We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Are the Different Types of Fraud?

Leigia Rosales
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Fraud can be either a civil violation or a criminal offense. Although the definition of fraud may vary by jurisdiction, it is normally described as a deceptive act which is intended to produce a financial or personal gain for the perpetrator. There are numerous types of fraud, including benefit, insurance, and tax fraud, as well as forgery, embezzlement, and identity theft, among others.

The definitions and penalties for the various types of fraud will differ by jurisdiction. As a rule, most types of fraud may be the basis for a civil violation. When an act of fraud is pursued as a civil violation, the plaintiff will be granted a monetary judgment against the defendant if he or she prevails at trail. If fraud is charged as a crime, on the other hand, the defendant may face criminal penalties such as incarceration or probation.

Tax fraud is one of the more common types of fraud. Simply making an unintentional error on a tax return does not rise to the level of fraud; however, when a taxpayer intentionally fails to report income or claims a dependent or deduction that he or she is not entitled to claim, for example, it may be considered an act of criminal fraud. Aside from facing hefty monetary penalties, a taxpayer who commits fraud may also face incarceration.

Benefit, or welfare, fraud is another type of fraud that is prevalent in the United States. When an applicant for public benefits, such as Medicaid or food stamps, knowingly makes a false statement on the application, he or she may be charged with benefit fraud. Common examples of situations that rise to the level of welfare fraud include failing to claim income, claiming household members that do not exist, or failing to divulge resources. In most cases, a first offense will only result in suspension of benefits; however, criminal fraud charges could be filed.

Forgery, embezzlement, and insurance fraud are types of fraud found in the business sector, as a rule. Whenever a person signs another person's name to a document in an attempt to secure personal or financial gain, he or she has committed a type of fraud known as forgery. By definition, embezzlement is usually defined as appropriating funds by a fraudulent means for personal gain. Insurance fraud comes in many forms, such as claiming damages that did not happen or reporting a loss that did not occur.

Identity theft is a new form of fraud that has become a significant concern in the digital age. When a person uses illegally obtained personal information regarding another person to assume his or her identity, that may be fraud. As a rule, theft of an identity is done in order to use the person's credit, or for some other type of personal gain, which makes the crime a fraud.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Leigia Rosales
By Leigia Rosales , Former Writer
Leigia Rosales is a former attorney turned freelance writer. With a law degree and a background in legal practice, she crafts compelling content that informs and engages readers. Her ability to understand complex topics and communicate them effectively makes her a valuable asset to any content creation team.

Discussion Comments

By Logicfest — On Feb 19, 2014

Fraud in the inducement is also another one that is fairly common yet not known all that well. That fraud simply involves someone promising a condition that causes the other party to enter into an arrangement only to discover later the promise was groundless. It must be shown that, absent that promise or condition, the complaining party would never have entered into the agreement.

Here's how that works. Let's say Bob sees Joe the Dentist to have some work done. Joe the Dentist says Bob needs an expensive procedure. Bob says he can't afford the procedure, so Joe says insurance might cover it. Joe claims to check with Bob's insurance company and tells Bob that the procedure will be covered. Bob tells Joe to go ahead and perform the procedure.

Bob later gets a Bill for $8,000 as his insurance company didn't cover the procedure. In that case, Bob may be able to argue fraud in the inducement -- he would have never had the procedure done without assurances from Joe that it would be paid for by insurance.

Believe it or not, this kind of thing goes on regularly. Most people in Bob's position would pay Joe's bill and chalk it up to experience rather than how "fraud in the inducement" and refuse to pay. Fraud in the inducement, by the way, is a great defense to raise in collection cases if it is available.

Leigia Rosales

Leigia Rosales

Former Writer

Leigia Rosales is a former attorney turned freelance writer. With a law degree and a background in legal practice, she...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.