How Scams Differ From Fraud—and Where Phishing Fits

Summary

The article explains how scams and fraud differ, using examples such as phishing, account takeover and identity theft, and offers factors to consider when classifying financially motivated crimes.

Key points

• The article presents fraud as a broad category and scams as a subset, while noting that legal and banking definitions can differ.
• It describes scams as involving a victim’s knowledge or permission and fraud as financial theft without it.
• A phishing scam could lead to fraud if stolen personal information is used for financial gain, such as filing a false tax return.
• Examples of fraud include invoice fraud, account takeover, identity theft, unauthorized credit-card use and tax fraud.
• Examples of scams include phishing, fake investments, prize schemes, romance scams, money-mule job offers and debt-elimination pitches.
• The article suggests considering the actor’s intent, the method of obtaining financial or other illicit gain, and the victim’s involvement.