Fraud

{{short description|Intentional deception made for personal gain or to damage another individual}}
{{Other uses}}
{{Use dmy dates|date=March 2022}}
{{Criminal law}}
{{Tort law}}
[[File:NS skimapparaat.jpg|thumb|right|200px|A fake [[automated teller]] slot used to commit bank fraud upon bank patrons]]
In [[law]], '''fraud''' is [[intent (law)|intentional]] [[deception]] to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate [[Civil law (common law)|civil law]] (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or [[criminal law]] (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong.<ref>{{cite web |url=http://dictionary.law.com/default.aspx?selected=785 |title=Legal Dictionary: fraud |publisher=Law.com |access-date=27 January 2016 |archive-date=25 December 2018 |archive-url=https://web.archive.org/web/20181225121258/http://dictionary.law.com/default.aspx?selected=785%20 |url-status=live }}</ref> The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or [[mortgage fraud]], where the perpetrator may attempt to qualify for a mortgage by way of false statements.<ref>{{cite web |url=http://www.journalofaccountancy.com/Issues/2004/Oct/BasicLegalConcepts.htm |title=Basic Legal Concepts |publisher=Journal of Accountancy |date=October 2004 |access-date=18 December 2013 |archive-date=25 December 2018 |archive-url=https://web.archive.org/web/20181225121259/https://www.journalofaccountancy.com/Issues/2004/Oct/BasicLegalConcepts.htm%20 |url-status=live }}</ref>

== Terminology ==

Fraud can be defined as either a civil wrong or a criminal act. For civil fraud, a government agency or person or entity harmed by fraud may bring litigation to stop the fraud, seek monetary damages, or both. For criminal fraud, a person may be prosecuted for the fraud and potentially face fines, incarceration, or both.

=== Civil law ===
In common law jurisdictions, as a civil wrong, fraud is a [[tort]]. While the precise definitions and requirements of proof vary among jurisdictions, the requisite elements of fraud as a tort generally are the intentional misrepresentation or concealment of an important fact upon which the victim is meant to rely, and in fact does rely, to the harm of the victim.<ref>{{cite web |url=http://www.justia.com/trials-litigation/docs/caci/1900/1900.html |title=California Civil Jury Instructions: 1900. Intentional Misrepresentation |publisher=Judicial Council of California |access-date=27 December 2013 |archive-date=28 December 2013 |archive-url=https://web.archive.org/web/20131228102855/http://www.justia.com/trials-litigation/docs/caci/1900/1900.html |url-status=live }}</ref> Proving fraud in a court of law is often said to be difficult as the intention to defraud is the key element in question.<ref>{{Cite web|title=The Difficulty of Proving Financial Crimes|url=https://dealbook.nytimes.com/2010/12/13/the-difficulty-of-proving-financial-crimes/|last=Henning|first=Peter J.|date=13 December 2020|website=DealBook|language=en|access-date=23 May 2020|archive-date=1 August 2020|archive-url=https://web.archive.org/web/20200801155236/https://dealbook.nytimes.com/2010/12/13/the-difficulty-of-proving-financial-crimes/|url-status=live}}</ref> As such, proving fraud comes with a "greater evidentiary burden than other civil claims". This difficulty is exacerbated by the fact that some jurisdictions require the victim to prove fraud by [[clear and convincing evidence]].<ref>{{Cite web|title=Fraud Litigation in Pennsylvania|url=https://www.stradley.com/-/media/files/resourceslanding/publications/1993/03/fraud-litigation-in-pennsylvania/files/prk-fraud/fileattachment/prk-fraud.pdf|last=Long, Cameron|first=Louis C., Robert W.|date=1993|website=Stradley|access-date=23 May 2020|archive-date=31 July 2020|archive-url=https://web.archive.org/web/20200731211726/https://www.stradley.com/-/media/files/resourceslanding/publications/1993/03/fraud-litigation-in-pennsylvania/files/prk-fraud/fileattachment/prk-fraud.pdf|url-status=live}}</ref>

The remedies for fraud may include [[Rescission (contract law)|rescission]] (i.e., reversal) of a fraudulently obtained agreement or transaction, the recovery of a monetary award to compensate for the harm caused, [[punitive damages]] to punish or deter the misconduct, and possibly others.<ref>{{Cite web|title=The Equitable Remedy of Rescission: A Tool to Defeat Fraud - Insurance Law - Insurance Law - LexisNexis® Legal Newsroom|url=https://www.lexisnexis.com/legalnewsroom/insurance/b/insurancelaw/posts/the-equitable-remedy-of-rescission-a-tool-to-defeat-fraud|website=www.lexisnexis.com|language=en|access-date=23 May 2020|archive-date=1 August 2020|archive-url=https://web.archive.org/web/20200801020015/https://www.lexisnexis.com/legalnewsroom/insurance/b/insurancelaw/posts/the-equitable-remedy-of-rescission-a-tool-to-defeat-fraud|url-status=live}}</ref>

In cases of a fraudulently induced contract, fraud may serve as a [[Defense (legal)|defense]] in a [[civil action]] for [[breach of contract]] or [[specific performance]] of [[contract]]. Similarly, fraud may serve as a basis for a court to invoke its [[equitable jurisdiction]].

