(redirected from Fraud Detection)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.


Any attempt to deceive another for financial gain. A clear example of fraud is selling a new issue that does not really exist. That is, the company can collect money from investors and, rather than use it to finance operations, pocket the money and do nothing. There are a number of types of fraud. Common types include forgery of documents, false claims in insurance, and filing bankruptcy to avoid debt rather than because of financial hardship.


Deception carried out for the purpose of achieving personal gain while causing injury to another party. For example, selling a new security issue while intentionally concealing important facts related to the issue is fraud.


the gaining of financial advantage by a person who deliberately deceives another person or business, by mispresenting himself.


A deceitful practice. Fraud consists of a misrepresentation of a material fact that is relied upon by another party to his or her detriment.There is no requirement that the misrepresentation be intentional.The thing misrepresented must be a fact; it is very difficult to prove fraud when one fails to fulfill his or her obligations but had good intentions in the beginning.

There are three types of fraud:

1. Intentional fraud. Punitive damages may be assessed for this type of fraud.

2. Negligent fraud. As when one makes a statement recklessly but without any intention to deceive, and someone relies on that statement and is injured when it turns out to be false. One example would be a real estate agent telling a buyer that all appliances are new when, in reality, the agent didn't know but thought they looked new. Depending on the degree of recklessness involved, this type of fraud may or may not support punitive damages.

3. Innocent fraud. As when one takes steps to confirm facts but is perhaps mistaken or given mistaken information, and then relays that information to someone else who relied on it and was injured.

The Statute of Frauds is a rule that says certain contracts must be in writing, including contracts having to do with real estate. It has nothing to do with fraud, per se, except to protect against possible fraud by requiring a writing.

References in periodicals archive ?
Fraud detection systems assist in reducing errors, which drives the market growth.
Additionally, SQN is employing their proprietary behavior analysis and transaction analytics software against a wider range of payments to help financial institutions with credit card fraud management, enterprise risk management, and online fraud detection.
Mount Pleasant, Texas-based Guaranty Bond Bank began using Integrated Fraud Detection because it wanted to integrate the IBT Check 21 imaging solution that it was currently using with a more robust fraud review.
BasePoint's release of PatternWatch is part of a suite of fraud detection software and services designed to bring next generation fraud solutions to the mortgage industry.
Fair Isaac's Falcon Fraud Manager is recognized as the leading global payment card fraud detection system, protecting more than 450 million active payment card accounts across six continents from fraud.
MasterCard Online Fraud Monitor differs from competitive offerings in that it is the only network-installed, global ATM and PIN POS fraud detection tool in the industry to protect PIN transactions, which are poised for double-digit growth for the next few years*.
Effective fraud detection requires a study in pattern identification, which is a function of identifying, isolating and tracking data.
And we rely on Parascript technology as an essential building block for next generation fraud detection tools.
SQN Banking Systems, a leading provider of integrated fraud detection and process improvement products for the financial industry, announced the successful integration of SENTRY: Signature(TM) at Labe Bank in Chicago.
SQN Banking Systems, a leading provider of integrated fraud detection and process improvement products for the financial industry, announces Los Angeles-based, Center Bank has implemented three SQN products to assist in their fraud prevention efforts including signature verification with SENTRY: Signature(TM), check fraud detection with SENTRY: Detect(TM) and centralized exception item processing with SENTRY: Exception(TM).
Interthinx(TM), the leading provider of comprehensive fraud prevention and decision support tools for the mortgage industry and an ISO business, has integrated its DISSCO(TM) fraud detection and prevention system with the INTERLINQ(R) E3 enterprise mortgage lending solution from Harland Financial Solutions.
Percept is the ONLY solution that provides complete real-time online fraud detection without requiring ANY application integration or end-user spyware