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Fraud 101 – What Is Fraud

John Andreas Widtsoe is quoted as saying “Fraud and deceit are anxious for your money. Be informed and prudent.”

So, what is fraud? Fraud can be and often is broadly defined, but to really understand fraud, it needs to be contextualised to identify the characteristics and issues unique to each type of fraud. Therefore, you will observe that although there are common definitions of fraud no two definitions are the same.

In law, fraud is an intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Further studies will reveal that fraud can violate 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. (Wikipedia)

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.

Fraud continues to be one of the fastest growing and most costly crimes in Africa and around the world.

According to the Black’s Law Dictionary “Fraud is any activity that relies on deception to achieve a gain. Fraud becomes a crime when it is a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment” In other words, if you lie to deprive an individual or a group of people or an organization of their money or property, you’re committing fraud.

While Nassim Nicholas Taleb says “If you see fraud and do not say fraud, you are a fraud.”

As at the time of writing this short article, we have observed that the recent dimension of fraud cases is becoming unfathomable – the loss of multi-millions and even billions of dollars is becoming commonplace. Thus, it goes without saying that the need to have a better understanding of what fraud is and contextualise fraud appropriately in these times is a necessity.

Fighting fraud through learning, research and service is the main goal of the Africa Academy for Counter Fraud and Anti-Corruption Studies (AACAS). Contact us today  www.aacas.com

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