The definition of fraud is - 'abuse of position, or false representation, or prejudicing someone's rights for personal gain'.
What is fraud?
Fraud is often financially motivated:
- When trickery is used to gain a dishonest advantage over another individual, business or organisation.
- When a person or organisation uses deception to cause harm, often financial, to another.
- Fraud costs each UK adult an average of £765 a year.
Types of fraud
We've compiled a list of fraud types to help you identify when you might be at risk:
Fraud and the law
There are many different types of fraud that are punishable by law and can be committed by individuals, organisations or businesses. Some of the acts of fraud the Fraud Act 2006 covers are:
- Fraud by false representation
- Fraud by failing to disclose information
- Fraud by abuse of position
- Possession of articles for use in fraud
- Making or supplying articles for use in frauds
- Participation by sole trader in fraudulent business
- Obtaining services dishonestly
- Penalty obtaining services dishonestly
Fraudulent activity can take place through any type of media, such as:
- Post mail and email
The effects of fraud
Individuals who fall victim to fraud can experience physical, psychological, financial and social damage.
The impact of fraud can also be damaging for corporate victims. Small and medium-sized companies are sometimes unable to recover from the financial or reputational damage caused. Large multi-national organisations can feel the effects through the increased cost of doing business.
Things to remember about fraud:
- It affects every level of society.
- It has a negative impact on individuals, organisations, businesses and communities.
- Fraud costs everyone – both through direct impact and indirectly through taxation and increased cost of products and services.