Fraud (Fraud Act 2006)

Introduction to Fraud

Welcome to the study of Fraud! While "theft" is about taking property, Fraud is about deception and dishonesty. Before 2006, the law on fraud was a messy collection of different crimes. The Fraud Act 2006 simplified everything by creating a single offence of fraud that can be committed in three different ways. We also study a separate offence under Section 11 of the same Act: Obtaining services dishonestly.

Important Tip: In many property crimes, the defendant must actually succeed in getting the property. In Sections 2, 3, and 4 of the Fraud Act, the crime is complete the moment the person acts dishonestly with the intent to make a gain or cause a loss—even if they don't actually get anything!

1. Fraud by False Representation (Section 2)

This is the most common type of fraud. It happens when someone tells a lie (or acts a lie) to get what they want.

The Actus Reus (The Action)

The defendant must make a false representation. Under the Act, a representation is "false" if it is untrue or misleading. A representation can be:

• Express: Stated in words or written down (e.g., lying on a CV).
• Implied: Shown through conduct (e.g., wearing a uniform you aren't entitled to wear to get a discount).
• To a Machine: Making a representation to a computer or an automated system (e.g., using a stolen credit card at an ATM).

The Mens Rea (The Mental State)

To be guilty, the defendant must:

• Be dishonest (as defined in s2 Theft Act 1968 concepts).
• Know that the representation is, or might be, untrue or misleading.
• Have the intent to make a gain for themselves/another, or cause a loss (or risk of loss) to another.

Example: If Jenny tries to sell a fake "designer" watch to Sarah, claiming it is real, she has committed fraud the moment she makes the claim with the intent to get Sarah's money. It doesn't matter if Sarah realizes it's a fake and refuses to buy it.

Quick Summary: Fraud by False Representation = A dishonest lie + Knowledge it’s a lie + Intent to gain/cause loss.

2. Fraud by Failing to Disclose Information (Section 3)

Sometimes, staying silent is just as criminal as telling a lie.

The Actus Reus (The Action)

The defendant fails to disclose information which they are under a legal duty to disclose. A legal duty can come from:

• A contract (like an insurance policy).
• A statute (a specific law).
• A professional relationship (like a solicitor and a client).

The Mens Rea (The Mental State)

• The defendant must be dishonest in failing to disclose the info.
• The defendant must intend to make a gain or cause a loss.

Example: If you apply for life insurance but "forget" to mention you have a terminal illness because you want a lower price, you have a legal duty to disclose that info. Failing to do so is fraud under Section 3.

3. Fraud by Abuse of Position (Section 4)

This section targets people in positions of trust who use their power to "rip off" others.

The Actus Reus (The Action)

The defendant occupies a position in which they are expected to safeguard, or not act against, the financial interests of another person, and they abuse that position.

• This usually applies to employees, trustees, company directors, or even family members looking after an elderly relative's bank account.
• The "abuse" can be a positive act (doing something) or an omission (failing to do something).

The Mens Rea (The Mental State)

• The defendant must be dishonest.
• The defendant must intend to make a gain or cause a loss.

Example: An elderly man gives his grandson access to his bank account to pay his utility bills. If the grandson uses that access to buy himself a new gaming console, he has abused his position of trust.

4. Obtaining Services Dishonestly (Section 11)

This is a separate offence under the Fraud Act 2006. It is different from Sections 2–4 because the service must actually be obtained.

The Actus Reus (The Action)

The defendant must actually obtain a service.
Services are covered if they are provided on the basis that payment has been, is being, or will be made.
Examples include climbing over a wall to watch a football match without a ticket, or using a "hacked" streaming service subscription.

The Mens Rea (The Mental State)

• Dishonesty.
• Knowledge that the service is being made available on the basis that payment has been, is being, or will be made.
• Intent not to pay (either in full or in part).

Did you know? Unlike Sections 2, 3, and 4, you cannot commit a Section 11 offence just by trying. You must actually get the service for free (or for less than you should have paid).

Summary Table: The Three Main Frauds vs. Section 11

Sentencing for Fraud

Fraud is a serious offence. Under Topic 2.3 of your syllabus, you should know that sentencing for adults can include:

• Custodial sentences: Prison time for serious or repeated frauds.
• Community orders: Such as unpaid work.
• Fines: Often used where the fraud was for financial gain.

The court will look at factors like the value of the fraud and how vulnerable the victim was (e.g., targeting the elderly) when deciding the sentence.

Common Mistakes to Avoid

1. Confusing s. 11 with s. 2: Remember, s. 2 is about lying to get property or money. s. 11 is specifically about services (like a haircut, a taxi ride, or a movie stream) where you don't intend to pay.

2. Thinking a gain must happen: For sections 2, 3, and 4, the defendant is guilty even if they are caught before they get the money. Focus on their intent!

3. The "Legal Duty" in s. 3: Students often forget that for Section 3, there must be a legal duty to speak. Just being "mean" by staying quiet isn't enough; the law must require you to share the information.

Memory Aid: The Fraud "GAP"

To remember the three ways to commit fraud under Sections 2, 3, and 4, think of the GAP:

• G - Give a false representation (s. 2)
• A - Abuse of position (s. 4)
• P - Private info withheld / Failure to disclose (s. 3)

Key Takeaway

The Fraud Act 2006 focuses heavily on the defendant's dishonesty and their intent. Whether they lie (s. 2), stay silent when they should speak (s. 3), or betray a trust (s. 4), the law aims to punish the dishonest mindset before the damage is even done.