=== Criminal law ===

In common law jurisdictions, as a criminal offense, fraud takes many different forms, some general (e.g., theft by false pretense) and some specific to particular categories of victims or misconduct (e.g., [[bank fraud]], [[insurance fraud]], [[forgery]]). The elements of fraud as a crime similarly vary. The requisite elements of perhaps the most general form of criminal fraud, theft by false pretense, are the intentional deception of a victim by false representation or pretense with the intent of persuading the victim to part with property and with the victim parting with property in reliance on the representation or pretense and with the perpetrator intending to keep the property from the victim.<ref>{{cite web |url=http://www.justia.com/criminal/docs/calcrim/1800/1804.html |title=California Criminal Jury Instructions: 1804. Theft By False Pretense |publisher=Judicial Council of California |access-date=27 December 2013 |archive-date=28 December 2013 |archive-url=https://web.archive.org/web/20131228103050/http://www.justia.com/criminal/docs/calcrim/1800/1804.html |url-status=live }}</ref>

==Types of fraud==
[[Image:Workathomead.jpg|thumb|An advertisement for possibly fraudulent "[[work-at-home scheme]]"]]

The falsification of documents, known as [[forgery]], and counterfeiting are types of fraud involved in physical duplication or fabrication. The "theft" of one's personal information or identity, like one finding out another's social security number and then using it as identification, is a type of fraud. Fraud can be committed through and across many media including [[Mail and wire fraud|mail]], [[Mail and wire fraud|wire]], [[phone fraud|phone]], and the [[Internet]] ([[computer crime]] and [[Internet fraud]]).

Given the international nature of the web and ease with which users can hide their location, obstacles to checking identity and legitimacy online, and the variety of hacker techniques available to gain access to [[Personal identifying information|PII]] have all contributed to the very rapid growth of Internet fraud.<ref>{{Cite journal|last=Richet|first=Jean-Loup|date=2022|title=How cybercriminal communities grow and change: An investigation of ad-fraud communities|journal=Technological Forecasting and Social Change|volume=174|issue=121282|page=121282|doi=10.1016/j.techfore.2021.121282|s2cid=239962449|issn=0040-1625|doi-access=free}}</ref>  In some countries, tax fraud is also prosecuted under false billing or tax forgery.<ref>"Tax Fraud and the Problem of a Constitutionality Acceptable Definition of Religion". BJ Casino. ''American Criminal Law. Rev.'', 1987</ref> There have also been fraudulent "discoveries", e.g., [[scientific misconduct|science]], where the appetite is for prestige rather than immediate monetary gain.<ref>{{Cite journal|last1=Müller|first1=M. J.|last2=Landsberg|first2=B.|last3=Ried|first3=J.|date=April 2014|title=Fraud in science: a plea for a new culture in research|journal=European Journal of Clinical Nutrition|language=en|volume=68|issue=4|pages=411–415|doi=10.1038/ejcn.2014.17|pmid=24690631|issn=1476-5640|doi-access=free}}</ref>

A [[hoax]] is a distinct concept that involves deliberate deception without the intention of gain or of materially damaging or depriving a victim.

=== Internal fraud ===

Internal fraud, also known as "insider fraud", is fraud committed or attempted by someone within an organisation such as an employee.<ref>Barclays Corporate, "[https://www.barclayscorporate.com/insights/fraud-protection/internal-fraud/ The growing threat of internal fraud]". {{Webarchive|url=https://web.archive.org/web/20221106160255/https://www.barclayscorporate.com/insights/fraud-protection/internal-fraud/ |date=6 November 2022 }}, accessed 6 November 2022.</ref>

=== Commodities fraud ===
The illegal act of obtaining (or the attempt of obtaining) a certain amount of [[currency]] in accordance with a [[contract]] that promises the later [[Trade|exchange]] of equated [[asset]]s, which ultimately never arrive, is a type of fraud, known as commodities fraud.<ref name=":0">{{Cite web |title=Commodities fraud {{!}} Definition, History, & Examples  |url=https://www.britannica.com/topic/commodities-fraud |access-date=2022-12-17 |website=Britannica |first1=Michael |last1=McGregor |language=en |archive-date=17 December 2022 |archive-url=https://web.archive.org/web/20221217204141/https://www.britannica.com/topic/commodities-fraud |url-status=live }}</ref> Alternatively, the term can relate to: the failure of registering in an exchange; the act of deliberately providing falsified information to clients; the action of executing [[Trade|transactions]] with the sole purpose of making a profit for the [[payee]]; the theft of [[Funding|client funds]].<ref name=":0" />{{Better source needed|reason=The current source is insufficiently reliable ([[WP:NOTRS]]).|date=December 2022}}

==Detection==
{{further|Data analysis techniques for fraud detection}}
[[File:White Van Speaker Scam fraudulent MSRP.jpg|thumb|A fraudulent manufacturer's suggested retail price on a speaker]]
The detection of fraudulent activities on a large scale is possible with the harvesting of massive amounts of financial [[data analysis|data]] paired with [[predictive analytics#Fraud detection|predictive analytics]] or forensic analytics, the use of electronic data to reconstruct or detect financial fraud.

