Fraud

Fraud is a broad term covering many dishonest acts. It includes scams aimed at individuals, identity theft, insurance fraud, payment card fraud, accounting fraud by companies, investment fraud and fraud committed by employees against their employers.

What makes an act fraud is intent: the person knowingly makes a false statement, hides important facts or abuses a position of trust to benefit themselves or harm someone else.

For example, an employee who creates fake supplier invoices and pays them into their own bank account is committing fraud against their employer. A person who exaggerates the value of stolen items in an insurance claim is committing insurance fraud.

Fraud causes large losses to individuals, businesses and governments every year. Organisations try to prevent it through internal controls, such as separating duties so no single person controls a whole transaction, regular checks and audits, and fraud detection systems that flag unusual activity.

Fraud is a crime in most legal systems and can lead to fines, repayment orders and imprisonment. Victims are usually advised to report it promptly to their bank, the police or the relevant authority.