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Fraud exam revision guide
Introduction
The offence of fraud can be committed where the defendant dishonestly makes a false
representation intending to make or gain or a loss to another
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Fraud can also be
committed, where the defendant dishonestly fails to disclose information which he is
under a duty to disclose, intending to make a gain or cause loss to another
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There is an offence of obtaining services by a dishonest act
and also of making off without payment from a place where payment is expected
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Fraud by false representation
Section 2 (1) of the Fraud Act 2006 states: A person is in breach of this section if he - (a)
dishonestly makes a false representation, and (b) intends, by making the representation (i) to make a gain for himself or another, or (ii) to cause loss to another or to expose
another to a risk of loss
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In Idrees v DPP (2011), the court
upheld the conviction of a person who had taken the written part of the driving test,
impersonating someone else
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Section 2 (2)
explains that a representation is to be regarded as false if it is ‘untrue or misleading’
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It is established in case law that
if a person uses a credit card they are representing not only that the card is theirs but
also that they are authorised to use it - Lambie (1982)
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(the victim will be the
shop because they have made a false statement to the shop that they are authorised to

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use the credit card - the reasoning applies to use cheque book unauthorised - Gilmartin
(1983)
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However, its not straightforward
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In the case of
Barnard (1837), a defendant went into a shop wearing an academic cap and gown of
the kind typically worn by members of Oxford University at that time
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It was
held this garb the defendant was representing that he was a member of the Uni
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A final point to notice, is that there is
no need to show that the false representation need be made to anyone
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Also it means that even if the victim was
fully aware that the defendant was lying, the offence would be made out
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• The defendant must know that the statement is or might be misleading - this is

required by section 2 (2) (b)
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In Augunas (2013), the court of appeal emphasised the test is a
subjective one: ‘what is required is that the accused person knows that the
representation is, or might be misleading
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In our
judgment, it is not good enough for the prosecutor to satisfy the jury that the accused
ought to have appreciated that the representation made by him was or might be untrue
or misleading, nor is it enough that the circumstances must have given rise to a
reasonable suspicion that the representation was, or might be, untrue or misleading
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’
• The statement must be made with the intention to make a gain or a loss - it does not

need to be shown that the defendant made any kind of gain or that the victim suffers
any kind of loss
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In a way, therefore, fraud has the flavour of an
attempted crime in that there is no need to show the victim actually suffered direct
harm
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Gain or loss must be in property or monetary terms
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In Gilbert (2012), the defendant lied in order
to open a bank account
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It was true there were
suspicious he would use the account to make gains, but that was too remote a gain for
the offence to be made out
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This
would mean that if the defendant uses a false representation to obtain money which he
hopes to repay to the victim soon, this could fall under this offence
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• There must be dishonesty - there is no definition of dishonesty in the Fraud Act 2006
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However, section 2 of the Theft
Act 1968 will not apply
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David Ormerod sets out issues raised by false representation in ‘The
Fraud Act 2006 - criminalising lying? (2007) Criminal Law review
Section 2 - fraud by false representation of the Act, is the broadest form of the fraud
offence and hence likely to be the most frequent charge used
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Classic examples of conduct caught will be false
representations on mortgage application forms, life insurance forms
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It is worth emphasising how
dramatic is the shift from a result-based deception to a conduct-based representation
offence
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2, there is no need to prove a result of any kind or that an alleged victim
or indeed any person believed any representation or acted on it; or, crucially, that the
accused succeeded in making a gain or causing a loss by his representation
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The new
offence has no requirement that victim’s property interests are damaged (temporarily or
permanently), nor even that victim’s property interests are imperilled; it is sufficient that
defendant intends to cause loss or make a gain
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This wholly inchoate offence appears to criminalise lying
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Classic
definitions such as that from Stephen J
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The absence of any loss direct or potential to victim’s interests may make the evaluation of
the degree of blameworthiness and appropriate punishment very difficult
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2
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This shift has serious practical implications
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In some instances, s
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2
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A further effect is that victim, formerly cast in a
leading role in proving the casual effect of defendant’s deception now becomes an
optional extra
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No doubt prosecutors will still commonly prefer to
call a victim to testify about the circumstances of the representation, but technically, all
that matters is that defendant acted with the intention to gain or cause loss; the potential
effect of the false representation need not be proved
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S
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Making a representation must be made expressly or implied - section 2 (4)
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3
criminalises fraud by failing to disclose, but is limited to circumstances where defendant is
under a “legal duty” to disclose information; a broad reading of s
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Four possibilities need considering
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2 irrespective of victim’s belief
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3 if he is under a legal duty to correct victim’s error
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if so he is liable
under section 2
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The broad nature of this element means that the scope for a charge of attempt is severely
limited, except where defendant, having prepared documents containing false