Using computer-based analytic methods in particular allows for surfacing of errors, anomalies, inefficiencies, irregularities, and biases which often refer to fraudsters gravitating to certain dollar amounts to get past internal control thresholds.<ref>{{cite journal|title=Forensic Analytics|url=http://www.analytics-magazine.org/july-august-2013/835-forensic-analytics |first1=Priti |last1=Ravi |website=Analytics Magazine|date=July–August 2013|access-date=8 November 2023|archive-date=19 August 2014|archive-url=https://web.archive.org/web/20140819083330/http://www.analytics-magazine.org/july-august-2013/835-forensic-analytics|url-status=dead }}</ref> These high-level tests include tests related to Benford's Law and possibly also those statistics known as descriptive statistics. High-level tests are always followed by more focused tests to look for small samples of highly irregular transactions. The familiar methods of [[correlation]] and [[time-series analysis]] can also be used to detect fraud and other irregularities.<ref>{{Cite web|title=Using Data Analysis to Detect Frauds|url=https://www.acfe.com/uploadedFiles/ACFE_Website/Content/review/da/04-Advanced-Data-Analysis-Techniques.pdf|access-date=5 July 2020|publisher=Association of Certified Fraud Examiners|archive-date=5 July 2020|archive-url=https://web.archive.org/web/20200705210612/https://www.acfe.com/uploadedFiles/ACFE_Website/Content/review/da/04-Advanced-Data-Analysis-Techniques.pdf|url-status=dead}}</ref>

==Cost==
Participants of a 2010 survey by the [[Association of Certified Fraud Examiners]] estimated that the typical organization loses five percent of its annual revenue to fraud, with a median loss of $160,000. Fraud committed by owners and executives were more than nine times as costly as employee fraud. The industries most commonly affected are banking, manufacturing, and government.<ref name="acfe">{{cite report |title=Report to the Nations on Occupational Fraud and Abuse|year=2010 |url=http://www.acfe.com/rttn/2010-highlights.asp|publisher=[[Association of Certified Fraud Examiners]]|archive-date=7 July 2011|archive-url=https://web.archive.org/web/20110707080711/http://www.acfe.com/rttn/2010-highlights.asp}}</ref>

==By region==

===Asia===

====China====
In China, according to the [[Criminal Law of the People's Republic of China]], the '''Crime of Fraud''' ({{Lang-zh|s=诈骗罪|labels=no}}) refers to the "criminal act of deceiving and obtaining public or private property."<ref name=":1">{{Cite web |title=中华人民共和国刑法 – 中国人大网 |url=http://www.npc.gov.cn/zgrdw/npc/lfzt/rlys/2008-08/21/content_1882895.htm |access-date=2023-09-23 |website=The National People's Congress |archive-date=5 May 2022 |archive-url=https://web.archive.org/web/20220505105900/http://www.npc.gov.cn/zgrdw/npc/lfzt/rlys/2008-08/21/content_1882895.htm |url-status=live }}</ref>

According to Article 266 of the Criminal Law:<ref name=":1" />

# Those who commit fraud involving a "relatively large amount" of public or private property shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention, or injunction control with community correction, and may additionally or solely be fined.
# If the amount involved is "large" or there are other serious circumstances, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years and shall also be fined.
# If the amount involved is "particularly large" or there are other particularly serious circumstances, the offender shall be sentenced to fixed-term imprisonment of over ten years or life imprisonment and shall also be fined or have their property confiscated.

According to the "Interpretation on Several Issues Concerning the Specific Application of the Law in Handling Criminal Cases of Fraud" ({{Lang-zh|s=关于办理诈骗刑事案件具体应用法律若干问题的解释|labels=no}}) issued by the [[Supreme People's Court]] and the [[Supreme People's Procuratorate]] in 2011, for cases of fraud involving public or private property with a value ranging from 3,000 yuan to 30,000 yuan, from 30,000 yuan to 500,000 yuan, and over 500,000 yuan, they should be respectively deemed as "relatively large amount," "large amount," and "particularly large amount" as stipulated in Article 266 of the Criminal Law.<ref>{{Cite web |last=中华人民共和国最高人民法院 中华人民共和国最高人民检察院 The Supreme People's Court of the People's Republic of China and the Supreme People's Procuratorate of the People's Republic of China |date=2011-03-01 |title=最高人民法院 最高人民检察院关于办理诈骗刑事案件具体应用法律若干问题的解释 - 中华人民共和国最高人民法院公报 |url=http://gongbao.court.gov.cn/Details/237391917228c62a82943bc9c9af1c.html |access-date=2023-09-23 |website=中华人民共和国最高人民法院公报 Gazette of the Supreme People's Court of the People's Republic of China |archive-date=8 November 2023 |archive-url=https://web.archive.org/web/20231108115704/http://gongbao.court.gov.cn/Details/237391917228c62a82943bc9c9af1c.html |url-status=live }}</ref>

====India====

In India the criminal laws are enshrined in the [[Indian Penal Code]].<ref>{{cite web|url=https://indiankanoon.org/doc/1569253/|title=Indian Penal Code|work=Indian Kanoon|access-date=2 March 2021|archive-date=12 April 2021|archive-url=https://web.archive.org/web/20210412061856/https://indiankanoon.org/doc/1569253/|url-status=live}}</ref> It is supplemented by the [[CrPC|Criminal Procedure Code]] and [[Indian Evidence Act]].

