The Fraud Act 2006 (c 35) is an Act of the

Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprem ...

which affects

England and Wales England and Wales () is one of the three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. The substantive law of the jurisdiction is En ...

and

Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label=Ulster Scots dialect, Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is #Descriptions, variously described as ...

. It was given

royal assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in oth ...

on 8 November 2006, and came into effect on 15 January 2007.

Purpose

The Act gives a statutory definition of the criminal offence of

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

, defining it in three classes - fraud by false representation, fraud by failing to disclose information, and fraud by abuse of position. It provides that a person found guilty of fraud was liable to a fine or imprisonment for up to twelve months on

summary conviction A summary offence or petty offence is a violation in some common law jurisdictions that can be proceeded against summarily, without the right to a jury trial and/or indictment (required for an indictable offence). Canada In Canada, summary offen ...

(six months in Northern Ireland), or a fine or imprisonment for up to ten years on conviction on

indictment An indictment ( ) is a formal accusation that a person has committed a crime. In jurisdictions that use the concept of felonies, the most serious criminal offence is a felony; jurisdictions that do not use the felonies concept often use that ...

. This Act largely replaces the laws relating to obtaining property by deception, obtaining a pecuniary advantage and other offences that were created under the Theft Act 1978. These offences attracted much criticism for their complexity and difficulty in proving at court. Much of the Theft Act 1978 has been repealed, but the offence of making off without payment, defined under section 3 has not been affected. *"Fraud by false representation" is defined by Section 2 of the Act as a case where a person makes "any representation as to fact or law ... express or implied" which they know to be untrue or misleading. *"Fraud by failing to disclose information" is defined by Section 3 of the Act as a case where a person fails to disclose any information to a third party when they are under a legal duty to disclose such information. *"Fraud by abuse of position" is defined by Section 4 of the Act as a case where a person occupies a position where they are expected to safeguard the financial interests of another person, and abuses that position; this includes cases where the abuse consisted of an omission rather than an

overt act In criminal law, an overt act is the one that can be clearly proved by evidence and from which criminal intent can be inferred, as opposed to a mere intention in the mind to commit a crime. Such an act, even if innocent ''per se'', can potentiall ...

. In all three classes of fraud, it requires that for an offence to have occurred, the person must have acted

dishonestly Dishonesty is to act without honesty. It is used to describe a lack of probity, cheating, lying, or deliberately withholding information, or being deliberately deceptive or a lack in integrity, knavishness, perfidiosity, corruption or treacherousne ...

, and that they had to have acted with the intent of making a gain for themselves or anyone else, or inflicting a loss (or a risk of loss) on another.

Gain and loss

A "gain" or a "loss" is defined to consist only of a gain or a loss in money or property (including intangible property), but could be temporary or permanent. A "gain" could be construed as gaining by keeping their existing possessions, not just by obtaining new ones, and loss included losses of expected acquisitions, as well as losses of already-held property. The Act will establish two "supporting" offences, these being the possession of articles for use in frauds (Section 6) and the making or supplying of articles for use in frauds (Section 7).

Obtaining services dishonestly

Section 11 of the Act makes it a statutory offence to obtain services dishonestly; meaning that services which were to be paid for were obtained with the knowledge or intention that no payment would be made. A person found guilty of this will be liable to a fine or imprisonment for up to twelve months on summary conviction (six months in Northern Ireland), or a fine or imprisonment for up to five years on conviction on indictment.

Companies and fraudulent business

In regard to the fraudulent behaviour of companies, the existing offence of participating in fraudulent business carried on by a company, provided for by the

Companies Act 1985 The Companies Act 1985 (c. 6) is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their ...

, was amended by Section 10 - bringing the maximum penalty from 10 years imprisonment to 15 years nd/or a fine- and a new offence of participating in fraudulent business carried on by a sole trader was established by Section 9. Section 12 of the Act provides that where an offence against the Act was committed by a

body corporate In law, a legal person is any person or 'thing' (less ambiguously, any legal entity) that can do the things a human person is usually able to do in law – such as enter into contracts, sue and be sued, own property, and so on. The reason for ...

, but was carried out with the "consent or connivance" of any director, manager, secretary or officer of the body - or any person purporting to be such - then that person, as well as the body itself, is liable. An important difference between this and the Theft Act is that the Fraud Act offences do not require there to have been a victim, as was the case with the Theft Act. Some Trading Standards services have already used the Act against bogus charity collectors and it can be used for some matters that were previously dealt with under repealed sections of the Trade Descriptions Act 1968 (e.g. car-clocking).

References

External links