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statements, is apprehended before having posted them, or where defendant unwittingly
makes a true representation
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2
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The crown must establish that the
representation is false or misleading in addition to proving defendant’s knowledge as to
its falsity, which usually depends on the meaning intended or understood by the parties
and will usually be a question for the jury, even with documented representations
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The concept of falsity is central to s
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This fails to promote certainty in an area where experience teaches us it is vital
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” That opens a wide scope of
liability, by advancing a very wide definition of “false”, to include “misleading”, the Home
Office eschews the finer moral distinctions between lying and misleading
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Unless s
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False representations and machines (professor Ormerod explains that the new offence
covers deception of machines which was a problem under the old law, although it is very
widely drafted)
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The Law Commission and Home
Office intend that the Ghosh definition should apply, and the law officers confirmed this in
Parliament
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Dishonesty is the principal determinant of criminal liability
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2 of the 1968 Act and therefore,
defendant claims to be acting under a claim of right are no guarantee of acquittal
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If defendant (genuinely believes
he) has a claim of right to the property there should be no criminal liability
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Knowledge is more onerous mens rea than ‘belief’ and even ‘recklessness’
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This
will commonly be proved by inference
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This problem was
anticipated and the alternative mens rea - that defendant knew that the representation
might be false - seeks to avoid the problem
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Proving that defendant knew
that the representation might be misleading is also a more obvious route for the Crown
when allegation involves representations as to states of mind of those other than the
accused; although defendant cannot easily be shown to know the state of another’s mind,
he may be shown to know what it might be
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Attorney - General
stated in Parliament: “If an art dealer said, ‘This is a painting by Renoir’, knowing that that
statement can have a huge impact on the value of the painting - but not knowing whether it
is true and thinking that it might be untrue - it would be for a jury to decide whether he was
dishonest
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The Attorney-general treats as synonymous thinking that a statement
might be untrue or misleading and knowing that it might be untrue or misleading
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It seems inevitable that in practice
this mens rea element will blur unsatisfactorily into the element of dishonesty
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The dealer who actually thinks it
might be untrue, acts dishonestly
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Perhaps the best that can be said is that at least
both the mens rea requirements remain subjective
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A precise definition of wilful blindness or
connivance as it is sometimes known remains elusive, and could extend liability
significantly in this context
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At face value, this is a strict
mens rea requirement
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Intention should bear its ordinary meaning, and as elsewhere in criminal law include
foresight of a virtually certain consequence
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Again one might ask whether this is properly described as

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fraud
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Defendant who starts a false rumour
that his competitor victim is going out of business, commits the offence if he does so with
intent to lead customers away from victim and is regarded as dishonest in doing so
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Section 5 defines ‘gain’ or ‘loss’ for the purposes of ss
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34 (2) (a) of the Theft Act 1968
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“Gain”
includes a gain by keeping what one has, as well as a gain by getting what one does not
have
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The Government was keen to paralleled those in the Theft Act 1968
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Fraud by failing to disclose information
Section 3 of the Fraud Act 2006 states: A person is in breach of this section if he - (a)
dishonestly fails to disclose to another person information which he is under a legal duty
to disclose, and (b) intends, by failing to disclose the information - (i) to make a gain for
himself or another, or (ii) to cause loss to another or to expose another to a risk of loss
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However, the offence is only committed
when the defendant is under a legal duty to disclose the information
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The Act offers no guidance
and so the issue must be one of general law
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This might require a criminal trial to delve into some
complex issues in civil law
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The government’s explanatory notes 2006 to the Act state that the following passage from
the Law Commission Report No
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For this purpose there is a legal duty to disclose information such not only
if the defendant’s failure to disclose it gives the victim a cause of action for damages, but
also if the law gives the victim a right to set aside any change in his or her legal position to
which he or she may consent as a result of the non-disclosure
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There appears to be an overlap between section 2 and 3
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Where it is a clear failure to disclose, section 3 may be preferred as it will be clear to the
jury what the prosecution’s case is
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This is a rather broadly drafted offence
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However, it is unclear whether it will apply more widely than
this remarkably the Act fails to define ‘a position in which he is expected to safeguard, or
not act against, the financial interests of another person’
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The government’s
explanatory notes to the Act refer to the following passage of a Law Commission Report
as assisting in deciding whether or not there is the necessary position: ‘The necessary
relationship will be present between trustee and beneficiary, director and company,
professional person and client, agent and principal, employee and employer, or between
partners
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This does not mean
that it would be entirely a matter for the fact-finders whether the necessary relationship
exists
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’