===Europe===
====United Kingdom====
In 2016 the estimated value lost through fraud in the UK was £193 billion a year.<ref>{{cite news|title=UK fraud costing '£193bn a year', new study suggests|url=https://www.bbc.com/news/uk-36379546|access-date=6 September 2017|agency=BBC|date=25 May 2016|archive-date=7 September 2017|archive-url=https://web.archive.org/web/20170907035656/http://www.bbc.com/news/uk-36379546|url-status=live}}</ref>

In January 2018 the ''[[Financial Times]]'' reported that the value of UK fraud hit a 15-year high of £2.11bn in 2017, according to a study. The article said that the accountancy firm BDO examined reported fraud cases worth more than £50,000 and found that the total number rose to 577 in 2017, compared with 212 in 2003. The study found that the average amount stolen in each incident rose to £3.66m, up from £1.5m in 2003.<ref>{{cite news|url=https://www.ft.com/content/7fb80c16-f6c5-11e7-8715-e94187b3017e |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/7fb80c16-f6c5-11e7-8715-e94187b3017e |archive-date=10 December 2022|title=UK fraud hits 15-year high with value of £2bn|work=Financial Times|url-access=subscription}}</ref>

As at November 2017, fraud is the most common criminal offence in the UK according to a study by Crowe Clark Whitehill, Experian and the Centre for Counter Fraud Studies.<ref>{{Cite web |url=http://www.cityam.com/275550/fraud-costs-uk-economy-gbp190bn-incidents-soar |title=Fraud costs the UK economy £190bn as incidents soar &#124; City A.M. |access-date=13 November 2017 |archive-url=https://web.archive.org/web/20171113222159/http://www.cityam.com/275550/fraud-costs-uk-economy-gbp190bn-incidents-soar |archive-date=13 November 2017 |url-status=dead }}</ref> The study suggests the UK loses over £190 billion per year to fraud. £190 billion is more than 9% of the UK's projected GDP for 2017 ($2,496 (£2,080) billion according to ''Statistics Times''.{{citation needed|date=October 2019}}) The estimate for fraud in the UK figure is more than the entire GDP of countries such as Romania, Qatar and Hungary.<ref>{{cite news|url=https://www.enterprisetimes.co.uk/2017/11/13/experian-claims-fraud-costs-uk-190-billion-per-year|title=Experian claims fraud costs GB£190 billion per year|work=Enterprise Times|date=13 November 2017|last1=Murphy|first1=Ian|access-date=13 November 2017|archive-date=13 November 2017|archive-url=https://web.archive.org/web/20171113222422/https://www.enterprisetimes.co.uk/2017/11/13/experian-claims-fraud-costs-uk-190-billion-per-year/|url-status=live}}</ref>

According to another review by the UK anti-fraud charity [[Fraud Advisory Panel]] (FAP), business fraud accounted for £144bn, while fraud against individuals was estimated at £9.7bn. The FAP has been particularly critical of the support available from the police to victims of fraud in the UK outside of London. Although victims of fraud are generally referred to the UK's national fraud and cyber crime reporting centre, [[Action Fraud]], the FAP found that there was "little chance" that these crime reports would be followed up with any kind of substantive law enforcement action by UK authorities, according to the report.<ref>{{Cite book|url=https://www.fraudadvisorypanel.org/wp-content/uploads/2016/06/The-Fraud-Review-Ten-Years-On-WEB.pdf|title=The Fraud Review Ten Years On|publisher=Fraud Advisory Panel|year=2016|access-date=14 July 2016|archive-date=21 August 2016|archive-url=https://web.archive.org/web/20160821002419/https://www.fraudadvisorypanel.org/wp-content/uploads/2016/06/The-Fraud-Review-Ten-Years-On-WEB.pdf|url-status=live}}</ref>

In July 2016, it was reported that fraudulent activity levels in the UK increased in the 10 years leading up to 2016 from £52 billion to £193 bn. This figure would be a conservative estimate, since as the former commissioner of the [[City of London Police]], Adrian Leppard, has said, only 1 in 12 such crimes are actually reported.<ref>{{cite web|url=http://www.out-law.com/en/articles/2016/july/report-highlights-same-failings-in-fight-against-fraud-10-years-on/|title=Report highlights 'same failings' in fight against fraud 10 years on|website=www.out-law.com|access-date=18 September 2016|archive-date=26 August 2016|archive-url=https://web.archive.org/web/20160826172204/http://www.out-law.com/en/articles/2016/july/report-highlights-same-failings-in-fight-against-fraud-10-years-on/|url-status=live}}</ref> Donald Toon, director of the NCA's economic crime command, stated in July 2016: "The annual losses to the UK from fraud are estimated to be more than £190bn". Figures released in October 2015 from the Crime Survey of England and Wales found that there had been 5.1 million incidents of fraud in England and Wales in the previous year, affecting an estimated one in 12 adults and making it the most common form of crime.<ref>{{Cite news|url=https://www.bbc.co.uk/news/uk-36825605|title=UK fraud police release wanted list|date=18 July 2016|newspaper=BBC News|language=en-GB|access-date=18 September 2016|archive-date=28 September 2016|archive-url=https://web.archive.org/web/20160928072518/http://www.bbc.co.uk/news/uk-36825605|url-status=live}}</ref>

