◆Fraud
"Fraud" is an act of deception intended to deprive a player of their full enjoyment of the game or a player's property. Fraud occurs most often as a result of breaching in-game agreements between players regarding trading, loot, or betting.
Key Points: (some points I bolded for you)
If a report has been filed and the prohibited activity is confirmed, a penalty will be issued. Additionally, the item and/or gil obtained through fraud will be confiscated
In some cases, players may have simply overlooked the loot rules agreed upon within the group, or may have made a mistake and looted an item differently from the rules, which resulted in a situation similar to "cheating." If the situation is resolved through discussion between the players, then it is not a violation. However, if the situation is not resolved through discussion and a report is made, and
it is confirmed that the situation is equivalent to "cheating," the item, gil, etc. in question will be confiscated, even if the action was not intentional. However, if it is determined that the situation was not an intentional act of fraud, the penalty may be reduced depending on the circumstances.