Fraud Act 2006

Fraud Act 2006

• Abolishes deception offenses under the Theft Acts 1968 and 1978.
• Replaces deception with one basic fraud offense.
• Includes obtaining property/services by deception and avoiding debt deception.
• Change due to previous offenses overlapping, technicalities, and failure to cover fraudulent digital wrongdoings.
• Requires false representation believed and acted on by a specific person.
• Requires no proof that the defrauded party acted to their detriment in reliance on the representation.
• Doesn't need to be communicated so long as it is made.

Three ways to commit fraud

• False representation
• Failure to disclose information
• Abuse of position

False representation

• Criminalizes the intentions of the wrongdoer rather than reactions of the victim.
• Catches computer "phishers" who dupe people.
• Maximum sentence is 10 years in prison
• Proof that the defendant made a representation and it was false.

False Representation Under s.2 Fraud Act 2006

• Occurs when a person:
• Dishonestly makes a false representation.
• Intends, by making the representation, to make a gain for himself or another.
• Acted dishonestly.
• Representation is false if it's untrue or misleading and the person knows it.
• Includes any representation as to fact or law, including a state of mind.
• Can be express or implied.
• A representation is made if it is submitted to a system or device designed to receive, convey, or respond to communications (with or without human intervention).
• Does not define representation

Examples of representation

• 'Stating something'
• 'Pretending something'
• 'Professing something'
• 'Creating an impression'
• A seller saying a car is in better condition than it is.
• A buyer implying good credit through a business statement.
• Painting over rust as an implication of condition.

Representation factors

• Being able to identify the representation that you believe is the basis of the fraud charge.
• Being able to explain why in relation to that representation it is false.
• Consider "What false impression or statement is the defendant making for the purpose of defrauding the victim?"
• Generally one cannot make a representation by saying or doing nothing.
• If asked about a false odometer the defendant confirms it's genuine, that's fraud.

Silence as False Representation

• Can occur when there's a duty to disclose.
• Also, when circumstances change so that a representation no longer describes the true state of affairs.
• A seller knows the odometer has been tampered with after his initial agreement.
• Failure to inform the local authority of a death before they begin work.

Representations and Machines

• The Fraud Act 2006 s.2(5) now makes it possible to commit fraud via a machine.
• Includes false info on online tax forms or 'phishing.'
• Fraud is completed upon making a false representation.
• Doesn't have to be effective or communicated.
• A representation is false if it's untrue or misleading, and the person knows this.

Mental State for Fraud

• Intention to make a gain or cause a loss.
• Knowledge of virtual certainty equated it to intention in theft.
• Intention aligns with theft definition but differs elsewhere.
• Gain/loss extends to money/property, including temporary/permanent.
• 'Gain' includes keeping what one has and getting what one does not.

Gain/Loss Examples

• Making a misrepresentation to get a car loan or delay debt payment.
• The intention to make a gain for oneself or someone else.
• The intention to cause a loss to another

Dishonesty and Fraud

• There is no equivalent of s.2 Theft Act 1968 in the Fraud Act 2006.
• A person making a false representation to gain what they believe they are entitled to will be up to the jury.

Fraud by failing to disclose information

• Provision is likely unnecessary because failing to disclose information counts as a representation under Fraud Act 2006.
• Section 3 simplifies proof of guilt.
• Defendant must be under a legal duty of disclosure, a moral one is insufficient.
• Mens rea involves not needing awareness of legal duty, but it influences jury assessment.

Abuse of Position, s.4 Fraud Act 2006

• Applies if a person occupies a position in which they are expected to safeguard financial interests, then dishonestly abuses that position to make a gain or cause a loss.
• Abuse can consist of an omission.
• There must be a duty to safeguard the other's financial interests.
• Legal examples of necessary relationships are trustee/beneficiary, director/company, and agent/principal. Examples within a family, voluntary work, or where parties are not at arm's length can also satisfy this requirement.

Best Practices

• Do not ignore s.2 and go straight to s.3.
• Should generally only use s.3 as a default option.

Obtaining Services Dishonestly, s.11 Fraud Act 2006

• Covers acquiring services, for which payment is expected, through dishonest conduct.
• The conduct element is any form of dishonest act, unlike the deception required by s.2.
• Differs from other parts of the Act because the service must actually be obtained.
• If services are obtained through false representation, proceedings can occur under either section. Obtaining examples are:
• Entering a cinema without paying.
• Having a haircut without paying.
• Using a membership without paying.
• Obtaining chargeable data or software payment

How Services are Obtained

• Services must be made available on the basis of payment.
• An individual obtains them without paying.
• They know payment is required.
• Ivey dishonesty standard applies: knowledge of payment requirement and intent not to pay.

Making Off Without Payment, s.3 Theft Act 1978

• A person who knows payment is required/expected for goods/service, dishonestly leaves without paying to avoid payment.
• 'Payment on the spot includes payment when collecting worked-on goods/services.
• Doesn't apply if supply of goods/service is unlawful or payment isn't enforceable.

Key Concepts

• "Making off" means from the spot where payment occurs
• It must be proven what that spot and whether the defendant departed it
• The expectation of the service needs to be that payment be made when making off goods or services.
• Dishonesty and intention to avoid payment must be proven
• If not intending to ever pay, that will make prosecution's work of proof rather difficult