In everyday life, many people are faced with situations such as debt, promises of failure, investment losses, etc., and wonder: is the other party in an ordinary civil dispute or is it already a fraud? Many of them reported to the police that they had not filed a case as a “civil dispute” and that some had been mistakenly identified as fraud even though the contract had been breached。
In accordance with article 266 of the criminal code and the judicial interpretation in force in 2026, the ministry of public security has established that the crime of fraud must meet four statutory requirements. Criminal recourse is only possible if it is fully met; one is missing and can usually be resolved only through civil court proceedings. The determination criteria are set out below, taking into account the latest regulations, regional differences and real cases。
I. Subjective element: the need for an “illegal occupation” (at its core)
This is an essential indicator of the distinction between fraud and civil disputes and is the first element to be examined by the judiciary。
Official definition: the perpetrator, knowing that his actions are fictional and concealing the truth, has, from the outset, sought to confiscate his belongings without a genuine will to return them, deliver them or make reparation。
In judicial practice in 2026, it was common to assume that “illegal possession” was:
1. The fraudulent use of money for purposes of waste, gambling, repayment of personal debts, illicit activities, not for the purposes agreed upon
Upon receipt of the money, flees, blackouts, changes mobile phone numbers, conceals property
3. Substantial fraud of a fictional project, knowing that it is unable to perform and to repay
4. Falsification of identity, qualifications, documents, fraudulent collection of property, subsequent refusal to communicate and return。
Key distinctions:
- the existence of real business, investment, the failure to honour commitments due to market risks, business losses, the willingness to pay back and the active communication of redress, which does not constitute an illegal occupation and is a civil dispute。
- i didn't want to do it in the first place, i just wanted to take the money and i thought it was illegal。
Objective element: deceptive acts of “false facts, concealment of the truth”
Perpetrators must have specific means of deception sufficient to create a false perception。
Two types of typical fraud:
1. Fake facts: fake projects, false investments, false identities, false contracts, false qualifications, false awards, false disasters, etc.
2. Concealing the truth: concealing key information such as its huge debt, its inability to perform, the true use of funds, and product defects。
Common means of fraud in 2026:
- telecommunications network fraud: payback, false internet lending, impersonation of customer service/prosecution law, ai face-to-face fraud, false auction
- underline fraud: runaways after borrowing money from acquaintances, false alliances, bridesmaids and pig-killers, retirement investment scams。
Caution: minor exaggeration, commercial bragging (e. G. “good product”) is generally not fraud; it must be a fictional core of facts and the concealment of key information sufficient to mislead others into property disposal。
Iii. Elements of effectiveness: victims are mistaken for being deceived and voluntarily dispose of property
This is the complete logical chain of fraud: deceptive behaviour the victim creates a misperception the victim voluntarily gives money/transfers/deliverys based on a misperception the perpetrator acquires property the victim suffers loss。
Two key points:
1. Misperception: the victim believes in the truth, not out of coercion, extortion or coercion
Voluntary disposition: active transfer, delivery, signature, provision of account information, etc。
Cases that do not constitute fraud:
- forced or threatened to hand over property which may amount to robbery or extortion
- voluntary gifts, investment losses, normal loan defaults, knowing that the other party has problems, are civil disputes。
Amount element: “larger amount” met (latest regional difference in 2026)
The fraud of public or private property must amount to a crime; failure to meet standards is generally dealt with in police cases (fine, detention)。
Framework for national unity 2026 (two high judicial interpretations currently in force):
- larger: $3,000 - over $10,000
- big amounts: 30,000 to over 100,000
- very large: over $500,000
Regional differences (2026 implementation criteria):
- telecommunications network fraud: a national standard of 3,000 yuan, with no geographical distinction
- ordinary fraud (underline):
- most of the eastern provinces: $5,000 is the “larger” starting point
- most of the provinces in the centre-west: 3,000 to 4,000 dollars as the starting point
- the provincial high courts may set local standards within a range of 30-10 million yuan。
Extraordinary aggravating circumstances (unsatisfactory amounts may also be established):
- frauds against persons with disabilities, older persons, minors, seriously ill persons and persons with disabilities
- fraud, extortion, favouritism, poverty alleviation, immigration, relief, medical care
- fraudulent use of telecommunications networks against an unspecified majority
- serious consequences for the victim, such as suicide and mental disorders。
Comparison of true cases: fraud was established only after 4 elements had been met
Case i: shanghai ai network fraud (judgement of february 2026)
Since 2024, the yang gang has been using ai to generate videos of beautiful women, packaging sad single people, leading them on short video platforms, and loving 15 men online。
- subjectivity: from the outset, a group of persons forged identity with the aim of obtaining money, without a genuine willingness to engage in a relationship, with an illegal occupation
- objective: the falsification of identity, the falsification of medical records and documents, the concealment of the nature of the fraud syndicate and the deception
- cause and effect: the victim believes in the truth and voluntarily transfers a total of 1. 71 million people for reasons such as “love, help” and so on
- amount: well over $500,000 (extraordinary large) to meet the target。
The court sentenced yang to 11 years ' imprisonment for fraud and the rest to separate sentences。
Case ii: private borrowing dispute in jiangxi (does not constitute fraud)
Zhang zhang, a citizen of nanchang, made a loan of $100,000 to lee to do business and agreed to return it for one year. Since then, due to a loss of business, zhang has been overdue but still has a small monthly repayment and has actively communicated a repayment plan。
- subjectivity: zhang has a real business, has a willingness to pay off, has no covert, has no purpose of illegal occupation
- objective: the borrowing does not pretend to be a crucial fact
- conclusion: li can only sue the court for repayment in a civil loan dispute and cannot be considered a fraud。
2026 practical reminder: how do you figure and how? Defence
1. Cf. Element 4: the police usually do not open criminal cases without any of them, but only take civil proceedings
Amount criteria: telecommunication fraud of $3,000 is open; common fraud of the province standard ($3,000 to $5,000)
Evidence retention: chat records, money transfer vouchers, contracts, recordings, identification information of the other party, etc., retained throughout the process
4. Access to rights:
- comprising fraud: reporting to local police stations or anti-fraud centres
- civil disputes: civil action in court for restitution of property and compensation for damages。
Many suffer from a lack of clarity about “fraud” and “civil disputes”. Bearing in mind the four necessary elements of the official clarity: the purpose of illegal possession + the act of deception + the misperception of a voluntary disposition + the greater amount, while satisfaction is fraud。
In day-to-day dealings, investments, borrowings, multiple verifications, retention of evidence and the use of suspect situations against criteria, both to avoid self-deception and to prevent the misperception of ordinary disputes as fraud and to make rational claims more efficient。
This is a public policy information and personal interpretation and does not constitute any operational recommendation, which is based on official guidelines and is based on operational risk. These are public goods content, not easy to create, rational communication and understanding。
