The Law on Fraud

Saturday, November 30, 2019 Fraud The law on fraud The Fraud Act 2006 creates a single offence of fraud that can be committed in 3 different ways 1. false representation 2. failing to disclose information 3. abuse of position all these offences are the crime of fraud so there is no need for the prosecution to prove which means was used as long as the jury is satisfied it was one of them. Fraud by false representation S.2(1) Fraud Act 2006 A person in breach of his section if they A. dishonestly make a false representation B. intends by making the representation 1. to make a gain for themselves or another 2. to cause loss to another or to expose another to a risk of loss this form of committing the offence can be broken down into the following elements 1. There must be a false representation Can be made in any way, it will include statements only made orally in writing or on a website Case: Idrees v DPP [2011 EWHC 624 (admin) the court had no difficulty in upholding the conviction of a person who had taken the written part of the driving test, impersonating someone 1 Saturday, November 30, 2019 else. By turning up to the test centre and presenting someone else’s identification they were impliedly claiming to be that person S.2(2) explains that a representation is to be regarded as false if it’s ‘untrue or misleading’ S.2(3) makes it clear the representation can e as to fact or law and it can include a representation as to someone’s state of mind. Problematic cases will arise where a statement is literally true (the car passed its MOT yesterday with no problems) but that isn’t exactly the complete truth (on the way back from the MOT the car broke down) this might be regarded as a statement which is misleading for the purposes of S.2(2) especially if it’s in response to a direct question about how well the car woks It is well established in case law, if a person uses a credit card they are representing not only that the card is theirs but also that they are allowed to use it. Case: Lambie [1982] AC 449 therefore a defendant has been told by their bank not to use the credit card or they have reached their credit limit and ar no longer authorized to use it. As they may be guilty of fraud. The victim will be the shop because they have made a false statement to the shop that they are authorized to use the credit card, the same kind of reasoning applies if the defendant uses a cheque book when unauthorized to do so Case: Gilmartin [1983] QB 953 2. the false representation must be made by the defendant First the representation must be made by the defendant. Example: If Michelle is ware that Liam has lied to Charlie and uses that lie to gain property, she will not have committed fraud by false representation. However she may have committed one of the other versions of fraud. Fraud by failing to disclose information. 2 Saturday, November 30, 2019 the representation must be made. may indicate that representation cannot be made by silence. The matter is not straight forward S.2(4) explains that the representation can be expressed or it can be implied. By acting in a way which impliedly makes a statement may be covered by this version of fraud. Case: Barnard (1837) 173 ER 342 a defendant went to a shop wearing an academic cap and gown of the kind typically worn by members of Oxford University at the time. The shopkeeper assumed he was a member of the university and gave him a discounted price. It was held that by wearing this garb the defendant was representing that he was a member of the university. As he wasn’t this amounted to a false representation. Example: a person walks through a staff entrance of a club, she is representing that she is a member of staff and so this could be deceptive. Less obvious would be a case where a very high price tag was placed on a copy of an old master painting: is the high price tag impliedly stating that the painting is an original? Another point there is no need to show the false representation has been made to anyone. S.2(5) ‘the offence can be committed against a computer or other mechanical representation’ meaning that even if the victim is fully aware that the defendant was lying, the offence would be made out. also means that if the prosecution can prove a defendant sent out a fraudulent email a conviction can be obtained even if the email was never read by any o the would-be victims because it was caught in a spam filter. 3. the defendant must know that the statement is or might be untrue or misleading Required by S.2(2)(b). It is sufficient if the defendant knows that what they are saying might be untrue. 3 Saturday, November 30, 2019 Example: if the defendant is selling their car and untruthfully says that the brakes work fine, then that is untrue and they are aware that the brakes might have problems with them. They will have committed this offence. Case: Augunas [2013] EWCA Crim 2046 Court of appeal emphasis the test is subjective: What is required is that the accused person knows that the representation is or might be misleading. It’s not enough that a reasonable person might have known this; what matters is the accused person’s actual knowledge. In out judgement it’s not good enough for the prosecutor to satisfy the jury that the accused ought to have appreciated that the representation made by him was or might be untrue or seen misleading. Nor is it enough that the circumstances must have given rise to a reasonable suspicion that the reps representation was or might be untrue or misleading. Of course if an accused person wilfully shuts his eyes to the obvious doubts as to the genuine of the misrepresentation that he is making up, the he knows that it might be untrue or misleading and he would be guilty of the offence. 4. the statement must be made with the intention to make a gain or loss Should be emphasized that it doesn’t need to be shown that the defendant made any kind of gain or indeed that the victim suffered any kind of loss. A defendant who made a false statement intending to obtain money would be guilty even if after he has made the statement the victim refused to hand over any money and instead called the police. Fraud has the flavour of an attempted crime that there is no need to show the victim actually suffered direct harm. It must be shown the defendant intended to make a gain by he representation 4 Saturday, November 30, 2019 Case: R v Gilbert [2012] EWCA 2392 ‘Gain’ or ‘loss’ must be in property or monetary terms. using a false representation to injure someone’s feelings or harm their reputation would not on their own amount to the offence. A risk of loss is sufficient. Meaning if the defendant uses a false representation to obtain money which they hoep to repay to the victim soon, this could fall under this offence. If they are aware there is a risk they will not be able to pay back the money, they have committed the offence 5. there must be dishonesty No definition of dishonesty in the Fraud Act 2006 . therefore in the Ghosh test for dishonesty will be used. The government’s explanatory notes concerning the Act say so. S.2 the Theft Act 1968 will not apply. In the circumstance set down there for when a defendant will not be dishonest will not apply. Simester, Spencer, Sullivan and Virgo (2013 : 609) describe the failure to replicate the S.2 defences as ‘regrettable’ Fraud by failing to disclose information S.3 of Fraud Act 2006 A person is in breach of this section if they A. dishonesty fails to disclose to another person information which they are under the legal duty to disclose B. intends by failing to disclose the information A. to make a gain for themselves or another B. to cause loss to another or to expose another to a risk of loss This offence deals with ‘deception by silence’. The offence is only committed when the defendant is under a legal duty to disclose the information. 5 Saturday, November 30, 2019 Key issue will be when a person is under a legal duty to disclose information. The act offered no guidance so the issue must be on of the general law. Will be a legal question and therefore one for the judge rather than the jury. Might require a criminal trial to delve into some complex issues of civil law. The alternative of having one set of rules for disclosure at civil law and another at common law seems an even less attractive option Governments explanatory notes (HM government (2006: para 18) states how the legal duty should be understood. 6