Fraud MCQs Flashcards
With regard to an offence of fraud by failure to disclose, which one of the following statements is the most accurate?
A defendant may be liable for an offence of fraud by failure to disclose even if he has fulfilled a civil law duty to disclose information
A defendant must intend that the loss in terms of property or money which he causes is suffered by the person to whom the duty is owed
A corporation may be liable for an offence of fraud by failure to disclose when an obligation is imposed by law on the corporation
For an offence of fraud by failure to disclose, the jury will decide whether a legal duty to disclose arises
The defendant must be a ‘person’ who is under a legal duty to disclose information to another ‘person’, the definition of which does not extend to a ‘legal’ person such as a corporation
A corporation may be liable for an offence of fraud by failure to disclose when an obligation is imposed by law on the corporation
Correct. Although the term ‘person’ is not defined, there is nothing in the Act to prevent a corporation being liable for a failure to disclose where there is a legal duty imposed on it to disclose and, by analogy, to be the ‘person’ to whom the duty is owed. Review your materials on the statutory provisions
A boy really wants to become a scout. However, the scout group in the area where he lives is full, with a long waiting list. The boy’s mother fills in the application form for a scout group in a neighbouring area, giving his address as her sister’s house which is in that area.
Has the mother committed an offence of fraud by false representation?
The mother will not have committed fraud by false representation as she does not intend to make a gain for herself, she intends to make a gain for her son.
The mother will only have committed fraud by false representation if the boy gets a place in the scout group in the neighbouring area.
The mother will not have committed fraud by false representation as there is no intent to gain or cause loss by her false representation.
The mother will only have committed fraud by false representation if the scout group she has applied to restricts entrance to children from a specified area and the jury decides she is dishonest.
The mother will only have committed fraud by false representation if the jury decides she is dishonest.
The mother will not have committed fraud by false representation as there is no intent to gain or cause loss by her false representation.
Correct. Section 5(2)(a) states that the gain or loss must be in money or other property. The mother does not intend to make such a gain or cause such a loss.
The other answers are incorrect because they do not make this point.
The gain or loss must be in money or other property, whether real or personal.
It is not necessary that the gain be for the person making the false representation. The defendant must intend to make a gain for themselves or another or cause loss to another.
There is no requirement that the mother’s false representation achieves what she wishes to gain i.e. it doesn’t matter whether the scout group restrict entrance to children from a specified area or whether son gets a place in the neighbouring scout group or not. All that is required is that the mother intended to make a gain, even if no such gain arose.
The mother has not committed a fraud in these circumstances, but a possible lack of dishonesty is not the reason why.
A hairdresser runs a small business from a converted garage at her home. She gives her clients that are over 65 years old a 25% reduction. One day she sees an article about one of her clients in a newspaper. She discovers that her 85-year-old client, whose hair she has been doing for 15 years, is extremely rich. The next time that client comes to have her hair done, the hairdresser charges the client the full price, saying she is no longer giving a 25% reduction for those over 65 years old. This is untrue.
Which of the following best explains the hairdresser’s criminal liability for fraud?
The hairdresser will be liable for fraud by false representation because she has lied, she is therefore dishonest.
The hairdresser will be liable for fraud by false representation if she is found to be dishonest.
The hairdresser will be liable for fraud by abuse of position because she has lied, she is therefore dishonest.
The hairdresser will be liable for fraud by abuse of position because she occupies a position where she would be expected to safeguard or not act against the client’s financial interests.
The hairdresser will not be liable for a fraud offence.
The hairdresser will be liable for fraud by false representation if she is found to be dishonest.
Correct. This best explains the hairdresser’s criminal liability for fraud as she has clearly made a false representation with an intention to make a gain in money terms (the increased payment). The false representation is that she is no longer giving a 25% reduction.
Her liability for fraud by false representation will hinge on dishonesty. Just because she has lied does not make her dishonest, see R v Clarke. A jury may find her not to be dishonest on the Ivey v Genting Casinos test in these circumstances.
