In the broadest sense, a fraud is an intentional deception Deception, beguilement, deceit, bluff, mystification, and subterfuge are acts to propagate beliefs that are not true, or not the whole truth . Deception can involve dissimulation, propaganda, sleight of hand. It can employ distraction, camouflage or concealment. There is also self-deception made for personal gain or to damage another individual; the related adjective is fraudulent.
The specific legal definition varies by legal jurisdiction. Fraud is a crime Crime is the breach of rules or laws for which some governing authority can ultimately prescribe a conviction. Individual human societies may each define crime and crimes differently. While every crime violates the law, not every violation of the law counts as a crime; for example: breaches of contract and of other civil law may rank as ", and also a civil law Civil law, as opposed to criminal law, is the branch of law dealing with disputes between individuals and/or organizations, in which compensation may be awarded to the victim. For instance, if a car crash victim claims damages against the driver for loss or injury sustained in an accident, this will be a civil law case violation. Defrauding people or entities of money Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science Scientific misconduct is the violation of the standard codes of scholarly conduct and ethical behavior in professional scientific research. A Lancet review on Handling of Scientific Misconduct in Scandinavian countries provides the following sample definitions: , to gain prestige rather than immediate monetary gain.
A hoax A hoax is a deliberate attempt to deceive or trick people into believing or accepting something which the hoaxer knows is false also involves deception, but without the intention of gain, or of damaging or depriving the victim; the intention is often humorous.
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Types of fraudulent acts
Fraud can be committed through many media, including mail Mail fraud is an offence under US federal law, which refers to any scheme which attempts to unlawfully obtain money or valuables in which the postal system is used at any point in the commission of a criminal offense. Mail fraud is covered by Title 18 of the United States Code, Chapter 63. As in the case of wire fraud, this statute is often used, wire Wire fraud, in the United States Code, is any criminally fraudulent activity that has been determined to have involved electronic communications of any kind, at any phase of the event. The involvement of electronic communications adds to the severity of the penalty, so that it is greater than the penalty for fraud that is otherwise identical, phone Whether in the form of the consumer attempting to defraud the telephone company, the telephone company attempting to defraud the consumer, or a third party attempting to defraud either of them, fraud has been a part of the telephone system almost from the beginning, and the Internet The Internet is a global system of interconnected computer networks that use the standard Internet Protocol Suite to serve billions of users worldwide. It is a network of networks that consists of millions of private, public, academic, business, and government networks of local to global scope that are linked by a broad array of electronic and (computer crime Computer crime refers to any crime that involves a computer and a network, where the computers may or may not have played an instrumental part in the commission of the crime . Netcrime refers, more precisely, to criminal exploitation of the Internet . Issues surrounding this type of crime have become high-profile, particularly those surrounding and Internet fraud Internet fraud refers to the use of Internet services to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to others connected with the scheme). The international dimensions of the web and ease with which users can hide their location, the difficulty of checking identity and legitimacy online, and the simplicity with which crackers can divert browsers to dishonest sites and steal credit card A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer from which the user can borrow money for payment to a merchant or as a cash advance to the details have all contributed to the very rapid growth of Internet fraud.
Types of criminal fraud include:
- bait and switch In retail sales, a bait and switch is a form of fraud in which the party putting forth the fraud lures in customers by advertising a product or service at an unprofitably low price, then reveals to potential customers that the advertised good is not available but that a substitute is. This use of this term has extended to similar situations
- bankruptcy fraud Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a business or corporate debtor in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by
- benefit fraud Benefit fraud is a form of welfare fraud as found within the system of government benefits paid to individuals by the UK welfare state, committing fraud to get government benefits
- counterfeiting A counterfeit is an imitation, usually one that is made with the intent of fraudulently passing it off as genuine. Counterfeit products are often produced with the intent to take advantage of the established worth of the imitated product. The word counterfeit frequently describes both the forgeries of currency and documents, as well as the of currency, documents or valuable goods
- charlatanism A charlatan is a person practising quackery or some similar confidence trick in order to obtain money, fame or other advantages via some form of pretence or deception
- confidence tricks A confidence trick or confidence game is an attempt to defraud a person or group by gaining their confidence. The victim is known as the mark, the trickster is called a confidence man, con man, confidence trickster, or con artist, and any accomplices are known as shills. Confidence men or women exploit human characteristics such as greed and such as the 419 fraud An advance-fee fraud is a confidence trick in which the target is persuaded to advance sums of money in the hope of realizing a significantly larger gain. Among the variations on this type of scam, are the Nigerian Letter , the Spanish Prisoner, the black money scam as well as Russian/Ukrainian scam (also widespread, though far less popular than and Spanish Prisoner The Spanish Prisoner is a confidence trick dating back to the late 1800s. In its original form, the confidence man tells his victim (the mark) that he is in correspondence with a wealthy person of high estate who has been imprisoned in Spain under a false identity. The alleged prisoner cannot reveal his identity without serious repercussions, and
- creation of false companies or "long firms A long firm is a trading company set up for fraudulent purposes; the basic operation is to run the company as an apparently legitimate business, gradually extending the amount of cash advances from customers at the same time as increasing the amount of credit from suppliers; when the pot is large enough, the perpetrators decamp with customers'"
- embezzlement Embezzlement is a kind of financial fraud. For instance, a clerk or cashier handling large sums of money could embezzle cash from his or her employer, a lawyer could embezzle funds from clients' trust accounts, a financial advisor could embezzle funds from investors, or a spouse could embezzle funds from his or her partner. Embezzlement may range, taking money which one has been entrusted with on behalf of another party
