught that recognition is directly based on accomplishments. By exaggerating those accomplishments, by covering up our mistakes, the greater the reward. As adults, says Frazier, the motive is "self-aggrandizement" and our fascination with hoaxters is "the natural inclination of human beings to like what is malicious and dirty. When you live in a small town, it's gossip. When you live in a big town, it's fraud."

How many Great Pretenders get away with it?

"An awful lot," says Thomas W. Norton, president of Fidelifacts, a New York firm hired by businesses to investigate the backgrounds of potential employes. Norton estimates that only a fraction of the cases ever comes to light. "Usually, people don't get caught."

Since many personnel departments are not experienced or equipped to investigate job applicants' backgrounds, more and more frequently they are turning to professional fact-checkers. Six years ago, Fidelifacts investigated approximately 7,000 potential employes a year. In the last three years, that figure has jumped to 20,000. Since the notoriety of former Washington Post reporter Janet Cooke, who first falsified her re'sume', then fabricated a story about an 8-year-old heroin addict which later won a Pulitzer Prize, Norton said, business is booming.

Several years ago, during the post-Watergate period, companies that checked on employes' backgrounds were often accused of snooping. "Now it's just common sense," he says.

Megan Maloney, sales director for the Minneapolis-based National Credential Verification Service, says re'sume' fraud is rampant. "There's a ton of it," she says. "It's gotten to the point where you just can't take a re'sume' at face value."

Maloney says 30 percent of the re'sume's they check are false, with some embellishments easier to spot than others. Maloney cites the case of the successful businessman who claimed to have graduated from Princeton in 1957 with a master's in business. "Princeton doesn't even offer a business program," she says. "If you're gonna lie, you might as well check to see they have the program!"

Potential employes lie about academic credentials most often, Maloney says, with a master's in business the degree most often lied about. For the most part, she says, re'sume' fraud is practiced equally by men and women, with the bulk of the offenders in their mid to late twenties.

But middle-age job seekers are not immune.

David J. Wimer, White House personnel director during the Nixon and Ford administrations, says 5 to 10 percent of the re'sume's he handled--including high-level political appointees--contained significant inaccuracies.

"It was mostly degrees they didn't have," says Wimer, partner and general manager of Hay Associates, a Washington consulting firm. "Graduate degrees, degrees from unaccredited diploma mills. We even had one person who said we were wrong after we checked and found he never graduated. He was sure he went to his own graduation. This was at a school he had never gone to!"

The offenders, he says, ranged from the assistant secretary level all the way to would-be ambassadors. "A couple of people are quite well known," says Wimer. "They either got their act in order or were not appointed."

"We all have a tendency to enhance our accomplishments as they grow," says Wimer. "An adviser becomes a key adviser. The key adviser becomes the sole confidant. On the academic side, graduate degrees have become such a union card for almost anything. People who have not got it are embarrassed."

"It's white-collar people," says Megan Maloney. "They're expected to have these degrees. Out of 9.6 million unemployed, there are 2.5 million white-collar workers. For 1981 and 1982, there will be 1.3 million more degrees granted, bachelor's, master's and doctorates. That's a lot to pool into the job market."

Competition among doctors and scientists for grant money may be one factor behind the increased incidents of research fraud in the medical profession.

"It is a significant factor," says Dr. William F. Raub, associate director for grants and contracts at the National Institutes of Health. "Ten years ago, we might have heard of one research fraud in a year. These days, it's two or three or four."

Raub isn't willing to say there has been a marked increase in these incidents, only that "there is a greater willingness to talk about it and deal with it."

Raub says that today, only 30 percent of the applicants win NIH grants, compared with 70 percent in the 1950s. Given that competition, and the scientist's natural inclination to advance his or her own career, it is not surprising that NIH is currently investigating four research fraud incidents from 1981 alone.

Arnold & Porter, a prestigious Washington law firm, is investigating three incidents of re'sume' fraud in 1981 compared with none the year before. Still smarting from a 1978 incident in which a woman associate with no undergraduate degree passed herself off for one year as a graduate of a prestigious law school, Arnold & Porter now asks for transcripts of its applicants. But that didn't stop one student who puffed up his re'sume' by saying he had won a prestigious public speaking prize when he only received honorable mention. He was found out only after the real winner of the prize happened to see the re'sume'. The other two incidents, according to one laywer on Arnold & Porter's reviewing committee, involved a student misstating his job experience and another falsifying his grades.

