Fraud offences - Fraud by false representation

Learning Outcomes

This article outlines fraud by false representation under the Fraud Act 2006 for SQE1, including:

• The statutory definition and elements of the offence, with a clear breakdown of actus reus, mens rea, and offence classification.
• The range of express, implied, and continuing representations, including those made to machines, online platforms, and via agents or intermediaries.
• How and when a representation becomes “false” or “misleading”, and why surrounding context and partial truths are crucial in exam scenarios.
• The knowledge requirement regarding falsity, the limits of negligence or suspicion, and how deliberate ignorance can amount to knowledge.
• Application of the Ivey dishonesty test, including how exam questions typically present issues about the defendant’s belief and community standards.
• The requirement of intent to make a gain or cause a loss, including temporary outcomes and situations where no gain or loss occurs.
• The statutory meanings of “gain” and “loss” in relation to money or property, and the exclusion of services from s 2.
• Practical applications through common fact patterns, digital and everyday examples, and typical SQE1 pitfalls, such as assuming reliance or actual loss is required.
• How to distinguish completed fraud from attempted fraud where the representation turns out to be true or does not reach the intended target.

SQE1 Syllabus

For SQE1, you are required to understand fraud by false representation as a core criminal offence, with a focus on the following syllabus points:

• the statutory definition and elements of fraud by false representation (Fraud Act 2006, s 2)
• the meaning of "representation" (express and implied)
• representations made to machines and via agents, and continuing representations
• the requirements for a representation to be "false" (untrue or misleading)
• the mens rea: knowledge that the representation is or might be false or misleading, dishonesty (Ivey test) and intent to make a gain or cause a loss
• the statutory meaning of gain and loss (including temporary gain/loss and keeping or not obtaining property)
• practical examples of how the offence is committed and applied
• relevant defences and common pitfalls in exam questions

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is required to prove fraud by false representation?
   1. Actual loss to the victim
   2. A false representation made dishonestly
   3. The victim must rely on the representation
   4. The defendant must intend to make a gain or cause a loss
2. Which of these is an implied representation?
   1. Stating you have a law degree when you do not
   2. Using a stolen credit card to pay for goods
   3. Writing a false reference for yourself
   4. Telling someone you are a police officer when you are not
3. What is the correct test for dishonesty in fraud offences?
   1. Whether the defendant believed their conduct was dishonest
   2. Whether the conduct was dishonest by the standards of ordinary decent people
   3. Whether the victim felt deceived
   4. Whether the defendant intended to repay the money

4. True or false? Fraud by false representation requires the victim to actually suffer a loss.

Introduction

Fraud by false representation is a key criminal offence under the Fraud Act 2006. It targets dishonest conduct where a person makes a false representation, intending to make a gain for themselves or cause loss to another. The offence is broad, covering both express and implied representations, and does not require the victim to actually suffer a loss. For SQE1, you must be able to identify the elements of the offence, apply the correct test for dishonesty, and recognise common examples.

Fraud is a single offence under s 1 FA 2006 that can be committed in three ways: by false representation (s 2), by failing to disclose information (s 3), and by abuse of position (s 4). Fraud by false representation is an either-way offence with a maximum sentence of 10 years’ imprisonment in the Crown Court, and is a conduct offence: the prosecution need not prove causation of any gain or loss. Modern practice frequently involves representations made digitally (for example via websites, chip-and-PIN devices or ATMs). The statute explicitly provides that a representation can be made “to any system or device designed to receive, convey or respond to communications (with or without human intervention).”

Elements of Fraud by False Representation

To prove fraud by false representation, the prosecution must establish both actus reus and mens rea.

Actus Reus: Making a False Representation

A person commits the actus reus by making a false representation. This can be in words, writing, conduct, or even by silence if there is a duty to speak.

Key Term: representation
A statement or conduct that conveys information about fact, law, or state of mind, made expressly or impliedly.

Key Term: false representation
A representation that is untrue or misleading, and the person making it knows it is, or might be, untrue or misleading.

Key Term: misleading representation
A representation that is less than wholly true and capable of being interpreted to the detriment of the victim, even if part of what is said is factually correct.

Express and Implied Representations

• Express representations are clear statements, such as claiming to have a qualification you do not possess.
• Implied representations arise from conduct or circumstances, such as using a credit card (implying you are authorised to use it), or selling goods as genuine when they are not.

