Criminal Law - Fraud (8)

Question 1

What is fraud?

Answer 1

Fraud: A number of offences exist under the Fraud Act 2006.

(1) General Rule: Fraud is a crime of intent; no consequences need to occur.

(2) Main Offences: There are three primary fraud offences:
False Representation: Fraud by false representation (s2).
Failure to Disclose Information: Fraud by failure to disclose information (s3).
Abuse of Position: Fraud by abuse of position (s4).

(3) Overlap: In practice, these offences can and often do overlap.

Question 2

What is fraud by false representation?

Answer 2

Fraud by False Representation: Dishonestly making a false representation with intent to make a gain for oneself or another, or a loss (or exposure to risk of loss) to another (s2).

Actus Reus
Actus Reus: Defendant: a) made a representation; b) which was false.

(1) Representation: Any representation as to fact or law, including as to the state of mind of the person making or receiving the representation (s2(3)).
Format: May be stated in words or communicated in conduct, with no limit as to how words are expressed.
Credit Cards: Valid forms of representation (Explanatory Note 15).
Machines: Representations may be received by machines, such as ATMs (s2(5)).
In Practice: May be express or implied (s2(4)). An opinion is an implied representation.

(2) False: A representation is false if it is untrue or misleading (s2(2)(a)).
‘Untrue’: Must be false. If the defendant believed it to be false, but it was true, AR is not satisfied.
Misleading: Must be ‘less than wholly true and capable of interpretation to the victim’s detriment’ (Home Office).

Mens Rea
Mens Rea: Defendant was: a) dishonest; and b) through their representation; c) intended to make a gain for themself or another or cause (or expose to a risk of) loss to another; and d) knew or might have known the representation was untrue or misleading.

(1) Dishonesty: Generally a matter of common sense.
Ivey Test: Where unclear, the Ivey Test will be applied (Explanatory Note 10).
Subjective Element: What were the defendant’s knowledge or belief to the facts?
Objective Element: Was this knowledge or belief dishonest by the standards of a reasonable and honest person?

(2) Causal Link: There must be a causal link between the representation and the intent to gain or cause loss.

(3) Intended Gain/Loss: The defendant must intend to cause a gain or a loss.
Gain: Includes keeping what one has, and gaining what one does not have (s5(3)).
Loss: Includes not letting one receive what they might receive, and depriving someone of what they have (s5(4)).
Relevant Assets: Gain or loss can apply to money or other property, whether real or personal (s5(2)).
Length of Time: Gain or loss may be temporary or permanent (s5(2)).

(4) Knowledge: The defendant must know, or might have known, the representation to be true or misleading (s2(2)(b)).
Knowledge: The defendant knew the representation to be true or misleading.
Potential Knowledge: Where knowledge is unclear, then recklessness to the risk of the representation being untrue or misleading will suffice.

Case Law
Idrees v DPP: Defendant had someone else impersonate him on a driving test.
R v Nizzar: Defendant was a shopkeeper who informed lottery winner she had won nothing.
R v O’Leary: Defendant told dementia sufferers he had repaired their roof, claiming payment.
R v Lambie: Defendant exceeded limit on credit card but continued to use it, which was a false representation to make a gain.

Question 3

What is Fraud by Failure to Disclose Information?

Answer 3

Fraud by Failure to Disclose Information: Dishonestly failing to disclose to someone personal information which is legally required to be disclosed, with intent to make a gain for oneself or another, or a loss (or exposure to risk of loss) to another (s3).

Actus Reus
Actus Reus: Defendant: a) failed to disclose information; b) which they were legally obliged to disclose.

(1) Information: This may include any form of information.

(2) Legal Requirement: Generally information required to be disclosed under contract, but also fiduciary duty and ‘custom’.

Mens Rea
Mens Rea: Defendant was: a) dishonest; and b) through their failure to disclose information; c) intended to make a gain for themself or another or cause (or expose to a risk of) loss to another.

(1) Dishonesty: Generally a matter of common sense.
Ivey Test: Where unclear, the Ivey Test will be applied (Explanatory Note 10).
Subjective Element: What were the defendant’s knowledge or belief to the facts?
Objective Element: Was this knowledge or belief dishonest by the standards of a reasonable and honest person?

(2) Causal Link: There must be a causal link between the failure to disclose and the intent to gain or cause loss.

(3) Intended Gain/Loss: The defendant must intend to cause a gain or a loss.
	Gain: Includes keeping what one has, and gaining what one does not have (s5(3)). Loss: Includes not letting one receive what they might receive, and depriving someone of what they have (s5(4)). Relevant Assets: Gain or loss can apply to money or other property, whether real or personal (s5(2)). Length of Time: Gain or loss may be temporary or permanent (s5(2)).

Question 4

What is Fraud by Abuse of Position?

Answer 4

Fraud by Abuse of Position: Dishonestly abuse of a position in which the defendant is expected to safeguard, or not act against, the financial interests of another person, with intent to make a gain for oneself or another, or a loss (or exposure to risk of loss) to another (s4).

Actus Reus
Actus Reus: Defendant: a) occupied a position in which they were expected to safeguard, or not act against, the financial interests of another person; and b) abused that position by act or omission.

(1) Relevant Position: Undefined in statute, but may include: trustee-beneficiary; director-company; professional-client; agent-principal; employer-employee; family-family; volunteer-recipient.
Scope: Interpreted very broadly - gang leaders found to have been expected to safeguard migrant workers (R v Valujevs).

(2) Abuse of Position: Defendant must abuse their position by act or omission.
Example: Care home manager’s use of residents’ bank details for personal use (R v Rouse).

Mens Rea
Mens Rea: Mens Rea: Defendant was: a) dishonest; and b) through their abuse of position; c) intended to make a gain for themself or another or cause (or expose to a risk of) loss to another.

(1) Dishonesty: Generally a matter of common sense.
Ivey Test: Where unclear, the Ivey Test will be applied (Explanatory Note 10).
Subjective Element: What were the defendant’s knowledge or belief to the facts?
Objective Element: Was this knowledge or belief dishonest by the standards of a reasonable and honest person?

(2) Causal Link: There must be a causal link between the abuse of position and the intent to gain or cause loss.

(3) Intended Gain/Loss: The defendant must intend to cause a gain or a loss.
Gain: Includes keeping what one has, and gaining what one does not have (s5(3)).
Loss: Includes not letting one receive what they might receive, and depriving someone of what they have (s5(4)).
Relevant Assets: Gain or loss can apply to money or other property, whether real or personal (s5(2)).
Length of Time: Gain or loss may be temporary or permanent (s5(2)).