The aim of this paper is to develop a novel method to determine the severity of a damage in a thin plate. This paper presents a novel fault detection and diagnosis approach employing a new electromagnetic acoustic transducer, called EMAT, together with a complex signal processing method. The method consists in the recognition of a fault that exists within the structure, the fault location, i.e. the identification of the geometric position of damage, and the determining the significance of the damage, which indicates the importance or severity of the defect. The main scientific novelties presented in this paper is: to develop of a new type of electromagnetic acoustic transducer; to incorporate wavelet transforms for signal representation enhancements; to investigate multi-parametric analysis for noise identification and defect classification; to study attenuation curves properties for defect localization improvement; flaw sizing and location algorithm development.