Representations can be directed to a human recipient or to a machine. Entering stolen payment details into an online checkout or keying a PIN at an ATM implies authority to transact and funds available, even if no human sees the input. A representation can also be made via an agent: if you arrange for another person to impersonate you to obtain a benefit, you are treated as making the representation.

Sometimes a representation continues over time. Where a person initially represents themselves as a legitimate customer (for example by ordering a meal) but later decides not to pay, the initial representation can become false if they fail to “undeceive” the victim.

Exam Tip For s 2 FA 2006 it is enough that a representation is made; there is no requirement that anyone receives, reads or believes it. Submitting a representation to a system is sufficient.

When is a Representation “False”?

A representation is false if it is untrue or misleading. Untruth includes outright lies. Misleading covers partial truths or omissions that lead the recipient to a detrimental interpretation. The assessment of whether a representation is untrue is usually for the jury; where the representation concerns a statement of law (for example a claim about contractual rights), the court decides whether it was untrue in law.

It is not enough that the defendant believes a statement to be false; the representation must actually be untrue or misleading. If the representation turns out to be true, the proper charge may be attempted fraud rather than completed fraud.

Mens Rea: Dishonesty and Intent

The mental element requires two components:

• Knowledge that the representation is, or might be, untrue or misleading
• Dishonesty
• Intent to make a gain for oneself or another, or to cause loss or risk of loss to another

Key Term: knowledge of falsity
The defendant must know that the representation is, or might be, untrue or misleading. Suspicion or negligence (“ought to have known”) is insufficient. Deliberate ignorance (closing eyes to the obvious) can satisfy knowledge.

Key Term: dishonesty
Conduct that is dishonest by the standards of ordinary decent people, assessed using the Ivey test.

Key Term: intent to make a gain or cause a loss
The defendant must intend, by their false representation, to make a gain for themselves or another, or to cause loss or risk of loss to another. Actual gain or loss is not required.

The Ivey Test for Dishonesty

The Supreme Court in Ivey v Genting Casinos [2017] UKSC 67 set out a two-stage test:

1. Determine the defendant’s actual knowledge or belief about the facts.
2. Decide whether their conduct was dishonest by the standards of ordinary decent people.

The defendant’s own view of whether they were dishonest is irrelevant.

Knowledge That the Representation Is False or Might Be False

The knowledge requirement is subjective. It must be shown that the defendant knew the representation was untrue or misleading, or knew it might be. It is not enough that they ought to have known or had reasonable grounds to suspect it. However, “wilful blindness” satisfies the test: where a person deliberately avoids confirming an obvious falsity, the court may infer knowledge.

Intent to Gain or Cause Loss

The gain or loss can be temporary or permanent, and relates to money or property. It is enough that the defendant intended this result; it does not have to occur. The statutory definitions are wide:

Key Term: gain
Includes obtaining what one does not have and keeping what one has (for example, retaining money already held).

Key Term: loss
Includes parting with what one has and not getting what one might get (for example, failing to recover property or receive payment).

Importantly, “gain” and “loss” concern money or other property; services do not count as property for s 2, though separate offences exist for obtaining services dishonestly.

Practical Application

Fraud by false representation is a conduct offence. The prosecution does not need to prove that the victim relied on the representation or suffered loss. The focus is on the defendant’s dishonest act and intent.

Representations can be made:

• to people (spoken, written, or by conduct)
• to machines (websites, chip-and-PIN, ATMs)
• via agents (another person acting at the defendant’s behest)

Continuing representations can turn false when circumstances change and the defendant does not correct the position. Overcharging can amount to a false representation where a relationship of trust implies a fair price (for example, where a customer relies on an honest quotation), but context matters: not every inflated quote is criminal.

Worked Example 1.1

Scenario:
Sam uses a stolen debit card to buy groceries at a supermarket. The card is accepted and Sam leaves with the goods.

Answer:
Sam has committed fraud by false representation. By using the card, Sam impliedly represents that they are authorised to use it (false representation). Sam acts dishonestly and intends to gain goods for themselves. It is irrelevant whether the supermarket suffers a loss or not.

Worked Example 1.2

Scenario:
Leah applies for a job and claims on her CV to have a law degree, knowing this is false. She is offered the job but turns it down.

Answer:
Leah has still committed fraud by false representation. She made a false representation (claiming a qualification she does not have), acted dishonestly, and intended to gain employment. The fact that she did not accept the job or receive payment does not prevent liability.

Worked Example 1.3

Scenario:
Ali sells a watch online, describing it as a genuine brand when it is a replica. The buyer pays and receives the replica.