Also in July 2016, the [[Office for National Statistics]] (ONS) stated "Almost six million fraud and cyber crimes were committed last year in England and Wales and estimated there were two million computer misuse offences and 3.8 million fraud offences in the 12 months to the end of March 2016." Fraud affects one in ten people in the UK. According to the ONS, most fraud relates to bank account fraud. These figures are separate from the headline estimate that another 6.3 million crimes (distinct from fraud) were perpetrated in the UK against adults in the year to March 2016.<ref>{{Cite news|url=https://www.bbc.co.uk/news/uk-36854413|title=Nearly six million fraud and cyber crimes last year, ONS says|date=21 July 2016|newspaper=BBC News|language=en-GB|access-date=18 September 2016|archive-date=23 September 2016|archive-url=https://web.archive.org/web/20160923120128/http://www.bbc.co.uk/news/uk-36854413|url-status=live}}</ref>

Fraud was not included in a "Crime Harm Index" published by the [[Office for National Statistics]] in 2016. Michael Levi, professor of criminology at Cardiff University, remarked in August 2016 that it was "deeply regrettable" that fraud was being left out of the first index despite being the most common crime reported to police in the UK. Levi said "If you've got some categories that are excluded, they are automatically left out of the police's priorities."{{citation needed|reason=[[WP:DAILYMAIL]]|date=October 2019}} The Chief of the [[National Audit Office (United Kingdom)|National Audit Office]] (NAO), Sir Anyas Morse has also said "For too long, as a low-value but high-volume crime, online fraud has been overlooked by government, law enforcement and industry. It is now the most commonly experienced crime in England and Wales and demands an urgent response."<ref>{{cite news|title=Online fraud costs public billions but is still not a police priority, says watchdog|url=https://www.theguardian.com/uk-news/2017/jun/30/online-costs-public-billions-but-is-still-not-a-police-priority-says-watchdog|access-date=6 September 2017|agency=Press Association|newspaper=The Guardian|date=30 June 2017|archive-date=7 September 2017|archive-url=https://web.archive.org/web/20170907033658/https://www.theguardian.com/uk-news/2017/jun/30/online-costs-public-billions-but-is-still-not-a-police-priority-says-watchdog|url-status=live}}</ref>

[[HM Treasury]] issued guidance to [[central government|central government departments]] in January 2011 concerned with "Tackling Internal Fraud", concerned that economic pressures and potential staff redundancies at the time might lead those staff who "might be tempted" to commit fraud to make more of any opportunity which might arise, noting a possible shift in the balance between "the reward from fraud" and the risk of detection.<ref name=treasury>{{OGL-attribution|HM Treasury, [https://pdf4pro.com/view/tackling-internal-fraud-uk-government-web-archive-407b6.html Tackling Internal Fraud], published January 2011, archived version accessed 9 November 2022}}</ref> An aspect of the guidance was to equip staff to look out for "fraud indicators": clues or hints that an individual member of staff, team or area of activity might need "a closer look".<ref name=treasury />{{rp|Section 4.16}}

In 2022, the television program ''[[Scam Interceptors]]'' revealed that the majority of fraud in the United Kingdom was perpetrated from industrial-scale scamming [[call centre]]s in Asia.<ref>{{cite news |last=Dathan |first=Matt |date=10 April 2023 |title=Labour vows to bar foreign scam callers using UK numbers |url=https://www.thetimes.co.uk/article/labour-vows-to-bar-foreign-scam-callers-using-uk-numbers-ckbmb9sfb |work=[[The Times]] |access-date=8 May 2023 |archive-date=9 May 2023 |archive-url=https://web.archive.org/web/20230509180515/https://www.thetimes.co.uk/article/labour-vows-to-bar-foreign-scam-callers-using-uk-numbers-ckbmb9sfb |url-status=live }}</ref>

=====England, Wales, and Northern Ireland=====
Since 2007, fraud in [[England and Wales]] and [[Northern Ireland]] has been covered by the [[Fraud Act 2006]]. The Act was given [[royal assent]] on 8 November 2006, and came into effect on 15 January 2007.<ref>{{cite legislation UK |si=The Fraud Act 2006 (Commencement) Order 2006 |type=si |year=2006 |number=3200 |date=29 November 2006}}</ref>

The Act gives a statutory definition of the criminal offence of fraud, defining it in three classes—fraud by false representation, fraud by failing to disclose information, and fraud by abuse of position. It provides that a person found guilty of fraud is liable to a fine or imprisonment for up to six months on [[summary conviction]], or a fine or imprisonment for up to ten years on conviction on [[indictment]]. This Act largely replaces the laws relating to obtaining property by deception, obtaining a pecuniary advantage and other offences that were created under the [[Theft Act 1978]].

======Serious Fraud Office======
{{Main|Serious Fraud Office (United Kingdom)|Cifas}}
The [[Serious Fraud Office (United Kingdom)|Serious Fraud Office]] is an arm of the Government of the United Kingdom, accountable to the [[Attorney General for England and Wales]].

The [[National Fraud Authority]] (NFA) was, until 2014, a government agency coordinating the counter-fraud response in the UK.

[[Cifas]] is a British fraud prevention service, a not-for-profit membership organization for all sectors that enables organizations to share and access fraud data using their databases. Cifas is dedicated to the prevention of fraud, including internal fraud by staff, and the identification of financial and related crime.

=====Scotland=====
In [[Scots law]], fraud is covered under the common law and a number of statutory offences. The main fraud offences are common law fraud, uttering, embezzlement, and statutory fraud. The Fraud Act 2006 does not apply in Scotland.

