Fraud (also called defrauding or scamming) is a crime in which one person deceives another to obtain an unfair or unlawful advantage, most commonly financial. The deception can be direct, such as taking money, or indirect, such as gaining access to assets or confidential information that is turned into money.
Terms
The person who carries out a fraud is often called a fraudster. The adjective fraudulent describes actions that are dishonest or intended to deceive — for example, a fraudulent cheque. To defraud someone means to commit a fraud against them.
How fraud is carried out
Modern frauds commonly begin with contact by phone, e-mail or a website, and rely on social engineering to encourage the victim to reveal information or transfer money. Scammers may advertise a free or low-cost offer and then request personal details such as a home address or bank account numbers. Rather than delivering the promised goods or services, the fraudster uses the information to steal money or commit identity theft. Older adults are frequently targeted because they may be more trusting or less familiar with newer technologies.
Legal consequences
Fraud can be treated as a criminal offence. Where proved in criminal court, it can result in fines and imprisonment. It is also a civil wrong: victims can bring civil claims to recover losses, obtain compensation, or secure injunctions against further wrongdoing.
Laws and procedures vary between different jurisdictions. In England, for example, an Act of Parliament sets out specific offences. The legislation commonly used identifies three principal types of fraud:
- fraud by false representation,
- fraud by failing to disclose information, and
- fraud by abuse of position.
Less serious matters are usually handled in a Magistrates' Court; more serious criminal frauds are tried on indictment in the Crown Court before a jury. Civil fraud disputes are often decided in higher civil courts.