Criminal Law: Fraud Act 2006 Offences

Fraud Act 2006 Offences

Section 1: Fraud

Establishing the Offence

Section 1 of the Fraud Act 2006 provides that a person commits fraud if they are in breach of sections 2, 3 or 4 of the Act. These will each be looked at separately.

Common Elements of All Three Types of Fraud

Some concepts apply across the different types of fraud:

Dishonesty
Dishonest man phone call

The defendant’s conduct is dishonest if ordinary and honest people, knowing or believing the circumstances to be as the defendant knew or believed, would consider it dishonest: Ivey v Genting Casinos [2017] UKSC 67.

Gain
Expensive tiara

A gain refers to monetary or property gains (real, personal and things in action), whether temporary or permanent: s 5(2). It includes gains acquired by keeping what one has and getting something one doesn’t have: s 5(3).

Loss
Loss, damaged floor

A loss refers to monetary or property loss (real, personal and things in action), whether temporary or permanent: s 5(2). It includes losses caused by not getting what one might have gotten, as well as parting with what one has: s 5(4).

Section 2: Fraud by False Representation

The defendant commits fraud by false representation if he dishonestly makes a false representation, intending by doing so to make a gain for himself or another or to cause loss to another or expose another to the risk of loss: s 2(1).

Falsity
False hand writing, letter

A representation is false if it is untrue or misleading and the defendant knows it is, or might be, untrue or misleading: s 2(2). A misleading statement is likely one which is strictly and literally true, but conceals relevant information. For example, if a person asks a shopkeeper whether their fruit are fresh and the shopkeeper responds that they are sourced from local farms, this would be misleading if the fruit had nevertheless sat in storage for months.

Belief, thumbs up, deceit

There is no requirement that anyone actually be deceived by or act on the representation: Proctor v The Chief Constable of Cleveland Police [2017] EWCA Crim 1531. If the defendant believes the statement to be false but it is in fact true, he may still be convicted of attempted fraud: R v Cornelius [2012] EWCA Crim 500.

If the defendant makes a statement which is partially true and partially untrue, this will still be a false representation. However, the prosecution will need to show that the defendant intended to make a gain, cause a loss or expose another to the risk of loss at least in part by using the false part of the statement: R v Gilbert [2012] EWCA Crim 2392.

Representations
Communicating by email

Relevant representations include statements of fact, law or those relating to the defendant’s state of mind or the state of mind of any other person: s 2(3). They can be express or implied: s 2(4). Conduct which communicates information may suffice: R v Barnard (1837) 7 C&P 784. It is not clear whether a pure opinion (one not based on facts at all) can be a false representation, though under the old law it could not be: R v Bryan (1857) Dears & B 265.

Misconception, mystery, lies

It is not a representation to fail to correct a misconception that the victim is labouring other when the defendant has done nothing to induce it, though such behaviour may fall within the scope of section 3 instead. The same is true where the defendant has made a true representation which, due to changing circumstances, later becomes false: Government of the United Arab Emirates v Allen [2012] EWHC 1712.

For example, offering a stolen cheque as payment involves several implicit representations: R v Gilmartin (1983) 76 Cr App R 238. For example, it implies that the defendant has authority to draw money on the account the cheque is drawn from.

It is not clear whether the representation is made if it is not successfully communicated to anyone, such as where an email is sent but never read or a letter is posted but never arrives.

Knowledge

Knowledge requires subjective true belief, and it is not enough that a reasonable person would have known the representation is false: R v Augunas [2013] EWCA Crim 2046. Constructive knowledge or negligence is insufficient: Flintshire County Council v Reynolds [2006] EWCA Crim 2046

Section 3: Fraud by Failure to Disclose

The defendant commits fraud by failure to disclose if they dishonestly fail to disclose information to another person when they are under a legal duty, intending by this to make a gain for himself or another, or to cause another a loss, or to expose another to the risk of loss: s 3(1).

The statute does not state when a legal duty arises. Such duties may be statutory, derive from contract or fiduciary duties, or some other artefact of civil law (whether contractual, equitable, tortious or restitutionary): R v Razoq [2012] EWCA Crim 674. The prosecution must show that the defendant failed to meet their obligations under the duty: R v Forrest [2014] EWCA Crim 308.

It is not clear whether the defendant must be aware that they are subject to a duty.

Section 4: Fraud by Abuse of Position

The defendant commits fraud by abuse of position if they occupy a position in which they are expected to safeguard, or not act against, another person’s financial interest, and they dishonestly abuse this position intending to make a gain for themselves of another, or to cause another a loss, or to expose another to the risk of loss: s 4(1). A defendant can commit this offence by omission as well as by an act: s 4(2).

The meaning of a ‘position’ is unclear. It almost certainly includes all fiduciary duties (such as trustees and companies directors), but also appears to go beyond this. The government, when passing the law, suggested that it might also apply where the defendant is given access to the victim’s property, for example. It appears that it also enough that the defendant has taken responsibility for collecting and distributing wages, even where a fiduciary duty does not exist: R v Valujes [2014] EWCA Crim 2888.

