Detecting potential duplicates is relatively simple. Detecting absolute duplicates and automatically taking action against those records is a very dangerous concept. You probably would not want a record to automatically be deactivated or deleted because it is potentially a duplicate. Therefore, Microsoft Dynamics CRM handles the detection of duplicate records and provides the mechanism for you to evaluate the potential duplicate and take the appropriate actions.
Consider the following example. Assume that you have a duplicate detection rule that has the following criteria:
Match on first three letters of First Name
Exact match on Last Name
Exact match on Address 1: Street 1
Exact match on Address 1: ...