What term describes the act of making false statements that damage a person's reputation?

The term that describes the act of making false statements that damage a person's reputation is defamation. Defamation encompasses any false communication about a person that harms their reputation, which can occur through slander (spoken statements) or libel (written statements).

Choosing this term is particularly appropriate because defamation emphasizes the reputational harm caused by falsehoods, which aligns with the question's focus on statements that are both untrue and damaging. This legal concept is critical in various contexts, including insurance, where misrepresentation could potentially lead to legal disputes or claims against an individual's character.

While libel refers specifically to defamation in written form, the broader term defamation encompasses both written and spoken false statements. Understanding this distinction clarifies that while all libel is defamation, not all defamation is libel, making defamation the more comprehensive term for the scenario described in the question.