A position is abused if it is used incorrectly or improperly: R v Pennock [2014] EWCA Crim 598.


Section 6: Possessing Articles for Fraud

Establishing the Offence

The actus reus of the section 6 offence is possessing or controlling any article: s 6(1).

The mens rea of the section 6 offence is intention that the article be used in a future fraud (though there is no need to show he had a specific fraud in mind): R v Sakalauskas [2013] EWCA Crim 2278.

‘Any Article’

As well as physical objects, the meaning of ‘article’ under the Fraud Act 2006 includes any programs or data held in electronic form: s 8(1). It is not necessary that the article only has illegal uses: R v Nimley [2010] EWCA Crim 2752.

‘Possession or Control’

A person possesses an article if they can access and control it, even if another person physically holds the item: R v Montague [2013] EWCA Crim 1781. The meaning of ‘control’ is undefined but is thought to be some lesser state than possession.

It is likely that they must also know that they can access and control it to possess something, by analogy with the drug possession cases, but need not know what exactly the article is: Warner v Metropolitan Police Commissioner [1969] 2 AC 256. It would be difficult to establish the mens rea if the defendant did not know the nature of the article, however.


Section 7: Making/Supplying Articles for Fraud

Establishing the Offence

The actus reus of the section 7 offence is making, adapting, supplying or offering to supply any article: s 7(1).

The mens rea of the section 7 offence is established if the defendant (a) knows that the article is designed or adapted for use in the course of or in connection of fraud, or (b) intends that the article be used to commit or assist in the commission of fraud: s 7(1).


Section 11: Dishonestly Obtaining Services

Establishing the Offence

The actus reus of the section 11 offence is doing an act which obtains for himself or another services for which payment is or will become due, without paying for them in full: s 11(1)-(2).

The mens rea of the section 11 offence has two elements. Firstly, the defendant must be acting dishonestly. Secondly, the defendant must know the services are (or might be) being provided in return for payment, and intends that payment will not be made (in full or otherwise): s 11(2)


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Criminal Offences Against Property Quiz

Test yourself on the principles governing the offences against property.

1 / 50

When does a person 'possess' property for the purposes of theft?

2 / 50

Paul knowingly makes a statement to Joanne, believing it to be false and attempting to fool Joanne into giving him money. She hands over the money. The statement just happens to be true. Has Paul committed an offence?

3 / 50

Theresa is trying to break into a building. She uses a screwdriver to break a window, and during this process the screwdriver enters the building, but no part of Theresa's body does. For the purposes of establishing burglary, has Theresa entered the building?

 

4 / 50

The defendant borrows the victim's month-long movie pass, intending to give it back after it has expired. Is is possible to convict the defendant of theft?

5 / 50

Which of the following three structures could constitute a building for the purposes of the burglary offence?

6 / 50

When establishing the offence of blackmail, the prosecution must show that:

7 / 50

For the prosecution to prove robbery, must there be an assault?

 

8 / 50

For the purposes of theft, is it possible to appropriate an object without acquiring control over it or physically interacting with it?

 

9 / 50

Marcus steals a car from Robert, who later manages to recover it. It is stolen again by Yula. Yula is caught immediately and charged with handling stolen goods, but her lawyer argues that the goods are no longer stolen. Will this argument succeed?

10 / 50

For the purposes of theft, can a defendant be convicted for stealing property he owns?

 

11 / 50

Can a defendant be convicted of destroying or damaging property with intent to endanger life if no-one's life is actually endangered?

 

12 / 50

For the purposes of theft, is there an appropriation if as part of the appropriating act the defendant acquires indefeasible property in the object?

 

13 / 50

Liza purchases a car from Ricky, not realising or suspecting that it is stolen. Has she 'appropriated' the car?

 

14 / 50

Katy makes a false statement to Arnau, believing it to be true and trying to persuade Arnau to give her money. It would be obvious to a reasonable person that the statement was false. Has Katy committed fraud by false representation?

 

15 / 50

What additional element must the prosecution show to establish aggravated burglary (as opposed to normal burglary)?

16 / 50

Rachel owns a house which she rents out to young families. There is no one living in it at the moment as she is having the kitchen renovated. During the period in which the house is empty, it is burgled by John. Is the building a dwelling?

 

17 / 50

Paul knowingly makes a statement to Joanne, attempting to get Joanne to give him money. The statement is true and Paul believes it is true, but later it becomes false and he discovers this. Joanne hands over the money after Paul has discovered the fact is now false. Has Paul committed fraud by non-disclosure?

 

18 / 50

For the purposes of theft, is there an appropriation if the defendant has the owner's permission to interact with the property?

19 / 50

For the purposes of blackmail, what is 'menaces'?

