How are fraud and honest mistakes different?

The difference between fraud and honest errors is a matter of intention. People make mistakes and miscalculations all the time, by accident, not intending to harm or cheat anyone. If a clerk accidently adds numbers together wrong and ends up giving you the wrong change for a purchase, that is not a fraud. The clerk's intent was to give you the right change, not to cheat you. The clerk made a mistake. However, fraud occurs when a person lies to you intentionally or deceives you, knowing full well that what he or she is telling you is false or misleading. Fraud usually involves telling trusting or gullible people lies or gross exaggerations in order to extract money from those people. For example, let's say I pose as a house painter, even though in reality I have no experience painting houses, and tell you that I will paint the entire inside of your house for $500, a very low price. I then ask you for $300 to purchase supplies, then leave with the money; I never do any painting for you. My intention was to lie to you and get your money without doing any work, not on doing an honest job of painting your house. That is a fraud.