The Fraud Act 2006, repealed and new offences
The Fraud Act 2006 (FA 2006) replaces a number of deception offences under the Theft Acts 1968 and 1978 with a general offence of fraud.
The offences that were repealed on implementation of FA 2006 on 15 January 2007 are:
- obtaining property by deception (TA 1968, s 15);
- obtaining a money transfer by deception (TA 1968, s 15A);
- obtaining pecuniary advantage by deception (TA 1968, s 16);
- dishonestly procuring execution of a valuable security (TA 1968, s 20(2));
- obtaining services by deception (TA 1978, s 1);
- securing the remission of an existing liability to make a payment (TA 1978, s 2(1)(a));
- dishonestly inducing a creditor to wait for payment or to forgo payment with the intention of permanently defaulting on all or part of an existing liability (TA 1978, s 2(1)(b));
- obtaining an exemption from or abatement of liability to make a payment (TA 1978, s 2(1)(c)).
The new offence of fraud under FA 2006 can be committed in one of three ways:
- by false representation (s 2);
- by failing, in breach of legal duty, to disclose information (s 3); and
- by abuse of position (s 4).
The two basic requirements which must be met before any of the three limbs of the new offence can be charged are that:
- the behaviour of the defendant was dishonest; and
- that the defendant’s intention was to make a gain, or cause a loss to another.
Unlike the now defunct offences under the Theft Acts, however, it is no longer necessary to show that a gain or loss has been made, or that a victim was deceived by the defendant’s behaviour.
A representation will be false if it is wrong or misleading, and the person making it knew that it is, or might be, wrong or misleading. The representation can be made to a person but also a machine (eg, a CHIP and PIN machine). ‘Phishing’ emails, which dupe people into handing over their bank details, would be covered by this offence.
Failure to disclose information
To be guilty of this offence, the defendant must have had a legal duty to disclose information and failed to disclose it. Unlike the repealed deception offences, it is irrelevant whether or not anyone is actually deceived or any property actually gained or lost. A doctor who failed to tell a hospital that certain patients referred by him for treatment are private patients, thereby avoiding a charge for the services provided, would fall foul of this offence.
Abuse of position
This offence arises where someone takes advantage of a position where they are expected to safeguard another’s financial interests. As long as dishonesty and an aim to make a loss/cause a gain are present, the offence can be committed by omission or by a positive action. The offence would be committed, for example, where a software engineer uses his employment position to clone software products with the aim of selling them for personal profit.
Each of the three limbs of the offence carries a maximum sentence of 10 years imprisonment.
FA 2006 introduces a number of other new offences, including:
- obtaining services dishonestly (S 11), which replaces the offence of obtaining services by deception under s 15 of TA 1968. This offence is wider than its predecessor as it covers machines as well as humans (eg, someone who attaches a decoder to his TV to allow him to access chargeable satellite services without paying);
- possessing articles for use in fraud (s 6), which replaces the offence of ‘going equipped to cheat’ in s 25 of TA 1968. Lists of other peoples’ credit card details, or software used for producing blank utility bills would be caught by this offence;
- making or supplying articles for use in frauds (s 7), which would cover, for example, those who supply personal financial details for use in frauds to be carried out by others;
- participating in fraudulent business carried on by sole trader, etc (s 9), which applies to sole traders, partnerships, trusts, companies registered overseas, etc – all those not caught by a mirror provision in s 458 of the Companies Act 1985 which applies only to UK companies. An example of fraudulent trading would be a pattern of behaviour by a dishonest builder who consistently inflated bills and charged for work he had not done.