Fraud

- Fraud Act 2006 came into force on January 15, 2007

- Abolishes the eight deception offences in the Theft Acts 1968 and 1978
and replaces them with a general fraud offence that D can commit in one
of three ways (ss. 2-4)
- Each offence in the Fraud Act 2006 is a strict liability/conduct offence,
complete on the accused's acts notwithstanding any result caused
(representing a significant shift from the repealed deception offences)
- Section 1(1) FA 2006 creates the general offence of fraud which is
committed where a person breaches ss. 2, 3, or 4, which provide for 3
different ways of committing the offence:
o By false representation (s2)
o By failing to disclose information (s3)
o By abuse of position (s4)
- All three modes require dishonesty and an intention to make a gain or to
cause a loss, or the risk of loss, to another
SECTION 2: FRAUD BY FALSE REPRESENTATION:
- Under s2 there is no need to prove a result of any kind (unlike under the
old law). It is sufficient that D intends to cause loss or make a gain.
- D might be liable even though V knows that D's statement is false or V
would have acted in the same way even if he had known of the falsity.
- If having not actively misled V, and not being under a legal duty to correct
V's error (as per s3), D could be construed as making an implied false
representation, he may be liable under s.2.
Actus Reus
- The actus reus requires only that a false or misleading representation was
made.
- Representation must be of fact or law or a state of mind, not just opinion.
- Express statement may include: e.g. thief dressed in police uniform
- Implied statement may include: presenting a stolen credit card
- S 2(5) covers using a stolen card in a PIN machine
- Idrees v DPP [2011] EWHC 624 (Admin): D arranged for another person to
take a driving test in his name = false representation
- R v Barnard (1837) & C & P 784: Oxford gown worn to get a discount
- DPP v Ray [1974] AC 370: Ordering a meal in a restaurant implies that you
(or someone else) will pay for it.
- United Arab Emirates v Allen [2102] EWHC 1712 (Admin): A statement
may imply future conduct.
Mens Rea
- Mens Rea is satisfied by proof that he knew the representation was or
might be false: s2(2), and that he acted dishonestly: s2(1)(a), with intent
to cause gain or loss: s2(1)(b).
- False Representation
o Section 2(2)(a) provides that a representation is false by being
either untrue, or misleading. False representation can be
express or implied: S2(3).
o Does not include trade puffs.
o May include a half-truth
o May include a statement that sarts as true, but becomes false
 o D must know the representation is or might be false
o R v Deller (1952) 36 Cr App R 184: Where D believes her statement
to be false when it is in fact true: attempted fraud.
o R v Augunas [2013] EWCA Crim 2046: subjective mens rea is
required and includes where D deliberately closes her eyes to a risk
suggests that being aware of a risk = dishonesty
- Dishonesty
o No definition in the Fraud Act 2006.
o Ghosh test (leading case):
(i) Was what was done dishonest according to the ordinary
standards of reasonable and honest people? (objective
element)
(ii) Did the defendant realise that reasonable and honest
people would regard what he did as dishonest? (subjective
element)
o D must know either: that his representation is untrue or misleading;
or that it might be untrue or misleading.
- Intent to make a gain or loss
o Gain or loss must be in money or property: s5 (2) (essentially the
same requirement as s.34(2)(a) of the Theft Act 1968)
o Property means any property whether real or personal (including
things in action and other intangible property)
o D must intend to make gain by making the representation: s2(1)(b)
o No actual loss required.
o R. v Gilbert [2012] EWCA Crim 2392: Ds made false representations
about the financial state of their company when setting up a bank
account. Court failed to explain to jury that Ds needed to intend to
make a gain or cause a loss with these statements.
- Knowledge that representation is or might be untrue or misleading
- Computers and fraud:
o PRE-2006 ACT: only persons could be deceived.
o POST-2006 ACT: s2(5): ANY system or device.

SECTION 3: FRAUD BY FALLING TO DISCLOSE:

- Must have legal duty to disclose (a question of law for the judge)
- Section 2 discussion of dishonesty and intention to gain or cause loss
above applies equally here.
- R v Mashta [2010] EWCA Crim 2595: continuing to receive benefits while
employed. No knowledge required re. legal duty to disclose. But
dishonesty required.
SECTION 4: FRAUD BY ABUSE OF POSITION:
- A person commits fraud under s.4 if he:
o occupies a position in which he is expected to safeguard, or not to
act against, the financial interests of another person: s4(1)(a), and
o dishonestly abuses that position: s4(1)(b) whether by act or
omission: s4(2), intending, by abuse of that position, to make a
gain: s4(1)(c)(i) or cause loss: s4(1)(c)(ii).
- Section 2 discussion of dishonesty and intention to gain or cause loss
above applies equally here.
 - The Law Commission has stated that such a duty may arise within a family
context.
- The Home Office gave examples of relevant positions including where D
is given access to V's premises.
- The Law Commissions original proposal required secrecy. Although this
element was later removed by the Home Office, it remains an important
evidential matter (Ormerod).
- R v Marshall [2009] EWCA Crim 2076 Care home manager withdrew from
a/c
- Pennock and Pennock [2014] EWCA Crim 598: meaning of abuse in family
relationships?
- R v Gayle (Mark Diego) [2008] EWCA Crim 1344: airport shipping company
employee bribed to let a crate pass without inspection.
SECTION 11: OBTAINING SERVICES DISHONESTLY:
- Section 11 replaces obtaining services by deception in s1 of the Theft Act
1978 (the Theft Acts failed to protect against obtaining via wholly
automated processes). On indictment, it carries a maximum 5 years.
- Unlike ss.2-4, this offence requires D to obtain something - a service; it is a
result offence.
- A causal element remains: D's dishonest act must be the cause of the
service being obtained. The concept of services is limited to those for
which payment is required (Sofroniou). There is no longer any need to
show that deception was the cause of the obtaining.
- Actus Reus:
o D acting, for himself or another, to obtain services for which
payment is or will become due and for which he fails to pay in whole
or in part.
- Mens Rea:
o Requires proof of D knowing that the services are to be paid for or
knowing that they might have to be paid for, and acting with a
dishonest intent to avoid payment in whole or in part.

Other related offences under Fraud Act 2006:

SECTION 6: possession of articles for use in fraud.
- maximum 5 year sentence on indictment.
- Article defined in s8 as including any program or data held in electronic
form.
- No mens rea is stated.
SECTION 7: making or supplying articles for use in fraud.
- Maximum 10 years on indictment.
SECTION 3 THEFT ACT 1978: making off without payment
- A person who, knowing that payment on the spot for any goods supplied
or service done is required or expected, dishonestly makes off without
having paid as required or expected and with intent to avoid payment of
the amount due
- E.g. leaving a taxi (R v Morris [2013] EWCA Crim 436)