What Is Fraud? The Main Types, What the Law Says, and What to Do If It Happens to You

What fraud means

Fraud is the intentional use of deception to take something of value from another person. A common example: a caller says your grandson is in jail and needs bail, and you send money to a stranger. In everyday terms, fraud is when someone lies to you on purpose, or hides something they know is true, so that you hand over money, property or information that you would not have handed over if you knew the truth. The lie is the tool and your loss is the goal.

Three things are usually present. There is a false statement or a hidden fact: a fake invoice, a made-up emergency, an investment that does not exist. There is intent: the person knew it was false and meant to profit from it. And there is harm, or at least an attempt to cause it: money moved, an account opened in your name, a payment you were tricked into approving.

An honest mistake is not fraud. A store that charges the wrong price by accident has made an error you can ask them to fix. A seller who advertises a car as accident-free while knowing it was rebuilt after a crash has done something very different, because the false statement was chosen to get your money.

The word covers a wide range, from a single fake check to large schemes run by organized groups. What ties them together is the method: deception is used where a thief would use force or stealth.

How fraud is different from theft

In a theft, something is taken from you without your consent. In a fraud, you are tricked into handing it over yourself. That one difference changes almost everything about what happens next.

If someone takes your wallet, or logs into your bank account with a stolen password and moves money, you never agreed to anything. If someone calls pretending to be your bank and talks you into sending a transfer, you pressed the button, even though you did it because of a lie. Both are crimes and in both cases the person responsible is the one who stole or lied. But banks, card networks and payment apps often treat the two situations differently when deciding whether to return money.

Many real cases mix the two. A scammer may trick you into reading out a one-time code and then use it to move money you never approved. That is why the first call to the bank matters so much, and why the steps for a hacked bank account start with telling the bank what you saw, in order.

What federal law says about fraud

There is no single federal law called “fraud.” Instead, several statutes make it a crime to use a scheme to defraud together with a specific tool, such as the mail, a phone line or the internet, or against a specific target, such as a bank. The three that come up most often are these, quoted from the official United States Code published by the House of Representatives.

• Mail fraud, 18 U.S.C. 1341. It covers anyone who, having devised a scheme to defraud or to get money or property through false pretenses, representations or promises, uses the Postal Service or a private or commercial interstate carrier to carry it out. The maximum penalty is 20 years in prison, a fine, or both.
• Wire fraud, 18 U.S.C. 1343. The same scheme, carried out through wire, radio or television communication in interstate or foreign commerce. Phone calls, emails, texts and websites fall here. The maximum penalty is also 20 years, a fine, or both.
• Bank fraud, 18 U.S.C. 1344. A scheme to defraud a financial institution, or to get money it holds or controls through false pretenses. The maximum is a fine of up to $1,000,000, up to 30 years in prison, or both.

Mail fraud and wire fraud carry the same higher maximum, up to $1,000,000 and 30 years, when the violation affects a financial institution or involves benefits paid in connection with a presidentially declared major disaster or emergency.

The Justice Department’s Criminal Resource Manual summarizes what prosecutors must prove for wire fraud: a scheme to defraud, and the use of interstate wire communications to carry it out. Courts have also required proof that the person joined the scheme knowingly and with intent to defraud.

Two limits are worth knowing. These are maximums, and the sentence in a real case depends on many factors decided by a judge. And every state has its own fraud laws, so a local case may be charged under state law instead. This page explains how the laws work in general and is not legal advice for any individual situation.

Is there a minimum amount of money for it to count as fraud?

The federal mail, wire and bank fraud statutes do not set a minimum dollar amount. A scheme to take ten dollars by email meets the same definition as a scheme to take ten million, because the crime is the scheme and the use of the mail or wires, not the size of the loss.

The amount still matters in practice. It affects how a case is prioritized, how a sentence is calculated, and, under many state laws, whether a charge is treated as a misdemeanor or a felony. Those state thresholds vary, so the only reliable answer for a local case comes from the state’s own statutes or a lawyer licensed there.

For you, the practical point is simpler: report even small losses and even attempts that failed. Investigators connect many small reports into one case, and a report about a phone number or website that is still active can help stop the next attempt.

The most common types of fraud against individuals

Most fraud against ordinary people falls into a handful of patterns. The story changes, but the move is usually the same: create trust or urgency, then steer you toward a payment or a piece of information.