===North America===

====Canada====
Section 380(1) of the [[Criminal Code (Canada)|Criminal Code]] provides the general definition for fraud in Canada:

{{blockquote|
'''380'''. (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

:(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
:(b) is guilty
::(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
::(ii) of an offence punishable on summary conviction, where the value of the subject-matter of the offence does not exceed five thousand dollars.<ref>{{cite web |url=http://laws-lois.justice.gc.ca/eng/acts/C-46/page-177.html#h-105 |title=Criminal Code, Section 380 |publisher=Laws-lois.justice.gc.ca |access-date=2013-12-05 |archive-date=7 October 2015 |archive-url=https://web.archive.org/web/20151007033324/http://laws-lois.justice.gc.ca/eng/acts/C-46/page-177.html#h-105 |url-status=live }}</ref>
|}}

In addition to the penalties outlined above, the court can also issue a prohibition order under s. 380.2 (preventing a person from "seeking, obtaining or continuing any employment, or becoming or being a volunteer in any capacity, that involves having authority over the real property, money or valuable security of another person"). It can also make a restitution order under s. 380.3.<ref>{{cite web |url=http://laws-lois.justice.gc.ca/eng/acts/C-46/page-178.html |title=Criminal Code, Sections 380.2 - 380.3 |publisher=Laws-lois.justice.gc.ca |access-date=5 December 2013 |archive-date=17 January 2014 |archive-url=https://web.archive.org/web/20140117000913/http://laws-lois.justice.gc.ca/eng/acts/c-46/page-178.html |url-status=live }}</ref>

The Canadian courts have held that the offence consists of two distinct elements:

:* A prohibited act of deceit, falsehood or other fraudulent means. In the absence of deceit or falsehood, the courts will look objectively for a "dishonest act"; and
:* The deprivation must be caused by the prohibited act, and deprivation must relate to property, money, valuable security, or any service.<ref>{{cite web|title = The Law of Fraud and White Collar Crime in Canada|url = http://www.blakes.com/pdf/Calgary/white_collar/Tab_4The_Law_of_Fraud_and_White_Collar_Crime_in_Canada.pdf|author = Tony Wong|publisher = [[Blake, Cassels & Graydon LLP]]|access-date = 22 April 2012|archive-url = https://web.archive.org/web/20120813020142/http://www.blakes.com/pdf/Calgary/white_collar/Tab_4The_Law_of_Fraud_and_White_Collar_Crime_in_Canada.pdf|archive-date = 13 August 2012|url-status = dead}}</ref>

The [[Supreme Court of Canada]] has held that deprivation is satisfied on proof of detriment, prejudice or risk of prejudice; it is not essential that there be actual loss.<ref>''R. v. Olan et al.'', [1978] 2 S.C.R. 1175. {{lexum-scc2|1978|2|1175}}</ref> Deprivation of [[confidential information]], in the nature of a [[trade secret]] or copyrighted material that has commercial value, has also been held to fall within the scope of the offence.<ref>''R. v. Stewart'', [1988] 1 S.C.R. 963. {{lexum-scc2|1988|1|963}}</ref>

====United States====
{{See also|United States free speech exceptions}}

=====Criminal fraud=====
The proof requirements for criminal fraud charges in the United States are essentially the same as the requirements for other crimes: guilt must be proved beyond a [[reasonable doubt]]. Throughout the United States fraud charges can be misdemeanours or felonies depending on the amount of loss involved. High value fraud can also trigger additional penalties. For example, in California, losses of $500,000 or more will result in an extra two, three, or five years in prison in addition to the regular penalty for the fraud.<ref>{{cite web |url=http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PEN&sectionNum=186.11 |title=California Code, Penal Code - PEN § 186.11 |author=<!--Not stated--> |website=California Legislative Information |publisher=California State Legislature |access-date=9 August 2017 |quote=If the pattern of related felony conduct involves the taking of, or results in the loss by another person or entity of, more than five hundred thousand dollars ($500,000), the additional term of punishment shall be two, three, or five years in the state prison. |archive-date=10 August 2017 |archive-url=https://web.archive.org/web/20170810013423/http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PEN&sectionNum=186.11 |url-status=live }}</ref>

The U.S. government's 2006 fraud review concluded that fraud is a significantly under-reported crime, and while various agencies and organizations were attempting to tackle the issue, greater co-operation was needed to achieve a real impact in the public sector.<ref>{{cite web|title=Financial Crimes Report 2006|url=https://www.fbi.gov/stats-services/publications/fcs_report2006|publisher=Federal Bureau of Investigation|access-date=6 September 2017|archive-date=10 July 2017|archive-url=https://web.archive.org/web/20170710160145/https://www.fbi.gov/stats-services/publications/fcs_report2006|url-status=live}}</ref> 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.

