I hear a lot about Sim lim scam but not Sim Lim fraud, as in this story. (Sim Lim is a shopping centre in Singapore.)

So basically a customer signed a very deceptive contract and lost a lot of money.

Is a scam basically a fraud that's technically legal? I tried to find this somewhere on the web and couldn't find it.

In particular I want to know:

  1. Why do many people call the Sim Lim case a scam, instead of fraud? A search in Google for "Sim Lim fraud" yields no results.
  2. Is a fraud always a scam, or the other way around? Which one is bigger?
  • My "feel" for the words has always been that a "scam" is a relatively "shallow" form of fraud where a quick buck is the goal. An elaborately planned fraud scheme which unfolds over months or years would not be considered a "scam". Further, it should be noted that the term "scam" is never used as a description of an individual's character, while often a person might be described as a "fraud".
    – Hot Licks
    Commented Sep 14, 2016 at 1:42
  • 4
    "Fraud is a legal term; scam isn't."
    – Mazura
    Commented Sep 14, 2016 at 2:25
  • @Mazura - I think Abscam was considered to be a substantial legal concern.
    – Hot Licks
    Commented Sep 14, 2016 at 2:33
  • @HotLicks that doesn't imply that "scam" is a legal term, however. There are similarly many scandals that led to substantial legal concerns, but there is no crime of "scandal," nor is "scandal" a legal term.
    – phoog
    Commented Mar 23, 2022 at 12:29

5 Answers 5


The biggest difference between the two words is that fraud has a long history in English and a well-established status in English and U.S. law, whereas scam goes back—according to Merriam-Webster's Eleventh Collegiate Dictionary (2003)—only to 1963, is of unknown origin, and clearly entered the language as a slang word, meaning that it was initially ill-defined and very informal.

Black's Law Dictionary, revised fourth edition (1968) devotes considerable space (almost two full pages) to legal definitions of fraud and of its various special forms (fraud in treaty, fraudulent alienation, fraudulent concealment, fraudulent conversion, fraudulent conveyance, fraudulent preferences, and fraudulent representation). At its most basic level, fraud has received the various judicial definitions included in this entry from Black's:

FRAUD. An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right; a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. [Citation omitted.] Any kind of artifice employed by one person to deceive another. [Citation omitted.] A generic term, embracing all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of truth, and includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated. [Citation omitted.] "Bad faith" and "fraud" are synonymous, and also synonyms of dishonesty, infidelity, faithlessness, perfidy, unfairness, etc. [Citation omitted.]

The particular definitions of different categories of frauds are defined in the statutes or ordinances of the relevant governing body of a given jurisdiction. The point of the definitions there is to establish grounds for criminal liability for anyone who engages in the proscribed conduct.

Here, in stark contrast, is the definition of scam in Robert Chapman & Barbara Kipfer, Dictionary of American Slang, third edition (1995):

scam 1 n (also scambo) by 1963 A swindle, confidence game; fraud; =CON. It was a full scam—Time/Looking for a good scambo for April Fool's Day...—Milwaukee Journal 2 v (also scam on) : You guys are scamming me—Joseph Wambaugh 3 n by 1964 The information; =the LOWDOWN, the SCOOP: Here's the scam... We're holing in for the night—Patrick Mann {origin unknown; perhaps related to early 1800s British scamp, "cheater, swindler"}

In short, scam has no legal status as a term of law in most jurisdictions, except insofar as it may be defined as a type of fraud. The term fraud is broad but usually very carefully defined in statutory law. Signing a deceptive contract that leads one to lose lots of money may well fall within the definition of fraud in many places—although the trick is to prove that the contract is truly deceptive and not merely disadvantageous after the fact to the signer.

  • Your last paragraph, do you have source? That's what I thought. Fraud is a legal term and scam is sort of any fraudulent way to make money that may not even be illegal. Something like sim lim do.
    – user4951
    Commented Sep 13, 2016 at 7:49
  • 7
    @Jim Thio: Fraud isn't just a legal term. It's also an everyday English word with vague meanings established by common usage among non-experts—just as scam is. My answer's point is that fraud also has actual legal definitions (which vary from jurisdiction to jurisdiction), whereas scam generally does not. But nonlawyers use fraud in speech and in writing every bit as sloppily as they do scam because that's the way we communicate in English (for the most part). You don't have to pass a bar exam to call something a fraud or a scam, whether the thing is legal or not.
    – Sven Yargs
    Commented Sep 13, 2016 at 7:57
  • 2
    In Indonesia another can sue you for defamation if you call something fraud. Their justification would be that the thing that they do is legal and is within the norms of the marketing laws. Obviously the customer lost a lot of money and get almost nothing.
    – user4951
    Commented Sep 13, 2016 at 10:01
  • 1
    The specific legal definitions of defamation, libel, and slander —like that of fraud —differ from one place to another. But in most English and U.S. jurisdictions, a plaintiff suing someone for defamation must meet a rather heavy burden of proof to establish liability. Not only must the plaintiff prove that he or she suffered calculable loss from the claimed injury, but (in most places) the plaintiff must prove that the defendant acted maliciously and in knowing disregard of the truth. ...
    – Sven Yargs
    Commented Sep 13, 2016 at 16:28
  • 2
    ... speech in the U.S. It also bears noticing that to the extent that using fraud in a general sense leaves a person open to liability for defamation, so might using the word scam. That is, falsely or maliciously accusing someone of "running a scam" (as opposed to "perpetrating a fraud") is no protection against being sued for defamation. If a court (or jury) finds that the allegation of scamming is false, injurious to the plaintiff, and recklessly or maliciously asserted, the defendant is not shielded by the fact that scam doesn't have a legal definition as a crime in that jurisdiction.
    – Sven Yargs
    Commented Sep 13, 2016 at 16:49

They are synonyms but have a subtle difference. A scam almost always involves money or transactions that involve monetary loss to the victim. But on the other hand, fraud is a broader term which might involve money or other gains or even bringing disrepute to a person.

