Fraud

(1) A person is guilty of fraud if he is in breach of any of the sections listed in subsection (2) (which provide for different ways of committing the offence).

(2) The sections are—

(a) section 2 (fraud by false representation),

(b) section 3 (fraud by failing to disclose information), and

(c) section 4 (fraud by abuse of position).

(3) A person who is guilty of fraud is liable—

(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or to a fine not exceeding the statutory maximum (or to both);

(b) on conviction on indictment, to imprisonment for a term not exceeding 10 years or to a fine (or to both).

(4) Subsection (3)(a) applies in relation to Northern Ireland as if the reference to 12 months were a reference to 6 months.

(1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

(2) A representation is false if—

(a) it is untrue or misleading, and

(b) the person making it knows that it is, or might be, untrue or misleading.

(3) “Representation” means any representation as to fact or law, including a representation as to the state of mind of—

(a) the person making the representation, or

(b) any other person.

(4) A representation may be express or implied.

(5) For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

A person is in breach of this section if he—

(a) dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and

(b) intends, by failing to disclose the information—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

(1) A person is in breach of this section if he—

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

(b) dishonestly abuses that position, and

(c) intends, by means of the abuse of that position—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

(2) A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.

(1) The references to gain and loss in sections 2 to 4 are to be read in accordance with this section.

(2) “Gain” and “loss”—

(a) extend only to gain or loss in money or other property;

(b) include any such gain or loss whether temporary or permanent;

and “property” means any property whether real or personal (including things in action and other intangible property).

(3) “Gain” includes a gain by keeping what one has, as well as a gain by getting what one does not have.

(4) “Loss” includes a loss by not getting what one might get, as well as a loss by parting with what one has.

In many cases fraud will also be theft. Prosecutors should bear in mind:

Theft carries a lower maximum sentence;

The actus reus requirement for fraud is far less;

The credit/debit status of any bank accounts debited is irrelevant to the Fraud Act offences. All that is in issue is the Defendant's right to use the account;

It is not necessary to prove or demonstrate any consequences of fraud (though they will clearly be material to sentence, compensation and confiscation). "Preddy" type difficulties will not arise (where the property obtained had not belonged to another);

Fraud Act offences do not require an intent permanently to deprive;

A charge should describe what actually happened and reflect the true criminality; and

The indictment should be as simple as reasonably possible.

In some cases there will be other possible offences such as False Accounting (section 17 Theft Act 1968), Making off Without Payment (section 3 Theft Act 1978), Obtaining Services Dishonestly (Section 11 Fraud Act 2006), offences under the Computer Misuse Act 1990, Forgery and Counterfeiting Act 1981, the Identity Cards Act 2006, the Proceeds of Crime Act 2002 or the Financial Services and Markets Act 2000.

Prosecutors must decide which offence properly reflects the criminality concerned.

The focus of the charge is the false representation. In most cases this will be the same as the deception under the old Theft Act offences. Prosecutors must analyse what the representation was and importantly when it was made, as simply as possible, for example:

In the case of stolen documents the false representation may be that the defendant was lawfully in possession of the cheque/credit card/book and entitled to use it or that he was the person named on the cheque/credit card/book and entitled to use it.

If the defendant is using his own credit card knowing that he has exceeded his credit limit then the false representation will be that he had authority to use the card and that the card issuer would honour the transaction (R v Lambie [1982] A.C. 449 HL)If the documents are forged then the false representation would be that the document was genuine and would be honoured.

If the representation was made in a letter which was discovered during the search of the suspect's property, then whether it was sent or not may be irrelevant to the fact that the representation was false, dishonest and intended to be sent.

The borderline between criminal and civil liability is likely to be an issue in alleged Fraud Act offences particularly those under Section 1. Prosecutors should bear in mind that the principle of caveat emptor applies and should consider whether civil proceedings or the regulatory regime that applies to advertising and other commercial activities might be more appropriate. Not every advertising puff should lead to a criminal conviction but it is also the case that fraudsters prey on the vulnerable.

Prosecutors should guard against the criminal law being used as a debt collection agency or to protect the commercial interests of companies and organisations. However, prosecutors should also remain alert to the fact that such organisations can become the focus of serious and organised criminal offending.

The criminal law should not be used to protect private confidences.

The criminal law is not a suitable vehicle to regulate such disputes. Before a criminal charge can proceed the ownership of any property must be absolutely clear. If that ownership is in real dispute the criminal law should not be invoked until ownership has been established in the civil courts.

However, circumstances will arise where the issues are clear and the offences are serious. If so, prosecution may be required in the public interest. Prosecutors should ensure that the state of affairs between the parties has not changed prior to any trial. This may affect both the public interest and the evidential test.

Section 80 of the Police and Criminal Evidence Act 1984 governs the compellability of spouses and civil partners in criminal proceedings. The prosecution cannot compel a spouse or civil partner to give evidence in Fraud Act offences.

Where there is a domestic relationship between the victim and an offender, there may also be a loss to a third party: for example, where a child steals and uses a parent's credit card. There may be public interest in criminal proceedings for the use of the card even where there is none for the theft.

The maximum penalty for offences under Sections 1, 7 and 9 and is 12 months' imprisonment on summary conviction and 10 years' imprisonment on conviction on indictment.

Section 10 of the Act increases the maximum penalty for offences contrary to Section 458 of the Companies Act 1985 to 10 years' imprisonment.

The maximum penalty for an offence under Sections 6 and 11 is 12 months' imprisonment on summary conviction and 5 years' imprisonment on conviction on indictment.