Answer:
Ali is guilty of fraud by false representation. The description is a false representation, made dishonestly, with intent to gain money. The buyer’s actual loss is not required for the offence.

Worked Example 1.4

Scenario:
Nina enters stolen card details into an e-commerce checkout to order a laptop for delivery. The site auto-approves the transaction.

Answer:
The representation is made to a machine. Nina impliedly represents she is authorised to use the card and has funds. She knows that is false, acts dishonestly, and intends to gain a laptop. Liability arises even if no human reads the details or if the transaction is later declined.

Worked Example 1.5

Scenario:
Tom orders dinner at a restaurant intending to pay. After eating, he decides to run out without paying and says nothing before leaving.

Answer:
Tom’s initial representation as a legitimate customer becomes false when he decides not to pay and fails to “undeceive” the restaurant. If coupled with dishonesty and intent to cause loss (the bill), this can amount to fraud by false representation.

Worked Example 1.6

Scenario:
A trusted tradesperson quotes an elderly client £3,000 for boiler repairs worth about £800. The client relies on the tradesperson’s honesty built over years.

Answer:
Where a relationship of trust implies a fair price, gross overcharging can amount to a misleading representation that the price is fair. If the tradesperson knows the price is grossly excessive and acts dishonestly intending to gain more money, s 2 liability can arise. Not every high quote is criminal; context and trust matter.

Worked Example 1.7

Scenario:
Raj tells a buyer that his motorcycle is “free from finance.” He believes this is false because he signed a finance agreement, but the agreement was void and the bike is in fact free of encumbrances.

Answer:
The representation is true. Raj’s belief that it was false does not make it a s 2 offence. However, he may be liable for attempted fraud if he acted dishonestly intending to cause loss or make a gain by a representation he believed was false.

Exam Warning

Fraud by false representation does not require the victim to suffer actual loss or to rely on the representation. The offence is complete once the false representation is made dishonestly with the required intent.

Knowledge is a subjective test. It is not enough that the defendant ought to have known the representation was false. Deliberate avoidance of the truth can satisfy knowledge.

Gain/loss must relate to money or property. Services are outside s 2 (though covered by other offences). If the representation turns out to be true, consider attempted fraud.

Defences and Common Pitfalls

A defendant may avoid liability if they genuinely believed the representation was true, even if that belief was unreasonable. The key is whether the belief was honestly held, and whether the representation itself was in fact untrue or misleading. If the representation was true, the completed offence under s 2 is not made out (though attempted fraud may be).

A lack of intent to make a gain or cause a loss will also prevent liability. The intent must be linked to the making of the representation. Duress may be available if the defendant was compelled to act under threat.

Pitfalls to avoid include:

• assuming the prosecution must prove reliance or actual loss (they do not)
• confusing suspicion or negligence with knowledge (the test is what the defendant knew, or deliberately avoided knowing)
• overlooking that representations can be made to machines and via agents
• forgetting that “gain” includes keeping what one has and “loss” includes not receiving what one might get

Summary

Fraud by false representation under the Fraud Act 2006 requires:

• A false representation (express or implied; to a person, machine, or via an agent; including continuing representations that become false)
• Knowledge that the representation is or might be untrue or misleading
• Dishonesty (Ivey test)
• Intent to make a gain or cause a loss

Actual loss or reliance by the victim is not required. The offence is broad and applies to a wide range of dishonest conduct, including digital transactions. “Gain” and “loss” are interpreted widely to include temporary outcomes and keeping or not obtaining property.

Key Point Checklist

This article has covered the following key knowledge points:

• Fraud by false representation is defined in s 2 of the Fraud Act 2006.
• A representation can be express or implied, and may be made to a machine, a person, or via an agent.
• A representation is false if it is untrue or misleading; context can make partial truths misleading.
• The knowledge requirement is subjective: the defendant must know the representation is, or might be, false or misleading; deliberate ignorance may suffice.
• Dishonesty is assessed objectively using the Ivey test.
• The defendant must intend to make a gain or cause a loss; actual gain or loss is not required.
• “Gain” includes keeping what one has; “loss” includes not getting what one might get. Both can be temporary.
• The offence is complete once the false representation is made with the required intent, regardless of outcome.
• If a representation turns out to be true, consider attempted fraud rather than completed s 2 fraud.

Key Terms and Concepts

• representation
• false representation
• misleading representation
• knowledge of falsity
• dishonesty
• intent to make a gain or cause a loss
• gain
• loss