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What Is Fraud?

Fraud, or a fraudulent act, is a crime committed for personal gain or to harm another individual or individuals, company, or other entity. Fraud is defined as "an intentional perversion of truth" or a "false misrepresentation of a matter of fact" which induces another person to "part with some valuable asset belonging to him or to surrender a legal right."

There are different types of fraudulant acts with definitions varying widely between legal jurisdictions. Most fraud has to do with monetary or property gain, but there are other reasons for a person to become involved in fradualent acts, such as to gain fame, prestige, or other personal affects.

In recent years, criminals have become sophisticated in the manner in which they defraud others, especially with the use of computers and the internet. Criminals from all over the world have access to almost anything you put on the internet, including your name, address, social security number, bank accounts, credit cards numbers, and other personal data that can be used to defraud you.

There are many types of fraud that include:

  • Embezzlement
  • Health care billing scams
  • Filing false insurance claims
  • False advertising
  • Counterfeiting
  • Money laundering
  • Securities fraud
  • Forgery
  • Identity theft
  • Ponzi schemes
  • False billing
  • Tax fraud
  • Unauthorized credit card usage
  • Unauthorized real estate transfers

The list of fradulent acts is long and varied which makes it increasingly necessary for local, state, and federal jurisdictions to institute stricter laws to protect consumers.

Things to look out for:

  • Go with your gut instincts or intuition. If something sounds to good to be true, it usually is.
  • Don't succumb to pressure tactics or guarantees of success.
  • Watch out for promises of unusually high returns on your investment dollars.
  • If something is "for free," you shouldn't have to put up your money to get it.
  • Review sales slips for accuracy.
  • Never wire money to people you don't know.
  • Never give out your bank or credit card account numbers over the phone and be careful about giving your account numbers over the internet.
  • Don't fall for foreign lottery pitches from overseas. They are illegal in the U.S.
  • Question charges on your bank and credit card statements that you don't recognize.
  • If it doesn't look or feel like a real business, contact the Better Business Bureau for confirmation.

Always think before getting involved in things that may seem questionable, even if it is offered by someone you know and trust. Fraud is a crime and it doesn't take much to get caught up in this type of criminal activity.

And remember, ignorance of the law is no excuse.

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