20 / 50

When establishing fraud by false representation, the prosecution must show that the victim was deceived by the false representation. True or false?

 

21 / 50

Roger learns that his brother Richard is being deported. He knows that the moment Richard lands in his home country, he will be murdered by corrupt government officials. Roger intentionally damages the plane that was set to deport Richard, giving Richard time to succeed in his asylum appeal. When charged with criminal damage, Roger argues he has lawful excuse, the government was acting in breach of international law by deporting Richard. Will this argument succeed?

 

22 / 50

To establish the mens rea of burglary, the prosecution must show that:

23 / 50

For the purposes of the offence of threats to destroy or damage property, must the victim interpret the defendants actions as a threat?

 

24 / 50

When is a defendant dishonest?

25 / 50

Paul knowingly sends a letter to Joanne, containing a statement which he believes to be false and attempting to fool Joanne into giving him money. The letter never arrives. Has Paul committed fraud by false representation?

 

26 / 50

Lauren steals a car from Celestine and sells it to Ricky, who is unaware the car is stolen. Ricky then sells and gives the car to Julie, who does know the car was originally stolen from Celestine. Has Julie committed the offence of handling stolen goods?

27 / 50

The prosecution is seeking to establish the offence of burglary. For the purposes of showing that the defendant entered the building, the prosecution must show that the defendant was sufficiently within the building to commit the offence. True or false?

 

28 / 50

Which four factors are relevant to whether the property has been 'damaged' for the purposes of criminal damage?

29 / 50

The defendant borrows the victim's wedding ring, and loans it to a pawn store. He intends to pay the loan off and get the ring back, at which point he will return it. Is it possible to convict the defendant of theft?

30 / 50

For the purposes of the offence of possessing articles for fraud, the article must have only illegal functions. True or false?

 

31 / 50

Lauren asks Raphael to burn some books she has in a compost bin in her back garden. Stephen goes to the garden, and realises that if he does so the fire is likely to spread in a way which would endanger the lives of some children playing next door. He does it anyway. When he is charged with criminal damage with intent to endanger life, he argues that he had a lawful excuse because he had the consent of the owner of the books to burn them. Will this argument succeed?

 

32 / 50

Elsie steals a necklace from a store, and exchanges it for a bicycle. Is the bicycle stolen?

 

33 / 50

Theresa enters Richard's house, intending to steal his jewellery. Once inside, she becomes concerned that Richard may still be in the building so she picks up a knife from the kitchen. Should Theresa be charged with ordinary burglary or aggravated burglary?

34 / 50

Does a defendant who borrows an object intend to permanently deprive the owner?

 

35 / 50

The defendant dishonestly tricks the victim into writing him a cheque. The defendant provided consideration. The defendant has taken the cheque but not cashed it. What has the defendant stolen?

36 / 50

A person is accused of fraud by abuse of position. What position must the prosecution demonstrate the person occupied to establish the offence?

37 / 50

For the purposes of theft, can there be an appropriation if the victim does not lose anything?

 

38 / 50

For the purposes of the Theft Act offences, when is a piece of property 'appropriated'?

39 / 50

Margaret shoots a gun at Robert, intending to kill him. She misses and destroys a window. Could she be successfully prosecuted for destroying the property with intent to endanger life?

 

40 / 50

For the purposes of the fraud offence, when is a statement false?

41 / 50

In which three circumstances specified by the Theft Act 1968 will a defendant not be considered dishonest?

42 / 50

For the purposes of the offence of possessing articles for fraud, the defendant does not need to physically possess the article. True or false?

 

43 / 50

Theresa enters Richard's house, intending to steal his jewellery. Once inside, she encounters Richard, and panics, picking up a nearby knife. Should Theresa be charged with ordinary burglary or aggravated burglary?

44 / 50

For the purposes of the offence of possessing articles for fraud, the prosecution must prove the defendant had a specific future fraud in mind. True or false?

 

45 / 50

What is the mens rea of criminal damage?

46 / 50

Can a pure opinion be a representation for the purposes of fraud?

 

47 / 50

Harold decides to steal from Richard's house. He is let into the building by Richard's daughter Yula, who is in love with him. Yula lives in the house, but does not own or occupy it. Can Harold be convicted of burglary?

48 / 50

Michael threatens Adrian that he will reveal sensitive information if Adrian does not have sex with him. Has Michael committed blackmail?

49 / 50

Roger intentionally damages a piece of government property (a coal-burning oven) while protesting climate change. When charged with criminal damage, he argues he has lawful excuse, because climate change is destroying the planet and he needs to draw attention to the issue. Will this defence succeed?

 

50 / 50

Paul knowingly makes a statement to Joanne, attempting to get Joanne to give him money. The statement is true and Paul believes it is true, but later it becomes false and he discovers this. Joanne hands over the money after Paul has discovered the fact is now false. Has Paul committed fraud by false representation?

 

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