===== Civil fraud =====

Although elements may vary by jurisdiction and the specific allegations made by a plaintiff who files a lawsuit that alleged fraud, typical elements of a fraud case in the United States are that:
# Somebody [[Misrepresentation|misrepresents]] a [[material fact]] in order to obtain action or forbearance by another person
# The other person relies upon the misrepresentation
# The other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation

To establish a civil claim of fraud, most jurisdictions in the United States require that each element of a fraud claim be pleaded with particularity and be proved by a [[preponderance of the evidence]],<ref>See, e.g., {{cite web|title=Halpert v. Rosenthal, 267 A. 2d 730 (R.I. 1970)|url=https://scholar.google.com/scholar_case?case=5527501886831013047|website=Google Scholar|access-date=6 September 2017}}</ref> meaning that it is more likely than not that the fraud occurred. Some jurisdictions impose a higher evidentiary standard, such as Washington State's requirement that the elements of fraud be proved with clear, cogent, and convincing evidence (very probable evidence),<ref>{{cite web|title=WPI 160.02 Fraud—Burden of Proof|url=https://govt.westlaw.com/wciji/Document/I2cd1eacde10d11dab058a118868d70a9?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)|website=Washington Pattern Jury Instructions - Civil|publisher=West|access-date=24 May 2017|archive-date=6 August 2017|archive-url=https://web.archive.org/web/20170806221312/https://govt.westlaw.com/wciji/Document/I2cd1eacde10d11dab058a118868d70a9?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)|url-status=live}}</ref> or Pennsylvania's requirement that common law fraud be proved by clear and convincing evidence.<ref>{{cite web|title=Boehm v. Riversource Life Insurance Co., 2015 PA Super 120, 117 A.3d 308 (Pa. Super. 2015)|url=https://scholar.google.com/scholar_case?case=17142924722317996914|website=Google Scholar|access-date=24 May 2017}}</ref>

The measure of damages in fraud cases is normally computed using one of two rules:<ref>{{cite news|last1=Chang|first1=Stanley Y.|title=The CPA Journal Online|url=http://archives.cpajournal.com/old/15410303.htm|access-date=6 September 2017|date=April 1994|archive-date=7 September 2017|archive-url=https://web.archive.org/web/20170907032921/http://archives.cpajournal.com/old/15410303.htm|url-status=live}}</ref>
* The "benefit of bargain" rule, which allows for recovery of damages in the amount of the difference between the value of the property had it been as represented and its actual value;
* Out-of-pocket loss, which allows for the recovery of damages in the amount of the difference between the value of what was given and the value of what was received.
[[Special damages]] may be allowed if shown to have been [[Proximate cause|proximately caused]] by defendant's fraud and the damage amounts are proved with [[Asset specificity|specificity]].

Some jurisdictions may permit a plaintiff in a fraud case to seek [[Punitive damages|punitive]] or exemplary damages.<ref>{{cite journal|last1=Koerner|first1=Theodore G.|title=Contracts: Damages: Punitive Damages Awarded for Breach Accompanied by Fraudulent Act|journal=Michigan Law Journal|date=January 1958|volume=56|issue=3|pages=448–450|jstor=1286082|doi=10.2307/1286082|url=https://repository.law.umich.edu/mlr/vol56/iss3/11|access-date=2 January 2021|archive-date=22 January 2021|archive-url=https://web.archive.org/web/20210122231931/https://repository.law.umich.edu/mlr/vol56/iss3/11/|url-status=live}}</ref>

=====Anti-fraud provisioning=====

Beyond legislation directed at preventing or punishing fraud, some governmental and non-governmental organizations engage in anti-fraud efforts.

Between 1911 and 1933, 47 states adopted the so-called [[Blue sky law|Blue Sky Laws]] status.<ref>{{cite journal |title=Speech by SEC Staff: remarks at the F. Hodge O'Neal Corporate and securities Law symposium |url=https://www.sec.gov/news/speech/spch022103smc.htm |website=sec.gov |date=21 February 2003 |access-date=28 August 2017 |archive-date=8 July 2017 |archive-url=https://web.archive.org/web/20170708091409/https://www.sec.gov/news/speech/spch022103smc.htm |url-status=live }}</ref>
These laws were enacted and enforced at the state level and regulated the offering and sale of [[security (finance)|securities]] to protect the public from fraud. Though the specific provisions of these laws varied among states, they all required the registration of all securities offerings and sales, as well as of every U.S. [[stockbroker]] and brokerage firm.<ref name="bluesky">{{cite web |url=http://www.seclaw.com/bluesky.htm |title=Blue Sky Laws |publisher=Seclaw.com |date=7 July 2007 |access-date=5 December 2013 |archive-date=9 December 2017 |archive-url=https://web.archive.org/web/20171209204422/http://www.seclaw.com/bluesky.htm |url-status=live }}</ref> However, these Blue Sky laws were generally found to be ineffective.

To increase public trust in the capital markets the [[President of the United States]], [[Franklin D. Roosevelt]], established the [[U.S. Securities and Exchange Commission]] (SEC).<ref>{{cite web|title=Franklin Delano Roosevelt (1882–1945)|url=http://www.gwu.edu/~erpapers/mep/displaydoc.cfm?docid=erpn-fdr|website=gwu.edu|access-date=8 November 2023|archive-date=14 May 2021|archive-url=https://web.archive.org/web/20210514045636/https://www2.gwu.edu/~erpapers/mep/displaydoc.cfm?docid=erpn-fdr|url-status=live}}</ref> The main reason for the creation of the SEC was to regulate the [[stock market]] and prevent [[corporate abuses]] relating to the offering and sale of securities and corporate reporting. The SEC was given the power to license and regulate stock exchanges, the companies whose securities traded on them, and the brokers and dealers who conducted the trading.<ref>{{cite web|title=Securities and Exchange Commission ("SEC")|url=http://learn.advfn.com/index.php?title=Stock_Market_Regulation|website=learn.advfn.com|access-date=8 November 2023|archive-date=4 June 2023|archive-url=https://web.archive.org/web/20230604013057/https://learn.advfn.com/index.php?title=Stock_Market_Regulation|url-status=live}}</ref>