Relationships covered by section 4 are highlighted in the case of:
R v Valujevs (2014), Valujevs and Mezals were charged with fraud by abuse of position
contrary to section 4 of the Fraud Act 2006
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The key issue at trial and on appeal was
whether the gangmasters could be said to occupy ‘a position in which he is expected to
safeguard, or not act against, the financial interests of another person
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It is clear from the wording that Parliament did not intend to restrict the
operation of the section to those situations in which the defendant owes a fiduciary duty
to the alleged victim, not least because this result could readily have been secured by
appraise drafting
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It is prohibited in the licensing standards to withhold or to threaten to withhold the whole
or part of any payment due to a worker for any work they have done on account of “any
matter within the control of the licence holder”
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On either basis, the prosecution are able to contend that the
defendants had taken on the obligation of paying the wages of the workers, and it is
inherent in that commitment that the wages received by the workers will not be reduced
by unwarranted financial penalties or deductions, unlawful demands for the repayment of
suggested fines, or artificially inflated rental payments
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Put otherwise,
having assumed responsibility for collecting the wages for a worker, or by exercising
control over the wages that would be received by a worker at the point they are received,
there is a clear expectation that the worker will receive them without a reduction in the
form of (i) unwarranted financial penalties or deductions, (ii) unlawful demands for the
repayment of suggested fines, or (iii) artificially inflated rental payments
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It is for the judge to assess whether the position held by the
individual is capable of being one “in which he is expected to safeguard, or not to act
against, the financial interests of another person”
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It would be
untenable to suggest that the expectation should be that of either the potential victim or
the defendant
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We are unpersuaded by the defendants’ contentions that unlicensed gangmasters are not
caught in this expectation
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Potentially
reprehensible behaviour of this kind falls outside the financial interests of a person the
gangmaster could properly be expected to safeguard or not to act against
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Gangmasters are entitled to ask for repayment of the moneys they
have lent to workers
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To establish abuse of position for the
purposes of section 4, it is necessary for the prosecution to demonstrate a breach of
fiduciary duty, or a breach of an obligation that is akin to a fiduciary duty
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Section 4 does not apply to those who simply supply
accommodation, goods, services or labour, whether on favourable or unfavourable terms
and whether or not they have a stronger bargaining position
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In conclusion, section 4 should not apply in “general commercial area where individuals
and businesses complete in markets of one kind or another, including labour markets, and
are entitled to and expect to look after their own interests”
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The Court of Appeal made it clear that when the jury are considering whether the
defendant ‘is expected to safeguard, or not act against, the financial interests of another
person’ the expectations in question are not those of the defendant, nor indeed the
victim, but of the reasonable person
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There may be concerns that this might disadvantage a defendant who

