What is the illegal act of mixing personal funds with a client's funds called?

The act of mixing personal funds with a client's funds is referred to as commingling. This practice is prohibited in real estate and other financial transactions because it can lead to a lack of transparency and accountability in handling client funds. Commingling creates risks for clients, such as the potential loss of their funds and confusion over which funds belong to whom. Real estate agents and brokers are required to keep client funds in separate accounts to ensure that they are always available for the clients and to prevent misuse. This clear separation helps establish trust and professionalism in the handling of financial transactions in the real estate industry.

Fraud typically refers to an intentional deception made for personal gain, which is distinct from the act of commingling. Misrepresentation involves providing false information, whereas embezzlement specifically refers to the theft of funds placed in one’s trust, which can be a consequence of commingling but is a separate act in itself.