FRAUD

Section 1(1) of the Fraud Act 2006 (FA 2006) creates the general offence of fraud which is
committed where a person breaches s. 2, 3 or 4 which provide for different ways of
committing the offence.

Fraud by false representation

Section 2(1) provides that a person is in breach of s.2 if he dishonestly makes a false
representation intending to make a gain for himself or another or to cause loss to another
or to expose another to a risk of loss.

Actus reus: Making a false representation.

Representation: Section 2(3) of the FA 2006 defines representation: “any representation as

to fact or law, including a representation as to the state of mind of (1) the person making
the representation or (2) any other person.

A representation may arise from words or conduct. For an example, if D offers to sell a
painting (even though he does not own it), he is impliedly representing that he has the right
to do so.

A statement of present intention is a representation as to the state of mind. For an example,

if D asks P for money to fund his university course whereas his intention was to use the
money to bet on a horse, he would be falsely representing his state of mind.

A statement of intention can be implied from defendant’s conduct (DPP v Ray)

A change of circumstances may render a representation false (Rai)

Representations and machines

It is possible to commit fraud via machine as long as it can receive or respond to

communications. For an example, sending fake information on e-mail.

Person who puts foreign coins in a machine makes a false representation.

Someone who engages in “phishing” would also commit this offence: i.e. where a person
disseminates an email to large groups of people falsely representing that the email has been
sent by a legitimate financial institution. The email prompts the reader to provide
information such as credit card and bank account numbers so that the "phisher" can gain
access to others' personal financial information.

Representation must be false: The representation is false if it is untrue or misleading and the
person making it knows that it might be untrue or misleading.

Mens rea: (1) intention (a) to make a gain for himself or another or
 (b) to cause loss to another or to expose another to a risk of loss

(2) Dishonesty.

Gain: Gain means keeping what one has, as well as getting what one does not have.

Loss: Loss means not getting what one might get, as well as loss by parting with what one
has.

Gain or loss must be in money or other property. It can be temporary or permanent.

Dishonesty: Dishonesty will be determined by the application of Ghosh test and Ivey v
Genting Casinos case

Fraud by failing to disclose information

Section 3 makes it an offence to commit fraud by failing to disclose information to another
person where there is a legal duty to disclose the information.

Actus reus: Failing to disclose information which he/she is under a legal duty to disclose.

Legal duty may derive from statute, from transactions of utmost good faith, e.g. contract of
insurance, from express or implied terms of a contract or from the existence of a fiduciary
relationship between the parties, e.g. trustee and beneficiary. For example, the failure of a
solicitor to share vital information with a client within the context of their work relationship,
in order to perpetrate a fraud upon that client, would be covered by this section.

Mens rea: (1) intention (a) to make a gain for himself or another or

(b) to cause loss to another or to expose another to a risk of loss

(2) Dishonesty (the application of Ghosh test and Ivey v Genting Casinos case).

Fraud by abuse of position

Section 4 makes it an offence to commit a fraud by dishonestly abusing one's position. It
applies in situations where the defendant has been put in a privileged position, and by
virtue of this position is expected to safeguard another's financial interests or not act
against those interests.

Actus reus: Abusing a position of financial trust.

The term "abuse" is intended to cover a wide range of conduct. The offence can be
committed by omission as well as by positive action. For example, an employee who fails to
take up the chance of a crucial contract in order that an associate or rival company can take
it up instead at the expense of the employer commits an offence under this section.
Another example covered by this section is where a person who is employed to care for an
elderly or disabled person has access to that person's bank account and abuses his position
by removing funds for his own personal use.

Mens rea: (1) intention (a) to make a gain for himself or another or

(b) to cause loss to another or to expose another to a risk of loss

(2) Dishonesty (the application of Ghosh test and Ivey v Genting Casinos case)

Obtaining services dishonestly

Section 11 of Fraud Act 2006 creates a new offence of ‘obtaining services dishonestly’ by
replacing the old offence of ‘obtaining services by deception’. According to s. 11, a person
will be liable for obtaining services dishonestly if he, with intent to avoid payment, obtain
any services by a dishonest act for which payment was required.

Actus reus: To obtain any service without payment for which payment was required. The
service can be obtained for defendant himself or for another.

Mens rea: 1. Dishonesty (the application of Ghosh test and Ivey v Genting Casinos case)

2. Knowledge that payment is required

3. Intention not to pay for the service or not to pay in full (the defendant must
have that intention at the time of obtaining the service).

Making off without payment

According to section 3 of Theft Act 1978, a person commits an offence if he, knowing that
payment on the spot for any goods or services is required, dishonestly makes off without
payment with intent to avoid payment.

Actus reus: Making off without payment.

‘Making off’ means making off from the spot where payment was required; McDavitt [1981]

A person will be liable for this offence only if they have made off from the spot where
payment was due.

Mens rea: 1. Dishonesty

2. Knowledge that payment on the spot is required

3. Intention to avoid payment.

However, defendant will not be liable for this offence if the supply of the goods or doing of
the service is contrary to law; S. 3(3) of Theft Act 1978.