What is the definition of fraud?

Fraud is best defined as an intentional deception made for personal gain or to damage another individual. This definition captures the essence of fraud as it highlights the element of intent, which distinguishes fraudulent actions from errors or unintentional mistakes. For an act to be classified as fraud, there must be a purposeful misrepresentation or deceit aimed at achieving personal benefit, which can come at the expense of others—whether it’s causing financial harm directly to individuals or entities.

The other options fail to encompass these critical aspects of fraud. An unintentional act intended for business gain does not meet the criteria for fraud, as it lacks the essential element of intentional deception. Additionally, a legal act that benefits all parties involved describes a legitimate transaction, which cannot be classified as fraud. Lastly, while a deceptive practice that harms the economy reflects some consequences of fraud, it does not directly define the act itself nor does it emphasize the personal gain aspect that drives fraudulent behavior. Therefore, the definition that emphasizes intentionality and personal gain provides a clear and accurate understanding of what constitutes fraud.