These days, offences relating to financial advantage gained through deception are charged under the Fraud Act 2006. These types of offences are treated more seriously by the courts than the offence of theft, and correspondingly they have more severe punishments attached to them. There are some key differences between fraud and theft offences. One is that fraud does not have to actually result in a material loss to the victim, although cases where a loss has been suffered will be considered more serious when it comes to sentencing. Read on to understand the different types of fraud offences, and the sentence that you could face if you are convicted of a fraud offence.
Is deception a criminal offence in the UK?
Yes, deception for financial gain is a criminal offence, (although it no longer goes by that name). Pursuant to the Theft Act 1968, obtaining property by deception and obtaining pecuniary advantage by deception used to be criminal offences. However, these offences were repealed by the Fraud Act 2006. These offences have therefore now been replaced with the following offences:
Another offence that relates to deception is obtaining services dishonestly, pursuant to Section 11 of the Fraud Act.
The Fraud Act came into force on 15 January 2007. Therefore fraud offences can only be tried in relation to incidents which occurred after this date. If it is uncertain whether the crime occurred before or after January 2007, the CPS can charge both under the Theft Act and alternately under the Fraud Act.
Fraud by false representation
This is where a person:
- Dishonestly – this is not a term that is defined within the Fraud Act. The courts have found that dishonesty should be determined by looking at the defendant’s actual state of knowledge or belief as to the facts, and whether the conduct was dishonest by the objective standards of ordinary, decent people. For the offence to be made out, the current case law is that the defendant does not have to appreciate at the time of the offence that his or her behaviour is dishonest.
- Makes a false representation – a representation is false if it is untrue or misleading and the person making it knows that it is or might be untrue or misleading. A representation could relate to fact or law, including a representation as to the state of mind of the person making the representation or any other person. A representation could be express or implied. A representation does not have to be a verbal statement. It could also include a message submitted via a communication system or device. For example, using false credit card details to communicate with voice activated software.
- Intending by making the representation either to make a gain for himself/herself or another; or cause a loss to another or to expose another to a risk of loss – this includes a gain or loss in money or other property. It could include keeping what you already have or not parting with your current possessions, as well as obtaining new property. The defendant must intend the false representation to cause the gain or loss.
A false representation could include using a stolen document as your own, e.g. a cheque book or a credit card, and pretending that you are the person named on it and entitled to use it. It could also include using your own credit card where you are aware that you have exceeded the credit limit.
When it comes to false representations, sometimes there is a fine line as to whether a matter is a criminal offence or a matter of civil law between the two parties. If you believe that this is a matter that is inappropriate for the police to involve themselves in, e.g. a commercial dispute between two parties, this is something you should discuss with your criminal defence solicitor as it could form the basis of your defence.
Fraud by failing to disclose information
This is where a person:
- Fails to disclose to another person – note that ignorance of this duty to disclose is not a defence.
- Information which he is under a legal duty to disclose – whether a legal duty is capable of existing in the circumstances is a matter for the judge. For example, a solicitor/client relationship would be an example of a relationship where a legal duty to disclose clearly exists. Other relationships may be less clear. The judge would then have to direct the jury to decide on whether, on the facts alleged, the relationship giving rise to that duty existed. The offence can still be made out where the defendant fails to disclose some but not all the information.
- And intends, by failing to disclose the information to make a gain for himself or another; or cause loss to another or expose another to a risk of loss
This offence is made out regardless of whether anyone was actually deceived or any property was actually gained or lost.
Fraud by abuse of position
This is where a person:
- Occupies a position in which he or she is expected to safeguard or not to act against the financial interests of another person – this includes directors, trustees, business partners or employees. Often, a fiduciary duty might be an explicit part of the role, but not always.
- And dishonestly
- Abuses that position – this can include an omission to act, as well as a positive act.
- Intending by means of the abuse of that position to make a gain for himself/herself or another or to cause loss to another or expose another to a risk of loss – again, it does not matter whether the defendant actually causes a gain or a loss.
Examples of this offence include:
- Cloning company products with the intention of selling them for profit
- A solicitor who removes money from the firm’s client account for their own use
- A trustee who dishonestly uses his position to act outside of the trust deed in order to make a financial profit
Obtaining services dishonestly
A person is guilty of this offence if they:
- Obtain services for themselves or another – services is not defined within the Fraud Act
- By a dishonest act
- Where the services are made available on the basis that payment has been, is being or will be made
- And they obtain them without any payment having been made or without payment being made in full
- When they obtain them, they know that they are being made available on the basis that they have been, are being, or will be paid for, or they might be, but they do not intend to pay, or do not intend to pay in full
What is the punishment for obtaining money by deception?
High culpability offences are ones that involve the offender playing a leading role in offending; the involvement of others through pressure and influence; or the abuse of a position of power, trust, or responsibility. Offences that involve a large number of victims or deliberately target victims based on their vulnerability will also increase culpability.
Harm is principally assessed by the size of the financial loss involved.
For example, a £1 million fraud where the offender played a leading role would have a starting point of 7 years’ custody, whereas a £1000 fraud where the offender was coerced into participating would probably receive a fine or a community order.
- Obtaining services dishonestly: This is also an either way offence. If it is tried summarily (i.e. in the Magistrates’ Court), the maximum sentence is 12 months’ imprisonment or a fine not exceeding the statutory maximum, which is £5000 (or both). If it is tried on indictment (i.e. in the Crown Court) the maximum sentence is imprisonment for a term not exceeding 5 years or an unlimited fine or both.
Where to get further help?
If you have been accused of fraud, it is advisable to seek legal advice immediately. Fraud offences can be complex, and therefore you need a smart and up to date legal team if you want to put forward a robust defence. At Stuart Miller Solicitors, we have the tools to test the prosecution’s evidence and help you put your best foot forwards at court. Whether you require expert evidence or a thorough understanding of technology, our criminal defence team is ready to help you. Take the first step today and contact us for a free consultation.