• Impostor scams. Someone pretends to be a government agency, a company you use or a relative in trouble. The FTC’s March 2026 testimony to Congress says impostor scams were the most reported type of fraud in 2025, with more than 1 million reports and more than $3.5 billion in reported losses.
• Investment fraud. Promises of high, fast returns, often in cryptocurrency, on a platform that shows fake profits. The same testimony says consumers reported losing the most money to investment scams in 2025, $7.9 billion.
• Check fraud and fake checks. A check that looks real is deposited, you are asked to send part of the money back, and the check later bounces. The mechanics are in how fake check scams work.
• Payment and wire fraud. A fake invoice, a fake closing instruction on a home purchase, or a request to wire money in an emergency. The first hours after a wire matter most, as explained in what to do after a wire transfer scam.
• Identity theft. Your personal information is used to open accounts, file taxes or claim benefits in your name. It often starts with a fraud and continues as its own problem.
• Online shopping fraud. A product that is paid for and never arrives, or a seller who takes payment outside the platform.

Some searches for “types of fraud” lead to workplace categories, such as payroll or financial statement fraud, which describe what employees or companies do to an organization. They are real, but the reader who is worried about a call, a message or a missing payment usually needs the list above.

How much fraud is reported in the US

Reported fraud losses reached record levels in 2025. According to the FTC, consumers filed 3 million fraud reports in 2025 and reported $15.9 billion in losses, up from 2.6 million reports and over $12 billion the year before.

The FBI’s Internet Crime Complaint Center counts a different group of reports, focused on internet-enabled crime. Its 2025 annual report lists 1,008,597 complaints and $20.877 billion in reported losses. People aged 60 and older filed 201,266 of those complaints, with $7.7 billion in losses, the largest amount of any age group.

These figures only include what people reported, and the two agencies count differently, so they should not be added together. They are useful for one thing above all: they show that fraud is common, that it reaches every age group, and that the people who lose money are up against organized schemes that are run again and again.

What to do if fraud happens to you

Start with the company that moved the money, because it is the only party that might still stop or reverse the payment. Then secure your accounts and file the official reports. Doing this quickly matters more than doing it in a perfect order.

1. Call your bank, card issuer or payment service right away. Use the number on the back of your card or inside the official app, not one from the message or call. Say it was fraud, ask them to stop or reverse the payment, and ask for a case number.
2. Stop contact with the person. Do not answer new calls or messages from them, and do not send more money to “release” or “recover” what you already paid.
3. Change passwords on your email and any financial account you shared or used, starting with email, and turn on two-step verification.
4. Save everything: screenshots, phone numbers, email addresses, website addresses, receipts and the dates and times of each contact.
5. If your personal information was taken, go to IdentityTheft.gov for a recovery plan. The steps are laid out in how to report identity theft.
6. File the reports described in the next section.

Getting money back is possible in some cases and not in others. It depends mostly on how you paid and how fast you reported it. The FTC notes, for example, that cryptocurrency payments do not have the same legal protections as credit and debit cards.

Where to report fraud, and what to expect

Report fraud to the FTC, to the FBI’s Internet Crime Complaint Center when it happened online or by phone, and to your local police when you lost money. Each report does a different job.

• Federal Trade Commission at ReportFraud.ftc.gov. Reports go into a database used by law enforcement across the country to spot patterns and build cases.
• FBI Internet Crime Complaint Center at ic3.gov, for fraud that involved the internet, email, text messages, apps or cryptocurrency.
• Local police. A police report is often requested by banks and insurers, and it creates a record in your own town.
• Your state attorney general or consumer protection office, listed at usa.gov/state-consumer, especially when a business is involved.
• If you are 60 or older, or helping someone who is, the Justice Department’s National Elder Fraud Hotline at 833-372-8311 assigns a case manager who helps with reporting at the federal, state and local levels.

The full order, with what each agency does with the report, is in how to report a scam and try to recover your money.

Set realistic expectations. Federal reports are mostly used to find and prosecute the people behind a scheme, and you may not hear back personally. If a case does reach a federal court, the Crime Victims’ Rights Act, 18 U.S.C. 3771, gives you rights that include timely notice of public court proceedings, the right to be heard at sentencing and the right to full and timely restitution as provided in law. For fraud offenses with an identifiable victim who lost money, 18 U.S.C. 3663A generally requires the court to order restitution at sentencing. An order to repay is not the same as being repaid, since it depends on what the defendant has and can pay.

After you report, watch for a second contact. The FTC warns about recovery scams: people who contact victims claiming they can get the money back for an upfront fee. Government agencies and legitimate organizations never ask for money to help you get a refund.

Fraud FAQ