Fraud by abuse of position is unlikely to apply as, although the hairdresser and the client have a long relationship and the client probably trusts her, this relationship concerns nothing of a financial safeguarding nature. It is by no means certain that she occupies the position required for fraud by abuse of position – that she would be expected to safeguard or not act against the client’s financial interests. Whether such a relationship is capable of arising on the facts is a question for the judge to decide on a case by case basis then the jury determine if they are sure that was case. See R v Valujevs and another.
A woman lost her job and claimed benefits. Later, she acquired well-paid employment. She did not inform the benefits office of her new income, so the benefits continued to be paid into her bank account. She did not spend the continuing benefits as she is saving them for a deposit for a house.
Which of the following best describes the woman’s liability for fraud?
The woman will be liable for fraud by failure to disclose information which she was under a legal duty to disclose.
The woman will be liable for fraud committed by abusing the position she occupied in which she was expected to safeguard or not act against the financial interests of any other person.
The woman will not be liable for fraud by failure to disclose until she spends the money paid into her account after she gained her new employment.
The woman will be liable for fraud by false representation as she has made an implied representation by conduct that she is still unemployed.
The woman will be liable for fraud by false representation, failure to disclose and abuse of position.
The woman will be liable for fraud by failure to disclose information which she was under a legal duty to disclose.
Correct. The facts of this case are very similar to those in R v Mashta. The answer reflects the wording of s 3 Fraud Act 2006 which is committed where a defendant dishonestly fails to disclose to another person information which he/she is under a legal duty to disclose. The woman fails to inform the benefits office of her employment, which she is legally required to do. She is dishonest and intends to make a gain for herself by keeping the money she has received.
The other answers are incorrect.
The actus reus of fraud by failure to disclose is committed as soon as she obtains the new job and fails to inform the benefits office of her employment.
She does not occupy a position in which she is expected to safeguard or not act against the financial interests of any other person for the purposes of fraud by abuse of position.
The case of R v Twaite suggests that pure silence, without an accompanying action, as in Idrees v DPP, cannot amount to a representation for the purposes of fraud by false representation.
A man applies for car insurance and fails to put on the form that he made a large claim from the Motor Insurance Bureau. The Motor Insurance Bureau is an organisation which pays out money on behalf of uninsured drivers and the man’s claim arose after an uninsured drunk driver crashed into the man’s parked car.
Which of the following explains the man’s liability for fraud by failing to disclose information he is under a duty to disclose?
The man will not be liable if he believes that the previous claim does not make him more likely to make a future claim
He will not be liable as the insurance contract is invalid due to his failure to mention the claim, so the insurance company will not suffer any loss
He will not be liable if the insurance company would have kept his premium the same if they knew about the previous claim
The man may not be liable as a jury may find him honest if he believes that the previous claim does not make him more likely to make a future claim
The man will not be liable as the previous claim does not make him more likely to make a future claim
The man may not be liable as a jury may find him honest if he believes that the previous claim does not make him more likely to make a future claim
Correct. Although the actus reus aspect of the offence is made out in that he has failed to disclose information which he is under a duty to disclose, the mens rea of the defendant is less clear. The man’s knowledge and beliefs will be considered by the jury when applying the test in Ivey v Genting Casinos and deciding whether he is dishonest by the standards of ordinary decent people and he might be found not to be dishonest. He does have an intent to gain money (a reduced insurance premium) by his omission, which is presumably why he did not put it on the form.
The other options are incorrect or not the best answer.
Just because the man believes that the previous claim does not make him more likely to make a future claim, doesn’t mean that the jury will agree and find him honest.
The defendant must intend to make a gain for himself or another, or to cause loss to another. It is not necessary to show any gain or loss in fact. Whether in fact the previous claim does not make him more likely to make a future claim is irrelevant.
There is no need for a causal link between the failure to disclose and the gain or loss of money or property. Whether the insurance company would have kept his premium the same if they knew about the previous claim is irrelevant. It would also be irrelevant if the insurance contract was invalid due to his failure to mention the claim, for the same reason.
