Fraud

Question 1

Main legislation for fraud

Answer 1

Fraud Act 2006

Question 2

What does Fraud Act 2006 do?

Answer 2

• Abolishes all theft act deception
• Introduces a general fraud offence
• Give maximum sentence of 10 years imprisonment

Question 3

Fraud by false representation Actus Reus

Answer 3

• Making a representation
• Representation is false

Question 4

Mens Rea of Fraud by false representation

Answer 4

**- D knew representation was untrue **
- or might be untrue

-Or that it was misleading
- or might be misleading

• With intent to gain or cause loss
• Dishonestly

Question 5

Representation (S.1)

Answer 5

What type of Representation - As to facts or law (also include opinions of D’s to the facts assuming genuine)

• Representation to who? - To V, even if V remains oblivious

No human intended as recipient (is okay) s2(5)

A representation is still considered “made” if it is submitted to a system or device (e.g. a computer or ATM).

* Method of Representation

Orally, in writing , gestures
Explicit or Implicit **(Idrees v DPP) ** - False representation considered when he hired someone to take his driving test

Barnard -> D wore Oxford University attire to obtain goods on credit.
Held to be an implied false representation (i.e. that he was a student).

Barnard is Implicit

Question 6

Representations as to current states of mind or into the future

S2 of the Fraud Act 2003 Making a false representation

Answer 6

✅ 1. A Lie About Your Present Intention (Fraud)
If someone says they will do something in the future, but at the time they say it, they already know they’re lying, that can be fraud.

Example:
You borrow money and say, “I will repay you next week”, but you already know you won’t — you’re just saying it to get the money.
That’s a lie about your current intention — and that’s fraud**

❌ 2. A Genuine Promise That You Later Break (Not Fraud)

If you make a genuine promise to do something in the future (like pay back money), but then something changes, and you don’t do it — that’s not fraud.

Example:
You borrow money saying “I’ll repay you,” and you really meant it at the time, but you later can’t or don’t — that’s not a crime, even if the other person is upset.

Case example Govt v UAE - provided an undated check if they did not payback their loan (current representation)

Question 7

Omissions under Section 2 of the Act

Making a false representation

Answer 7

Come under making a False Representation

1.) Continuing representation (D makes a true statement, fact change and D omits to inform V of the change)

DPP v Rain -> (although before act but still applicable). D went to restaurant ate and left without paying.

Govt v UAE -> Only when it is reasonable to do so

2.)Failure to disclose information

V makes a mistake, D is aware and benefits from the mistake

Still better to use section 3 though

Question 8

False

Answer 8

True or misleading

“less than wholly true and capable of an interpretation to the detriment of V.”

No defence that D used falsity for a good reason

Section 2 of the Fraud Act (ALSO WHAT ABOUT SALES STRATEGIES)

Question 9

Mens Rea of Making a False Representation

Answer 9

Knowledge - subjective (on belief of the D)
- Representation is untrue/misleading
- Representation might be true or misleading

Agunas [2013] -> D presented fake card. “If an accused person willfully shuts his eyes to the obvious doubts of the representation”

-** Dishonestly** [Ivey] (same as theft)

Minor subjective (consider facts as D knew them to be)

Jury should be sure D’s conduct was dishonest among ordinary and reasonable people (objective)

- With Intent (to gain or to cause loss). Expose to risk of loss s5(2) (result not needed)

Causal link between representation and intention, however. Gilbert (2012). D opened a bank account and lied about financial position.

• No problem that V knows D is lying
• Temporary or permanent loss does not matter
• Gain includes keeping what one already has, as well as a gain by getting what one does have

s.5(2)

Question 10

Is an outcome needed for a false representation?

Answer 10

No it is not needed for a false reprsentation

Causation principles do not apply

Question 11

Implications of Ivey test to Fraud

Answer 11

• Definition becomes a lot wider - Ivy Test (subjective), (is lying dishonest?)

Question 12

Section 3 of Fraud Act Elements

Answer 12

**Fraud by failure to disclose information **

**Actus Reus: **
- Failure to Disclose Information
- D has a duty to disclose information

Mens Rea

Question 13

Actus Reus of Section 3

Answer 13

1.) Failure to Disclose Information

Failure to disclose sufficient information if it renders part of the contract voidable

Partial Disclosure COUNTS

2.) D has a duty to disclose Information

Razoq - no definition of a legal duty to act depends on circumstance

Facts: D (doctor) had to pass different exams to qualify, failed to mention he got excluded from hospital because he failed. WAS A LEGAL DUTY

**2006 Act: **
1.) Duties from statute
2.) Contract (express or implied terms)
3.) Fiduciary Relationship
4.) Custom of a particular trade of market

Fraud by failure to disclose

Question 14

Mens Rea for S3

Answer 14

• Dishonesty - Ivey
• With intent to gain or to cause loss or expose to loss
• No need of knowledge (D does not need to know he has to tell them or comitting fraud)

Failure to disclose information

Question 15

Section 4

Answer 15

Fraud by Abuse of Position

Question 16

Actus Reus of Section 4

Answer 16

1.) Occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person

Position of Financial Trust - not defined by statute

BUT (FA 2006 Explanatory Notes)
- Trustee and beneficiary
- Director and company
- Professional person and client
- Agent and principal
- Employee and employer between partners…..
- It may arise within a family (!) or… “in any context where the parties are not at arm’s length”

Examples:

Knowles [2013] - Energy Procurement Officer recieved payments to give to boss, did not pass them on. (Supposed to safeguard interests of another)

Woods [2011] - W was a deputy manager of a betting shop. Changed customers horse bets.

2.) Abuse of that position

Question for jury

In fiduciary - look at civil law rules, but no real definition

Pennock [2014] - Must be clear evidence of abuse for the judge to leave matter to the jury and there must be clear direction from the judge as to what the civil law would regard as a breach of duty

Question 17

Examples of s4 (Position of financial trust)

Answer 17

Valujevs [2014]

• Gangmaster recieving payments and arranging for rent but he was overcharging them for various expenses.
• Formal or fiduciary relationship is not required to trigger s.4 SO LIABLE

Cf. COL v DPP

• The defendant (D) employed (V) in their home in what appeared to be a domestic servitude situation.
• It ruled that there was no clear legal expectation for the defendant to safeguard V’s financial interests, which is a requirement under s.4.

Question 18

Mens Rea Section 4

Answer 18

Same to S3

Question 19

In relation AR 3 do all financial relationships include legal duty to disclose?

Answer 19

Not all financial relationships include legal duty to disclose:

• Mashta [2010] - D recieved asslyum support when he had been in employment. Fraud by failing to disclose information. Legal duty to disclose
• D [2019] - Stopped paying council tax after saying she had moved. No statutory duty.
• Zeroual [2022] - Council Tax - Single person discount, failed to disclose wife was living with him. HOWEVER, single person discount said if you were going to benefit you had to let them know. (EXPRESS)