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unknowingly put themselves in a position where reasonable people would expect them to
safeguard the financial interests of another
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In Valujevs case, Fulford LJ’s suggestion that section 4 did not apply overlooks that some
people are not able to look after their own interests
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In both Ousey and Choi defendants were
convicted of the section 4 offence on the basis of them being employees or ex-employees
of the victim
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Particularly, whether it is intended to apply just to cases
where under civil law there is a breach of trust or fiduciary duty or whether or not it is
intended to be wider than this
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This is problematic where a person whose position of trust is
informal
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This
offence is very wide and its coverage could include employees making an unlawful profit
from their position, executors of wills improperly dealing with a deceased’s assets, to
directors of companies misbehaving
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J
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Disloyalty, on this
account, is criminalised because it has a corrosive effect on society: the importance of
trust relationships where an individual is entrusted with the oversight of financial affairs of
another
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If the offence were not drafted in such broad terms it would not be able to uphold
effectively the basic public good of protecting trust relationships in dealing with another’s
financial interests
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The parameters of the offence can then be narrowed down
through prosecutorial policy which should aim to prevent “the criminal law being used as
a debt collection agency or to protect the commercial interests of companies and
organisations”
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”
No mens rea is required for this offence
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”
Section 7 creates an offence for creating, adapting, supplying or offering for supply any
article knowing or intending it to be used in connection with fraud
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Subsection (2) A person obtains services in breach of this subsection if - (a) they are made
available on the basis that payment has been, is being or will be made for or in respect of
them, (b) he obtains them without any payment having (c) when he obtains them, he
knows - (i) that they are being made available on the basis described in paragraph (a), or
(ii) that they may be, but intends that payment will not be made, or will not be made in full
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It is drafted to
include obtaining services through dishonest electronic means
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It does not cover cases
where by deception defendant persuades the victim to provide gratuitous services
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It should be noted that the offence is only committed where it
is the deception which has caused the obtaining
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Also if
the defendant has paid for the service in full no offence is committed
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11 of FA 2006, defendant commits the offence where he obtains services for
himself or another by any dishonesty act
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1 of the Theft
Act 1978 of dishonesty obtaining services by deception
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This means that
defendant will be guilty where he dishonestly uses a foreign coin in a machine to obtain
services
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2 (1)
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11, but it would seem that he also makes a representation, by his conduct of
inserting the coin, that it is valid payment
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An omission does not suffice
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Defendant’s mother died, but he failed to tell
the council his change of circumstances
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In Rai, defendant’s true representation later became false
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11 of FA 2006, dishonesty act is required
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If representation are excluded, then the act will
be the act of filling out the application form
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The meaning of ‘service’ is similar to the definition under s
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Under
section 11(2), a person obtains a service where the service is made available on the basis
that payment had been, is being, or will be made for or in respect of it
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A benefit provided gratuitously does not amount to a service
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When the account is
opened, defendant is provided with a service
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In R v Nabina, defendant dishonestly lied about
his personal details in order to obtain credit cards, this would now be an offence under
section 11
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R v
Sofroniou held that although banks and credit card companies commonly make charges
and charge interest, this can be avoided, thus charges cannot be incurred just by opening
the account
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In contrast to s
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11, there must be an obtaining (of services)
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This is because the statutory wording requires that the defendant
by his dishonest act obtain a service
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The dishonest act is the running off without paying, and
even if ‘act’ includes false representations, this is subsequent to the obtaining
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The only time where defendant can be found guilty of obtaining
the service dishonestly is where there is evidence that he was never going to pay
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Under FA 2006, this cannot be a s
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Defendant, who registers as a guest at a hotel but who does not
intend to pay, by his dishonest act of registering obtains the service
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The
problem is proving the dishonest intent at the outset and defendant will have to be
charged with making off without payment
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11 offence can accommodate
previous dishonest examples of behaviour
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This part of the mens rea is
considered as part of the actus reus
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The
dishonesty must exist at the time of the act
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The final decision was that it should not be
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Making off without payment
Section 3 of the Theft Act 1978 states: “(1) subject to subsection (3), a person who,
knowing that payment on the spot for any goods 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 due to the amount due shall be guilty of an offence
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(3) Subsection (1), shall not apply where the supply of the goods or the doing of the
service is contrary to law, or where the service done is such that payment is not legally
enforceable
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“

The key elements of the above section are:
1
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dishonestly;
3
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knowledge that payment on the spot is required for goods or services;
5
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The AR is making off without having paid as required or expected
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Making off from the place where payment was expected
Making off means leaving
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In
McDavitt (1981), the defendant was apprehended while walking towards the door of a
restaurant
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In Moberley v Allen The Times (1991), was stated that if there were
two places where the defendant could pay then the offence was committed only when the
defendant had passed them both
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There is some
doubt whether a defendant can be said to be making off if the victim has given

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permission to the defendant to leave
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However, it is unclear whether this is so if the victim’s consent was obtained by
the defendant’s deception
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He argues that in the later case there is no making off as the
situation is not the kind which the Act was meant to deal with, but the former is
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Goods supplied or services done
The offence requires evidence that goods have been supplied or services done for the
defendant
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However, the wording may provide some defendants a loophole: if a defendant
plays golf but runs away without paying, it may be argued that he has not been provided
with services
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Griew argues not, but Smith
suggests that the goods are supplied, in that they are ‘made available for sale’
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In either case, it would be unlikely that a court would take a restrictive
interpretation of the offence
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To make off from a brothel or run away from a cafe selling illegal drugs without
payment for their illegal services would not involve the offence
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This means that if
the ‘victim’ has broken the contract with the defendant in such a way that the defendant is
not obliged to pay for the service or goods the defendant commits no offence, if he
leaves without paying
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In favour of finding the
defendant not guilty in such a case, is the argument that such conduct would be covered
by section 2 of the FA 2006
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Dishonesty
Is the same meaning in the Ghosh case
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The fact that payment
on the spot is required means that the defendant is expected to pay at the time and at the
particular place
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The defendant tried to argue that
payment was expected at the destination, not when he ran off
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Intent to avoid payment
Although this section does not specifically state that it must be shown that the defendant
intended to avoid payment, this was established in R v Allen (1985)

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