History of Fraud
In brief, there are three types of major fraud offences (not including public revenue or director frauds) which are all governed by the Fraud Act 2006. Additionally, there also exist offences related to fraud which are often, but not always, charged alongside an allegation of fraud. This article provides short summaries of each of these main offences.
Definition: Dishonesty
All fraud offences have a requirement of dishonesty. For dishonesty, it is necessary to consider what a person believed at the time of the alleged offence, before then considering whether an ordinary, decent person would view the subsequent action (taking into account what the person knew) as dishonest. In law, it does not matter whether or not the person believed his actions were dishonest himself.
Fraud by False Representation
This is an offence contrary to sections 1 and 2 of the Fraud Act 2006.
The key component of this offence is the making of a “representation”. The definition of “representation” is:
Any statement or assertion of information that is put forward by one person or body with the aim of gaining something from, or causing loss to, another person or body.
Making a representation includes, for example, submitting information into a computer or application form.
A representation can be either expressly stated or implied, and can relate to anything, including a person’s state of mind.
In light of the above definition, a person commits an offence if:
He dishonestly makes a false representation (as to “dishonestly” – what did he actually believe at the time he made the representation; and would an ordinary person consider that, taking into account what he actually believed at the time, the representation was therefore dishonestly made); and
He intends by the representation to either make a gain for himself or cause loss (including a risk of loss) to another person.
Fraud by Failing to Disclose
This is an offence contrary to sections 1 and 3 of the Fraud Act 2006.
Under this section, an offence is committed when:
A person has a legal obligation to disclose information (i.e. declaring income, bringing goods into the country etc.);
He dishonestly fails to disclose this information; and
He intends, by his failure to disclose, to either make a gain for himself or cause loss (including a risk of loss) to another person.
Fraud by Abuse of Position
This is an offence contrary to sections 1 and 4 of the Fraud Act 2006.
A person is guilty under this section if:
He holds a position in which he is supposed to safeguard, or not act against, another person’s financial interests;
He dishonestly abuses that position (either by something he does or by something which he fails to do but ought to have done); and
He intends, by abusing his position, to either make a gain for himself or cause loss (including a risk of loss) to another person.
Additional Offences
Aside from the above three main fraud offences, there exist a number of other, related offences. These are:
Possession or control of articles (i.e. any object or electronic programme or data) for use in the commission of an offence of fraud – section 6
Making or supplying articles for use in fraud – section 7
A sole trader carrying on a business fraudulently – section 9
Obtaining services dishonestly – section 11
As with all offences, fraud can be extremely complex (both legally and factually) and there is significant case law concerning each of the above offences. Determining whether or not a fraud has been committed can often be very difficult to establish and expert legal representation can assist in this process.
Legal disclaimer: Articles are intended as an introduction to the topic and do not constitute legal advice. The information contained herein is accurate at the date of publication but please note that the law is ever changing and evolving. If you require advice in relation to any matter raised in this article please contact a member of the team.