Fraud Flashcards
Fraud
Section 1 Fraud Act 2006
Offences
A person is guilty of fraud - if they are in breach of either:
* Section 2 - Fraud by false representations.
* Section 3 - Fraud by failing to disclose information.
* Section 4 - Fraud by abuse of position.
Common Points
All 3 offences
2 steps
Step 1 — Actus Reus
The defendant carried out the
actus reus of the offence…
(NB the actus reus element
will differ for each offence).
step 2 - Mens Rea
.intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.
When Are The
Offences Complete?
Intent Offences
The offences are complete
once the intent is formed
accompanied by
the actus reus
Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.
Definition Of A Gain
Section 5(3) Fraud Act 2006
Definition Of A Gain
A gain will include either:
* Keeping what you already have; or
* Getting what you do not already have.
Definition Of A Loss
Section 5(4) Fraud Act 2006
Definition Of A Loss
A loss includes either:
* Parting with what you have already got; or
* Not getting what you haven’t already got but
you might get in the future.
What Must The Gain
Or Loss Relate To?
Section 5(2) Fraud Act 2006
2 categories
Category 1
Money
Category 2
Other property that is either:
. Real;
. personal;
*Things in action; or
* Intangible property
Duration Of The Gain
Or Loss?
Duration?
The duration can be either:
*Permanent; or
*Temporary.
Fraud By False
Representations
Section 2(1) Fraud Act 2006
2 steps
Step 1 — Actus Reus
It is an offence to
dishonestly
make a
false representation.
Step 2 — Mens Rea
.and intend
by making the representation
-to cause any of the
3 consequences.
The 3 Intended Consequences
Intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.
Definition Of
Dishonestly
Definition
Same
as the definition
in the context of theft.
Definition Of A
Representation
Representation 1
Representation
as to fact.
Representation 2
Representation
as to law.
Representation 3
Representation
as to the state of mind
- of either:
* The person making the representation; or
* Any other person.
How May The
Representation Be
Made?
2 means…
Means 1
Express
Representations.
Means 1
Implied
representations.
(e.g. by handing over a stolen
credit card to a cashier you
are implying authority to use
the card)
How May The
Representation Be
Communicated?
2 means…
Means 1
Words.
Means 2
Conduct.
Can A Representation
Be Proved By Inference
Without Direct
Evidence Of
Misrepresentation?
Yes
When Is A
Representation
False?
2 steps
A representation is false if both..
Step 1
The representation is either:
*Untrue; or
*Misleading…
step 2
.and the person making the representation -
knows that it:
*Is; or
* Might be;
. -either:
* Untrue; or
* Misleading.
What If The Defendant Honestly
Believed That The Untrue Or
Misleading Representation Was
The Truth?
No offence
When Is The Offence
Complete?
Intent Offences
The offence is complete
once the intent is formed
accompanied by
the actus reus
(i.e. dishonestly
making a
false representation).
Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.
Does The False Representation
Need To Be Heard, Received Or
Responded To?
No
The offence is complete as soon as
the false representation
is dishonestly made
accompanied by the requisite intent.
Posted Emailed False
Representation?
Offence will be complete at the
point of posting / sending with
the intent.
No need to be opened or read.
You Can Deceive A
Machine
Section 2(5) Fraud Act 2006
A representation will be
made where either:
* A representation; or
* Anything implying to be
a representation
…is submitted in any
form - to any:
* System; or
* Device..
. -designed to either:
* Receive;
* Convey; or
* Respond
. .to communications
either with or without
human intervention.
Example
Entering a PIN into a card payment machine
DEFINITION OF DISHONESTY
THE DEFINITION OF DISHONESTY HAS BEEN UPDATED FOR FRAUD OFFENCES ALSO
Please note that the updated test for dishonesty as per the case of Ivey which is covered in the Theft & Related Offences module also applies to the definition of dishonesty in Fraud offences.
Please apply the revised test which is outlined below.
THE HISTORIC PRINCIPLES OF R v GHOSH
If the criteria of section 2 does not assist in determining dishonesty (i.e. none of the 3 beliefs are present) – historically the judge used to apply the 2 stage test derived from the case of R v Ghosh [1982] QB 1053:
STEP 1 - OBJECTIVE LIMB
Whether what was done was dishonest according to the ordinary standards of reasonable and honest people?
If the jury decide no – the jury must acquit.
If the jury decide yes – the jury will proceed to step 2.
STEP 2 - SUBJECTIVE LIMB
Whether the defendant realised by the standards of a reasonable and honest person - that what they were doing was dishonest?
If the jury decide no – the test would fail at the second hurdle and the jury must acquit.
If the answer is yes - then the defendant will have behaved dishonestly.
LEGAL UPDATE - THE SECOND STEP OF R v GHOSH HAS NOW BEEN REMOVED
Ivey (Appellant) v Genting Casinos (UK) Ltd t/a Crockfords (Respondent) [2017] UKSC 67 On appeal from [2016] EWCA Civ 1093
The Supreme Court in Ivey has updated the test in R v Ghosh – and has removed the second step of the test – to bring the test in line with that used in civil cases.
The Supreme Court held that the second leg of the rule adopted in R v Ghosh had serious problems, as the less a defendant’s standards conform to society’s expectations, the less likely they are to be held criminally responsible for their
behaviour.
The law should not excuse those who make a mistake about contemporary standards of honesty, a purpose of the criminal law is to set acceptable standards of behaviour.
The test is now that used in civil actions – i.e. just step 1 (above).
The fact-finding tribunal must ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts and then determine whether their conduct was honest or dishonest by the (objective) standards of ordinary decent people.
There is no longer a requirement to prove that the defendant must appreciate that what they have done is, by those standards, dishonest.
Fraud By Failing To
Disclose Information
Section 3 Fraud Act 2006
2 steps
Step 1 — Actus Reus
An offence will be committed
when a person dishonestly
fails to disclose
to another person
information that they are
under a legal duty to disclose..
step 2 - Mens Rea
.and intend
by failing to disclose
the information
-to cause any of the
3 consequences.
The 3 Intended Consequences
Intending to either:
* Make a gain for themselves or another
person;
* Cause loss to another person; or
* Expose another person to a risk of loss.
The Basis Of The
Legal Duty To
Disclose Information
- Statute.
- A transaction in good faith.
- Express contractual terms.
- Implied contractual terms.
- Trade customs.
- The existence of a fiduciary relationship.
Awareness Of The
Legal Duty
Awareness Is Required
It is necessary to prove
that the defendant knew
that they were under a legal duty
to disclose the information.
When Is The Offence
Complete?
Intent Offences
The offence is complete
once the intent is formed
accompanied by
the actus reus
(i.e. dishonestly
failing to disclose to another person
information that they are
under a legal duty to disclose).
Is The Result Of Gain Or Loss
Required?
No
-there is no need
for the result
of gain or loss to occur.
Example 1
Failing to disclose to an insurance company:
* A relevant medical condition when applying for life
Insurance cover; or
* Motoring convictions when applying for motor
insurance.
Example 2
Failing to disclose income
when claiming
means tested benefits
from the welfare system.
Fraud By Abuse Of A
Position
Section 4(1) Fraud Act 2006
Who Can Commit
The Offence?
Offender?
Any person who occupies a position in which
they are expected to either:
* Safeguard the financial interests of another
person; or
* Not act against the financial interests of
another person.
Relationships That
Generate Positions
- Family relationships.
- Work relationships.
- Trustees and beneficiaries.
- Client relationships.
- Voluntary sector relationships
