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What Is the Connection Between Fraud and Theft?

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  • Written By: Renee Booker
  • Edited By: E. E. Hubbard
  • Last Modified Date: 18 March 2014
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While the definitions of fraud and theft will vary by jurisdiction, the connection between the two is somewhat universal. Typically, fraud is defined as using deception, or an act of deception, for personal or financial gain. Theft is generally defined as taking someone else's property without consent while meaning to deprive the owner of its value. Often, a theft is accomplished by the use of fraud and/or an act of fraud is also considered a theft.

Both fraud and theft have a monetary or personal gain to their essential elements. There are many different types of fraud. Common examples of fraud include benefit and insurance fraud, securities and tax fraud, and identity theft. In each one of these examples, a deceptive act on the part of the perpetrator eventually leads to a personal or financial gain.

Benefit fraud, for instance, is accomplished by providing false information on an application for government benefits, such as food stamps or cash assistance. If successful, the perpetrator gains the benefit of the government assistance. Insurance fraud may be perpetrated by filing a claim for a loss that never happened with the end result being that the claimant receives money for an unsubstantiated loss.

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In each of the fraud examples, the perpetrator gained something of value as a result of the fraud. Sometimes, that may amount to theft as well. Many benefit fraud cases are filed as both fraud and theft charges, for example. The benefits that the applicant received did not belong to him or her, which means he or she has taken something that did not belong to him or her with the intent to deprive the government of the value.

Identity theft is another crime that often has elements of both fraud and theft as well. In order to steal someone's identity, an act of deception is often used, whether over the internet or in person. Many jurisdictions consider a person's identity to be "property" for the purpose of charging a defendant with a crime. Therefore, stealing a person's identity can be both fraud and theft in many jurisdictions.

Whether or not a person can actually be convicted of both fraud and theft will depend on the jurisdiction where the charges are filed. Because the crimes often share very similar elements necessary to prove the crime, a person may ultimately only be able to be convicted of one. Generally, both fraud and theft are felonies, meaning a person can face a sentence that includes incarceration if convicted.

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Discuss this Article

Mammmood
Post 4

@nony - You might be interested to know this little fact about ID theft. Most of the people who commit it are close “friends” or relatives or associates of the victim. Isn’t that nice to know? That shatters the notion that your greatest risk is online, although that is certainly a risk too.

But if you really want to prevent ID theft, protect yourself by guarding your wallets, purses and personal information from people closest to you. It’s sad, but true.

nony
Post 3

@SkyWhisperer - Benefit fraud is the saddest of all. Imagine lying on your benefits application just so Uncle Sam can keep doling out food stamps or whatever.

Call it what you want. It’s theft by fraud, because you’re stealing from taxpayers and committing fraud at the same time. You’re only hurting yourself in the end.

SkyWhisperer
Post 2

@allenJo - Yeah, credit card theft is the easiest kind of ID theft to commit. The good news is that usually the credit card company will be on your side in those cases.

Just call them up and let them know it was an unauthorized transaction and they will refuse to honor it. Of course the credit card companies have their own protections in place too.

They have an ongoing identity theft and fraud alert protection system in place to determine if unauthorized transactions have taken place. These systems will mine personal credit card history and look for anomalies; they investigate those anomalies and will call you from time to time to ask if you made this or that purchase.

allenJo
Post 1

Well, stealing is stealing, the way I see it. But I guess I understand the legal distinctions between fraud and theft.

My daughter was recently the victim of credit card theft. She got a call informing her that one of her old credit cards – one that was inactive as a matter of fact – had been used to attempt to make a $1,500 purchase.

The purchase was declined because the card had been deactivated, and also her credit limit was not that high (she is a college student). So that tipped off the credit card company that something was amiss.

She didn’t suffer personally, since the transaction never went through, but still, it’s frightening when that kind of thing hits so close to home.

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