==Further reading==
{{Further|List of notable fraudsters}}
Apart from fraud, there are several related categories of intentional [[deception]]s that may or may not include the elements of personal gain or damage to another individual:
* [[Obstruction of justice]]
* {{UnitedStatesCode|18|704}} which criminalizes false representation of having been awarded any decoration or medal authorized by Congress for the Armed Forces of the United States

==See also==
{{div col|colwidth=30em}}
* [[Bait-and-switch]]
* [[Caper story|Caper stories]] (such as ''[[The Sting]]'')
* [[breach of contract|Contract fraud]]
* [[Political corruption|Corruption]]
* [[Cramming (fraud)]]
* [[Creative accounting]]
* [[Crimestoppers]]
* [[Deception]]
* [[Electoral fraud]]
* [[Embezzlement]]
* [[False Claims Act]]
* [[Federal Bureau of Investigation]] (FBI)
* [[Financial crimes]]
* [[Forgery]]
* [[Fortune telling fraud]]
* [[Fraud deterrence]]
* [[Fraud in the factum]]
* [[Fraud in parapsychology]]
* [[Fraud Squad (UK)]]
* [[Friendly fraud]]
* [[Front running]]
* ''[[Geneivat da'at]]''
* [[Great Stock Exchange Fraud of 1814]]
* [[Guinness share-trading fraud]], famous British business scandal of the 1980s
* [[Hoax]]
* [[Identity management]]
* [[Impersonator]]
* [[Insurance fraud]]
* [[Internal Revenue Service]] (IRS)
* [[Internet fraud]]
* [[Interpol]]
* [[Journalism fraud]]
* [[Mail and wire fraud]]
* [[Misappropriation]]
* [[Money laundering]]
* [[The National Council Against Health Fraud]]
* [[Organized crime]]
* [[Phishing]], attempt to fraudulently acquire sensitive information
* [[Placebo]]
* [[Police impersonation]]
* [[Political corruption]]
* [[Push payment fraud]]
* [[Quackery]]
* [[Quatloos.com]]
* [[Racketeer Influenced and Corrupt Organizations Act]] (RICO)
* [[SAS 99]]
* [[Scam]]
* [[Scientific misconduct]]
* [[Secret profit]]s
* [[Shell (corporation)|Shell company]]
* [[Swampland in Florida]]
* [[Tobashi scheme]], concealing financial losses
* [[United States Postal Inspection Service]]
* [[United States Secret Service]]
* [[White-collar crime]]
* [[Wood laundering]]
{{div col end}}

==References==
{{Reflist}}

==Further reading==
* [[Edward J. Balleisen]] ''Fraud: An American History from Barnum to Madoff''. {{ISBN|978-0691164557}} (2017). Princeton University Press.
* [[Fred Cohen]] ''Frauds, Spies, and Lies – and How to Defeat Them''. {{ISBN|1-878109-36-7}} (2006). ASP Press.
* Green, Stuart P. ''Lying, Cheating, and Stealing: A Moral Theory of White Collar Crime''. Oxford University Press, 2006. {{ISBN|978-0199225804}}
* [https://web.archive.org/web/20060213205107/http://www.wcl.american.edu/journal/lawrev/48/48-4.cfm Review Fraud – Alex Copola] Podgor, Ellen S. ''Criminal Fraud'', (1999) Vol, 48, No. 4 American Law Review 1.
* [https://web.archive.org/web/20070614010757/http://www.acpo.police.uk/asp/policies/Data/Fraud%20in%20the%20UK.pdf The Nature, Extent and Economic Impact of Fraud in the UK. February, 2007.]
* [https://web.archive.org/web/20130529110432/http://www.dilloninvestigates.com/index_files/Page390.htm ''The Fraudsters – How Con Artists Steal Your Money'']. {{ISBN|978-1-903582-82-4}} by Eamon Dillon, published September 2008 by Merlin Publishing
* Zhang, Yingyu. ''[https://cup.columbia.edu/book/the-book-of-swindles/9780231178631 The Book of Swindles: Selections from a Late Ming Collection]''. Columbia University Press, 2017. {{ISBN|978-0231178631}}

==External links==
{{Commons category}}
{{Wikiquote}}
* {{Wiktionary-inline}}
* [https://www.acfe.com/ Association of Certified Fraud Examiners]
* [https://www.fbi.gov/how-we-can-help-you/safety-resources/scams-and-safety/common-scams-and-crimes "Common Scams and Crimes" list] from the [[Federal Bureau of Investigation]]
* [https://www.justice.gov/criminal-fraud Fraud Section] of the [[U.S. Department of Justice, Criminal Division]]

{{Fraud}}
{{Scams and confidence tricks}}
{{Law}}
{{Types of crime}}
{{Authority control}}

[[Category:Fraud| ]]
[[Category:Crimes]]
[[Category:Deception]]
[[Category:Tort law]]
[[Category:Property crimes]]
[[Category:Financial crimes]]