Fraud

The Fraud Act 2006 has replaced the deception offences by one basic fraud offence which can b
committed in three ways. These are by:

1. False Representation
2. Failure to disclose information
3. Abuse of position

False Representation (S2):

Actus Reus:
It requires proof that D made a representation and that representation was false, there was no need to
prove that the victim acted to their detriment (were harmed etc in any way) in reliance on the
representation. Also there is no need for it to be communicated as long as it is made. For instance a
phisher commits an offence as soon as he sends out the false statement and does not have to wait until
the email is transmitted.
 • Representation does not have to be in words- it can be by conduct as well (painting over rust on
a damage car). The simplest meaning is then stating, creating an impression or making out
something.
➢ DPP v. Ray: D left the Wing Wah restaurant without paying for his meal. When the meal
was ordered D intended to pay for it. After eating it, D changed his mind and decided to
leave without paying for it. D waited for the waiter to leave the room (about 10
minutes) and then ran off from the restaurant, and hid when the police were called. D
argued that he had not, by words or conduct, made a false representation. It was held
that D had made a false representation by conduct.

• One cannot make a false representation by doing nothing. For instance if A sells B a car, the
odometer of which he knows carries a false reading, he would not be guilty of fraud as he has
made no false representation as to the mileage. He could have been guilty if upon being asked
he confirmed the reading.
• Representation by silence:
➢ Duty of disclosure: If you are under a duty of disclosure and you fail to disclose, one can
constitute a false representation.
➢ Where the circumstances change so that the original representation no longer
accurately describes the true state of affairs.
• Representations and machines: S2 (5):
➢ Putting false information on an online tax or insurance form
➢ Computer phishing such as placing viral sob stories on the internet which cause naïve
recipients to transfer money to the phishers. As soon as the representation is typed, it
constitutes fraud- the prosecution does not have to prove that it has been read by
anyone.

Mens Rea:

1. Intention:

The defendant has an intention to make a gain for him or another; or to cause a loss to another or to
expose another to the risk of loss. Intention here means purpose or knowledge of virtual certainty and is
a matter of law.

Gain and loss have been defined in S5:

➢ They only extend to gain or loss in money or property (real or personal including things in action
and other intangible property)
➢ Can be temporary or permanent
➢ Gain includes a gain by keeping what one has as well as a gain by getting what one does not
have.
➢ Loss includes a loss by not getting what one might get as well as a loss by parting with what one
has.
 2. Dishonesty:

No definition in the Fraud Act 2006. R v. Ghosh is the leading case: Was what was done dishonest
according to the ordinary standards of reasonable and honest people? And did the defendant realize
that reasonable and honest people would regard what he did as dishonest?

Fraud by failing to disclose information (S3):

Actus Reus: the defendant needs to be under a legal duty of disclosure and he fails to disclose such
information. Such a duty can arise from:

➢ A statute
➢ Contracts of utmost good faith
➢ Express or implied terms of the contract
➢ Custom of a particular trade or market
➢ Existence of a fiduciary relationship between the parties

Mens Rea: Same as S2 i.e. dishonesty and intention to make a gain for oneself or another; or
intending to cause a loss to another, or exposing someone to the risk of loss.

There is no requirement that the defendant be aware that they are under such a duty although lack of
awareness will influence the jury’s assessment of dishonesty.

Fraud by abuse of position (S4):

• Here a person occupies a position in which he is expected to safeguard or not to act against the
financial interests of another person. Such a question is a question of law. Such relationships
include:
➢ Trustee and beneficiary
➢ Director and company
➢ Professional person and client
➢ Agent and principal
➢ Employee and employer
➢ Within family
➢ Voluntary work
• Also if A permits B to use her apartment while she is holiday, B would abuse his license if he
were to use the apartment to deal in drugs or sell weapons from.
• He dishonestly abuses this position AND
• He intents by that abuse to make a gain for himself or another, or intends to cause a loss to
another, or exposes someone to the risk of loss.
 • There is no requirement that the defendant be aware that they are under such a duty although
lack of awareness will influence the jury’s assessment of dishonesty.
• He can abuse his position even via an omission.

Obtaining services dishonestly S11:

This covers any case where services, for which payment would be expected, are obtained as a result of
dishonest conduct. The section makes it clear that only services made available on the basis that
payment has been, is being or will be made for or in respect of them are covered.

Mens Rea: The offence requires Ghosh dishonesty, knowledge that payment is required or might be,
and an intention not to pay for the service or not to pay in full.

Making off without payment- S3 of the Theft Act 1978:

A person who, knowing that payment on the spot for any good supplied or service done is required or
expected from him dishonestly makes off without having paid as required or expected, and with intent
to avoid payment of the amount due shall be guilty of the offence.

Actus Reus:

Making off does not require any particular form. A person can make off when he slips out of the
restaurant or honk his car’s horn without paying for the petrol. A problem arises in cases where a
customer dupes the creditor in allowing him to go by pretending to have left his wallet at home. This is
not seen to be making off but will constitute a making off if it is difficult for the defendant to be traced.
Thus if he leaves a dud cheque as payment with his name and address or if he is well known to the
creditor, the offence will not be committed.

• The defendant has to depart from the spot at which the payment is due or expected:
➢ McDavitt: The defendant was apprehended in a restaurant making for the door. The
spot where payment was due was held to be the restaurant. Since he had not quit the
restaurant, he could only be guilty of an attempt.
➢ Moberly v. Alsop: The defendant had traveled on a train without paying for the ticket.
He was apprehended, having gone through the ticket barrier, and charged with making
off without paying. The spot where payment was due was held to include not only the
place where D should have paid but also the spot where D should have later made good
his default. As he had made off from the latter spot i.e. the ticket barrier, the offence
could be committed.
• Payment for goods supplied or services done:

The offence is constituted upon the successful completion of the creditor’s part of the bargain, whether
the supply of goods or the provision of services.
According to S3 (3), the offence is not committed where payment would not be required or expected
due to the other’s breach of contract or if the supply of goods or services was contrary to law. It would
then not be an offence for a punter to make off without paying a prostitute.

➢ Troughton v. Metropolitan Police: D took a taxi home. Being drunk he had not told the driver
his full address. The driver stopped to obtain directions and D accused the driver of making an
unnecessary diversion. The taxi driver drove to the nearest police station. It was held that the
journey was not completed and the taxi driver had breached the contract. The offence of
"making off" requires the payment to be legally enforceable. Therefore, the taxi driver was
unable to demand the fare after he had diverted from the proper route to D's destination.

• Without having paid as required or expected:

The offence is only constituted if the defendant makes off knowing that payment on spot is required or
expected.

➢ R v. Vincent: If the defendant deceives the creditor into agreeing to postpone payment of the
bill, the offence is not committed since the creditor’s agreement means that D is not required or
expected to make payment.

Mens Rea:

• Dishonesty
• Intention to avoid payment of the amount due
➢ R v. Allen: Liability requires proof of an intention permanently to avoid paying the amount due.
So a hotel customer who checked out without paying would not commit the offence if he was
temporarily financially embarrassed and intended to pay later.

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