Introduction
Fraud by false representation, defined in Section 2 of the Fraud Act 2006, is a criminal offence committed when a person dishonestly makes a false representation, intending to make a gain for themselves or cause loss to another. This offence emphasizes the dishonest conduct of the perpetrator over the victim's actual loss or reliance on the misrepresentation. The core principles revolve around the act of making a false representation and the requisite dishonest intent, aligning with modern approaches to tackling fraud in various contexts.
Legal Framework and Context
Origins of the Fraud Act 2006
The Fraud Act 2006 was enacted to simplify and modernize the law on fraud, replacing the deception offences under the Theft Acts of 1968 and 1978. The previous legislation was seen as outdated and insufficient to address the complexities of fraudulent activities, especially with the rise of digital technology. The new Act introduced a more flexible and comprehensive approach, focusing on the fraudulent actions themselves.
Focus on Conduct over Outcome
Under the Fraud Act 2006, the emphasis is placed on the defendant's conduct—specifically, the making of a false representation with dishonest intent—regardless of whether any benefit was actually obtained or any loss was incurred. This shift allows for the prosecution of attempted frauds and reflects the understanding that the mere act of attempting to deceive is harmful to societal trust.
Key Elements of the Offence
To establish the offence of fraud by false representation, both the actus reus (the guilty act) and the mens rea (the guilty mind) must be proven.
Actus Reus: Making a False Representation
A false representation can be express or implied and involves any communication of untrue or misleading information. This representation can be made by words, conduct, or even silence in circumstances where there is a duty to disclose information.
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Express Representations: These are clear, direct statements that are false.
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Implied Representations: Actions or behaviors that imply something false.
Examples of False Representation
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Using a Stolen Credit Card: Presenting a credit card for payment implies that one has the authority to use it.
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Selling Counterfeit Goods: Offering items as genuine when they are not.
Mens Rea: Dishonesty and Intent
The mental element of the offence includes two key components:
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Dishonesty: Determined by the standards of ordinary reasonable people.
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Intention to Gain or Cause Loss: The defendant must intend to make a gain for themselves or cause loss to another.
Dishonesty: The Ivey Test
The Supreme Court in Ivey v Genting Casinos [2017] UKSC 67 clarified the test for dishonesty:
- Determine the defendant's actual knowledge or belief about the facts.
- Assess whether their conduct was dishonest by the standards of ordinary decent people.
This objective test removes the need to consider whether the defendant realized that reasonable people would view their actions as dishonest.
Intent to Gain or Cause Loss
The intended gain or loss can be temporary or permanent, and it relates to money or property. Actual gain or loss is not necessary; the intent suffices.
Case Law and Legal Interpretations
Key Cases Shaping the Offence
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R v Barnard (1837): Demonstrated a false representation through implication by wearing a university cap and gown to receive a discount.
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Ivey v Genting Casinos [2017] UKSC 67: Established the current test for dishonesty, focusing on objective standards.
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R v Nizzar [2013] EWCA Crim 678: Highlighted the application of both elements of the offence when a shopkeeper attempted to deceive a customer over a winning lottery ticket.
Broad Interpretation of Representations
Courts have recognized that representations can be made in various ways, adapting to modern forms of communication, including digital and online interactions. This broad interpretation ensures that the law remains effective against evolving fraudulent schemes.
Practical Applications and Examples
Financial Services
Misuse of Credit Cards
Using a lost or stolen credit card to make purchases implies that one has the rightful authority to use it. This action constitutes a false representation and satisfies both the actus reus and mens rea of the offence.
Mortgage Application Fraud
Exaggerating income or assets on a mortgage application to secure a loan is a false representation intended to gain financially. Even if the loan is repaid, the initial dishonest intent fulfills the offence's requirements.
E-commerce and Digital Transactions
Online Auction Fraud
Selling goods online and misrepresenting their condition or authenticity is a common form of fraud by false representation. For example, listing a replica watch as a genuine brand item deceives buyers and constitutes an offence.
Phishing Scams
Sending emails that appear to be from legitimate organizations to obtain personal information involves misrepresenting the sender's identity. This deception meets the criteria for a false representation.
Professional Services
Resume Inflation
Falsifying qualifications or work experience on a CV to obtain employment is a false representation with intent to gain. This misrepresentation can lead to legal consequences if discovered.
Overbilling Clients
Charging for services not provided or inflating hours worked constitutes making false representations for financial gain. This practice breaches the trust between professionals and clients.
Defenses and Mitigating Factors
While fraud by false representation is a serious offence, certain defenses may be available:
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Belief in Truthfulness: If the defendant genuinely believed the representation was true, they may not be found dishonest.
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No Intent to Gain or Cause Loss: Lack of intent to make a gain or cause loss can negate the offence.
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Duress: Being compelled to act under threat may serve as a defense.
Conclusion
Fraud by false representation under Section 2 of the Fraud Act 2006 intricately combines the elements of false representation and dishonest intent. The actus reus involves making a false representation, which can be express or implied, and the mens rea requires both dishonesty and an intention to gain or cause loss. The objective standard for dishonesty established in Ivey v Genting Casinos [2017] UKSC 67 focuses on the defendant's knowledge and the ordinary standards of reasonable people.
Understanding how these elements interact is fundamental. For instance, when an individual knowingly uses a stolen credit card to purchase goods, they are making an implied false representation (actus reus) with the dishonest intent to gain financially (mens rea). The combination of action and intent satisfies the offence.
Recognizing the practical applications across various contexts—from financial services to online transactions—highlights the offence's broad reach and significance. Legal professionals must be adept at identifying the details of this offence, ensuring that they can apply these principles effectively in practice.