"It bothers me," the lawyer says. "It's just one more symptom of the reverse of the '60s--students will do anything to get ahead."

Steve Davis, recruiting and information officer at the Office of Personnel Management, says the U.S. government is protected against run-of-the-mill re'sume' fraud because potential employes are warned on their employment form that any falsehood is punishable by a $5,000 fine or imprisonment. "It makes them think twice," says Davis, who added that the real responsibility for checking backgrounds belongs to the different government agencies. Many agencies use the Federal Bureau of Investigation to do background checks.

But even the FBI isn't immune. In one recent case, a young man applied to the bureau for a job as an agent. On his re'sume' he stated he was a former Green Beret who had been decorated for bravery. Attached to the re'sume' was a full color photograph of the man in uniform, dripping with medals. When the FBI checked out his background, they found he had never been in the Green Berets, let alone decorated for bravery.

Dr. Jerald Jellison speaks of the "magnitude of consequences" to differentiate between harmless hoaxes and ones that have drastic side effects.

Then there are the hoaxes which would seem, on the surface, to have disastarous consequences but do not. Take the case of Phil Murray, a 34-year-old former Eastman Kodak lab technician who posed as a family doctor in Fillmore, N.Y., treating more than 500 people for six months before his masquerade was exposed. Indicted on three counts of unauthorized practice of medicine and six counts of unlawful prescribing of a controlled substance, Murray faces up to four years in prison if convicted. The townspeople, however, said they liked "Doc" Murray. He was a dedicated doctor, they said, who did more good than harm. He even made house calls.

There are the Great Pretenders who elicit more sympathy than disdain. Like the 64-year-old World War II veteran in New Jersey who impersonated a brigadier general last year at a Rotary Club dinner. He said he did it to impress his son.

Once confronted, the professionals say, most offenders will confess to the masquerade. But not all. Megan Maloney tells the story of the young man in Texas who applied for a job, saying he had a degree from Arkansas State University. Maloney checked it out and found he had attended only three semesters. The young man said it must have been a mistake. That afternoon, Maloney received a phone call from someone claiming to be the registrar at the university who said the young man's files were being microfilmed and that he actually had graduated. Maloney called back to verify, only to find that the "registrar" had never called, and the files were not being microfilmed.

"Some people will go to any length," she says. "It just goes on forever."

There are myriad excuses. "It's an attempt to avoid blame by focusing on outside influences," says Jellison.

Janet Cooke cited the pressures of The Washington Post newsroom, the competition, the need to be the "flashiest." Christopher Jones, the 24-year-old stringer for The New York Times Magazine who fabricated an article on Cambodia published last December, was quoted as saying, "It was a gamble--that was it. I wanted to do the job, but I couldn't."

Richard Burke, the 27-year-old top aide to Sen. Edward Kennedy (D-Mass.) who last year said he had been the victim of numerous death threats, a shooting and a break-in, and then resigned from his job three weeks later after admitting that the whole thing had been a hoax, says now, "It was the only way I could get out of the office."

Bruce Caputo, who was running for the Senate against incumbent Daniel Patrick Moynihan (D-N.Y.), announced last week that he was withdrawing from the race after reports surfaced that Caputo had exaggerated his academic and military career. A spokesman from his office said Caputo declined to be interviewed.

Dr. John C. Long, a Harvard physician who made medical history several years ago when he announced that he was able to grow Hodgkins disease cells in a culture dish, resigned recently, saying the cells were not cancer cells, but those of owl monkeys. Long cited the competition for grants as one reason he fabricated the scientific data.

David B. Twedell, a 28-year-old private consultant in Virginia, claimed to have a PhD in geology when he supervised test drilling at Love Canal. He subsequently appeared as an expert witness for the government. When his credentials were checked, it turned out he had a BA in science. Twedell has never commented on the charges.

Still, there are compelling reasons for fudging a background. A young man recently applied for a job as the personal chauffeur to a corporate president in New York. On his re'sume', he stated he had been self-employed for the last seven years, doing "craftwork." When the company checked the young man's background, they found he indeed had worked with his hands for the last seven years: making license plates behind prison bars.