Fraud pertains to the conscious decision to misrepresent something where the result is that another person will suffer damages, usually in the form of losing money. There is a general opinion that lying is an act of fraud, but from a legal perspective lying is just a small part of actual fraud. In order to be considered fraud, there must be a conscious attempt at misrepresentation (maybe in describing a product’s condition) and there should be a monetary damage that happens.
When it comes to fraud, many cases revolve around complex financial conducts of business as done by white collar criminals and even business professionals who have the specific knowledge to commit these complex situations of fraud and have the conscious criminal intent to commit fraud. For example, an investment broker can knowingly give clients information about a financial opportunity that guarantees huge returns. He has the professional credibility to actually give this kind of advice, which will lead to the clients believing him and taking his advice and shelling out the money to participate in the financial opportunity. If the broker knows that there is no real opportunity that exists and he still gets the payments from his clients and the clients find out, then the clients can sue the broker for fraud.
Fraud cannot be easily proven in court. Different states will have different laws with regards to fraud, but for all of these different laws, a number of conditions must be met in order to determine if the crime committed is actually fraud. One important condition that must be met is that there must be a deliberate misrepresentation in providing the facts. Did the seller consciously know before he tried to sell his products that the product was defective? Some employees or sales people may actually sell a product or service without knowing if the product was defective of there was deception involved in the product.