According to this source,

Fraud is a broader category of wrongdoing than a scam. Scams can belong to the broader category of fraud.

A scam is generally a more minor offense than fraud, which is considered very serious.

In your example, the scammers (people who scam others) have come up with a deceptive contractual agreement. The victim would've signed without reading the entire document, eventually finding out that they have been cheated.

An example of fraud would be someone trying to impersonate you in an exam or submitting forged documents to gain entry into another country, etc.

  • Well, some indonesian lawyer says that what sim lim do is not technically a fraud because the victim sign a contract and it's the victim's obligation to read contract carefully. The distinction is important because a victim that claim he is defrauded may be liable for defamation.
    – user4951
    Commented Sep 13, 2016 at 5:01
  • 7
    I think you need a better source. A scam need not be minor. You can find Forbes Magazine calling Bernie Madoff's $50B Ponzi scheme a scam. A fraud can indeed be minor. Some states in the US have degrees of fraud, and if the amount defrauded is small, the crime is a misdemeanor. Your link takes me to a site owned by LOI English, run by a guy in Illinois who lists his education as a junior college in Joliet, Illinois. I'm not ready to takes his claims as dispositive. Fraud is a legal term; scam isn't.
    – deadrat
    Commented Sep 13, 2016 at 5:49
  • @deadrat $50B? Bernie's scam was a teenie-weenie bit bigger than that. More like $60B. Joliet, Illinois, bah-humbug. My alma mater (with honors) was HM Borstal, Oxford. Commented Sep 13, 2016 at 6:30
  • @PeterPoint I'm pretty sure that JCC stands for Joliet Community College since the Joliet Correctional Center graduated its last class in 2002.
    – deadrat
    Commented Sep 13, 2016 at 7:25
  • @JimThio Unless we're in a court of law, which we're not, it doesn't matter whether something meets some technical definition of "fraud". Language doesn't consist of technical, legal definitions that you can apply ritualistically to determine if something "really is" an instance of a particular concept or not. It's extremely vague because precision has cost and unnecessary precision is unnecessary cost. (Also, that argument is a frivolous non sequiter. That legal obligation is precisely how the fraud works! The object of the fraud is to use deception to create a legal obligation.) Commented Sep 13, 2016 at 17:47

As a matter of English usage, the main difference is that scam is more accepted as a countable noun - there's "scams", or "a scam" (referring either to a particular incident or a particular method of committing fraud), whereas such usage is not as accepted with the word "fraud" in many dialects of English. This would account for the differences you've seen in reference to the particular incidents you are asking about.

It's hard to find citations showing this - dictionaries tend to simply say "uncountable, countable" without any discussion of how common or accepted each usage is (The sole example it gives of a countable usage, "a $100 million fraud", sounds awkward to me).


There are some good answers here that describe the difference between a scam and a fraud. As to why this particular instance is generally called a scam rather than a fraud:

Your suspicion that it might have something to do with avoiding libel claims is plausible. In the US, the Constitutional protections for freedom of speech and freedom of the press in the 1st Amendment provide quite a bit of protection for defendants (see this article, among many possible sources, for more info). However, plaintiffs might well have an easier time in a jurisdiction without these considerations, like Singapore, and the slight difference in definition might matter there.

However, I think even in the US that "Sim Lim Scam" would be more attractive to copywriters than "Sim Lim Fraud". This is not due to any legal or definitional consideration, but purely to the sound of the words. Specifically, Sim Lim Scam has the dual attractions of being alliterative and consonant. Alliteration and consonance are both poetic or literary devices:


the repetition of usually initial consonant sounds in two or more neighboring words or syllables (as wild and woolly, threatening throngs) (Merriam-Webster)


recurrence or repetition of consonants especially at the end of stressed syllables without the similar correspondence of vowels (as in the final sounds of “stroke” and “luck”) (Merriam-Webster, definition 2.a)

So Sim Lim Scam. This is the type of tuneful title1 that can take root and sell copy.

1 Doesn't that sound catchier than musical headline, even though individually the second set of words might make more sense?


A scam is often a particular trick designed to con people out of money, while fraud can be something that is a legitimate business, but done in a manner that constitutes stealing, dishonesty, etc-- e.g. fraudulent accounting, a fraudulent business.

Fraudulent accounting, where the entries are basically lies to hide theft, can go on for years, but a scam is typically a specific plan of actions designed to swindle someone, and then the perpetrator disappears.


So in this case, the scam is the deceptive contract. But, the business based on selling these contracts could be said to be a fraudulent business.

  • A business is only fraudulent if it's not a legal business, e.g. if some guy pretending to be a business that doesn't actually exist. The asker's example describes a legitimate business that's even operating within the bounds of the law (or claims to believe it does, according to their lawyers). As another example, a fraudulent doctor is one that practices medicine without a license - they are not officially a doctor, but they operate as if they are.
    – talrnu
    Commented Sep 13, 2016 at 14:42
  • 1
    @talrnu Doubtful. Well Fargo conducts plenty of legal business. Turns out a bunch of fraudulent business as well.
    – deadrat
    Commented Sep 13, 2016 at 20:21
  • @deadrat You're confusing business, i.e. "operations of a business", with the business used in this answer, i.e. "an organization which conducts business". The business organization selling contracts is a legitimate business; the business (act) of selling them might be considered fraudulent (if it's truly illegal).
    – talrnu
    Commented Sep 13, 2016 at 20:36

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