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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 offense or a civil offense. If you sue someone for fraud you may win your case even if they are not criminally prosecuted.

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