Fraud – Recourse Against Anyone Who Intentionally Lies on Matters of Importance

A person who intentionally lies to another person about a mat­ter of importance may be guilty of fraud. The person who has been defrauded may, in addition to pressing criminal charges, file a tort claim for damages. If successful, the defrauded per­son may recover his actual damages and, in appropriate cases, punitive damages. 

What are the differences between consumer fraud and common law fraud? First, it is easier to prove a case for consumer fraud, because less proof is required for consumer fraud than for common law fraud. Second, the time limit to file a case for consumer fraud is one year; the time limit for common law fraud is three years. Third, consumer fraud is limited to cases involving the sale or advertisement of merchandise, and common law fraud is not.

To establish a case for common law fraud, the injured party (the “plaintiff”) must prove, by clear and convincing evidence, that the person committing the fraud (the “defendant”) know­ingly made a false representation to the plaintiff concerning an important matter, with the intent that the plaintiff would act upon the misrepresentation, that the plaintiff, not knowing the representation was false, reasonably and justifiably relied on the representation, and as a result was damaged.

A person who has been defrauded may be awarded punitive damages if he can show, also by clear and convincing evidence, that the other person acted with an “evil mind.” An evil mind may be shown by intent to cause injury or wrongful conduct motivated by spite or ill will. While there is no limit to the amount of punitive damages that may be awarded in a particular case, the United States Supreme Court has sug­gested that punitive damages of more than nine times the actual damages may be excessive.