- false advertising False advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. Truth in labeling refers
- false billing False billing is a fraudulent act of invoicing or otherwise requesting funds from an individual or firm without showing obligation to pay. Such notices are often sent to owners of domain names, purporting to be legitimate renewal notices, although not originating from the owner's own registrar
- false insurance claims Fraud can be committed by both a member and a provider. Member fraud consists of ineligible members and/or dependents, alterations on enrollment forms, concealing pre-existing conditions, failure to report other coverage, prescription drug fraud, and failure to disclose claims that were a result of a work related injury. Provider fraud consists of
- forgery Forgery is the process of making, adapting, or imitating objects, statistics, or documents , with the intent to deceive. The similar crime of fraud is the crime of deceiving another, including through the use of objects obtained through forgery. Copies, studio replicas, and reproductions are not considered forgeries, though they may later become of documents or signatures,
- fraud upon the court
- health fraud Quackery is a derogatory term used to describe the promotion of unproven or fraudulent medical practices. Random House Dictionary describes a "quack" as a "fraudulent or ignorant pretender to medical skill" or "a person who pretends, professionally or publicly, to have skill, knowledge, or qualifications he or she does not, for example selling of products known not to be effective, such as quack Quackery is a derogatory term used to describe the promotion of unproven or fraudulent medical practices. Random House Dictionary describes a "quack" as a "fraudulent or ignorant pretender to medical skill" or "a person who pretends, professionally or publicly, to have skill, knowledge, or qualifications he or she does not medicines,
- identity theft Identity theft is a form of fraud in which someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name. The victim of identity theft can suffer adverse consequences if he or she is held accountable for the perpetrator's actions
- investment frauds Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws, such as Ponzi schemes A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either and Pyramid schemes A pyramid scheme is a non-sustainable business model that involves promising participants payment primarily for enrolling other people into the scheme, rather than from any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud
- Moving scam The moving industry in the United States was deregulated with the Household Goods Transportation Act of 1980. This act allowed interstate movers to issue binding or fixed estimates for the first time. Doing so opened the door to hundreds of new moving companies to enter the industry. This forced a increasesd competition and soon movers were no
- religious fraud
- marriage fraud A sham marriage is a union motivated not so much by love but instead by a desire for political advantage or personal convenience. Examples of the former include many royal marriages, one of the most famous being the marriage between Henry II and Eleanor of Aquitaine in the 12th Century.[citation needed] to obtain immigration rights without entitlement
- rigged gambling games such as the shell game The shell game is portrayed as a gambling game, but in reality, when a wager for money is made, it is a confidence trick used to perpetrate fraud. In confidence trick slang, this famous swindle is referred to as a short-con because it is quick and easy to pull off
- securities frauds Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws such as pump and dump "Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose
- tax fraud Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. By contrast, tax evasion is the general term for efforts to not pay taxes by illegal means. The term tax mitigation is a synonym for tax avoidance. Its original use was by tax advisors as an, not reporting revenue or illegally avoiding taxes. In some countries, tax fraud is also prosecuted under false billing or tax forgery[1]
Elements of fraud
Common law fraud has nine elements:[2][3]
- a representation of an existing fact;
- its materiality;
- its falsity;
- the speaker's knowledge of its falsity;
- the speaker's intent that it shall be acted upon by the plaintiff;
- plaintiff's ignorance of its falsity;
- plaintiff's reliance on the truth of the representation;
- plaintiff's right to rely upon it; and
- consequent damages suffered by plaintiff.
Most jurisdictions in the United States require that each element be pled with particularity and be proved with clear, cogent, and convincing evidence (very probable evidence) to establish a claim of fraud. The measure of damages in fraud cases is to be computed by the "benefit of bargain" rule, which is the difference between the value of the property had it been as represented, and its actual value. Special damages may be allowed if shown proximately caused by defendant's fraud and the damage amounts are proved with specificity.
National Fraud Authority
The National Fraud Authority (NFA) is the government agency co-ordinating the counter-fraud response in the UK. The NFA works with a wide range of partners with the aim of making fraud more difficult to commit in the UK. The NFA was established following the government's 2006 Fraud Review. It concluded that fraud is a significantly under-reported crime, and while various agencies and organisations were attempting to tackle the issue, greater co-operation was needed to achieve a real impact in the public sector. The scale of the problem pointed to the need for a small but high-powered body to bring together the numerous counter-fraud initiatives that existed, which is when the NFA was formed.
The NFA works to tackle frauds across the spectrum, but also works on fraud types and fraud issues that are a notable problem. These include identity fraud, mortgage fraud, accommodation addresses, mass marketing fraud and fraud affecting small and medium sized businesses. The NFA also produces the Annual Fraud Indicator, which estimates the cost of fraud. The current estimate puts the cost of fraud to the UK at £30 billion a year, which equates to £621 a year for every adult in England and Wales. Working with the charity, Victim Support, the NFA has also done some significant work with victims, to ensure they receive the support they deserve if they have been a victim of the crime.
The NFA also runs Action Fraud - the UK's National Fraud Reporting Centre.
Action Fraud
Action Fraud is the UK's national fraud reporting service, run by the National Fraud Authority. Action Fraud is the place to go to get information and advice about fraud, as well as to report fraud. UK citizens can report fraud online or by calling 0300 123 2040. When a fraud is reported to Action Fraud, victims are given a crime reference number and their case is passed on to the National Fraud Intelligence Bureau (NFIB), which is run by the City of London's police service.
The Action Fraud website also has an A-Z of fraud describing different types of fraud, and offers prevention advice.
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is only hitting the eye of the hurricane Just take a look at how many loan modifications go back into default OCC and OTS Mortgage Metrics Report Fourth Quarter 2008 Now why is the re default rate so high Well think of it
