Fraud

Business, Legal & Accounting Glossary

Definition: Fraud


Quick Summary of Fraud


intentional deception resulting in injury to another person. Fraud includes lies and half-truths, such as selling a lemon and claiming “she runs like a dream.”




What is the dictionary definition of Fraud?

Dictionary Definition


Wrongful or criminal deception intended to result in financial or personal gain.

n. the intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right. A party who has lost something due to fraud is entitled to file a lawsuit for damages against the party acting fraudulently, and the damages may include punitive damages as a punishment or public example due to the malicious nature of the fraud. Quite often there are several persons involved in a scheme to commit fraud and each and all may be liable for the total damages. Inherent in fraud is an unjust advantage over another which injures that person or entity. It includes failing to point out a known mistake in a contract or other writing (such as a deed), or not revealing a fact which he/she has a duty to communicate, such as a survey which shows there are only 10 acres of land being purchased and not 20 as originally understood. Constructive fraud can be proved by a showing of breach of legal duty (like using the trust funds held for another in an investment in one’s own business) without direct proof of fraud or fraudulent intent. Extrinsic fraud occurs when deceit is employed to keep someone from exercising a right, such as a fair trial, by hiding evidence or misleading the opposing party in a lawsuit. Since fraud is intended to employ dishonesty to deprive another of money, property or a right, it can also be a crime for which the fraudulent person(s) can be charged, tried and convicted. Borderline overreaching or taking advantage of another’s naivety involving smaller amounts is often overlooked by law enforcement, which suggests the victim seek a “civil remedy” (i.e., sue). However, increasingly fraud, which has victimized a large segment of the public (even in individually small amounts), has become the target of consumer fraud divisions in the offices of district attorneys and attorneys general.

  1. (law) The crime of stealing or otherwise illegally obtaining money by use of deception tactics.
  2. Any act of deception carried out for the purpose of unfair, undeserved and/or unlawful gain.
  3. The assumption of a false identity to such deceptive end.
  4. A person who performs any such trick.
  5. A trap or snare.
  6. To defraud

Full Definition of Fraud


Fraud is the intentional deception by one person committed against another person which creates a misrepresentation.

There also must be some type of loss, generally monetary.

There are many types of fraud, but fraudulent activities can usually be grouped into three basic categories: government, employee, and consumer.

Under the common laws of the United States fraud includes the following:

  1. There is a representation of fact.
  2. The statement or representation is untrue.
  3. The statement must be important or relevant.
  4. The speaker must realize the statement is not true.
  5. The speaker must intend for the statement to be relied on.
  6. The hearer does not realize the statement is not true.
  7. The hearer relies on the information to make a decision.
  8. The hearer does not have a reason to believe the statement was not true.
  9. The hearer has suffered loss or damage.

A common type of fraud is identity theft. In this case, it is not necessarily illegal to lie to someone about your name, but if your steal another person’s identity and you cause financial loss to that person due to your lies, then this is considered fraud. Fraud can be considered a criminal offence or a civil offence. If you sue someone for fraud you may win your case even if they are not criminally prosecuted.


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/fraud/
Modern Language Association (MLA):
Fraud. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 27, 2021 https://payrollheaven.com/define/fraud/.
Chicago Manual of Style (CMS):
Fraud. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/fraud/ (accessed: September 27, 2021).
American Psychological Association (APA):
Fraud. PayrollHeaven.com. Retrieved September 27, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/fraud/

Definition Sources


Definitions for Fraud are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 28th April, 2020 | 1 Views.