Fraud Act 2006: Offences, Dishonesty and Case Law

Introduction

The Fraud Act 2006 modernised the law of fraud in England and Wales by moving away from the technical “deception” offences found in the Theft Acts 1968 and 1978. Instead, it defines a single offence of fraud that can be committed in three ways: by false representation (s2), by failing to disclose information (s3), and by abuse of position (s4). Each route requires dishonesty and an intention to make a gain, cause a loss, or expose another to a risk of loss. Crucially, there is no need to prove that anyone was actually deceived or that a loss occurred.

The Act also introduced related offences (such as possessing or supplying articles for use in frauds and obtaining services dishonestly) and left intact the separate offence of making off without payment under the Theft Act 1978.

What You'll Learn

• The three routes to committing fraud under the Fraud Act 2006 (ss2–4)
• How courts assess dishonesty after Ivey v Genting Casinos and Barton
• What “gain” and “loss” mean under section 5 (including risk of loss)
• Key differences from the old deception offences in the Theft Acts
• Important cases on false representation, abuse of position, and knowledge
• How to charge, evidence, defend, and mitigate fraud allegations
• Where offences like obtaining services dishonestly and making off without payment fit in

Core Concepts

Fraud by False Representation (section 2)

A person commits fraud if they:

• Make a representation that is false (untrue or misleading), and
• Know that it is, or might be, untrue or misleading, and
• Act dishonestly with the intention of making a gain, causing a loss, or exposing another to a risk of loss.

Key points:

• Representation can be about fact, law, or a person’s state of mind. It can be express or implied and may be made by conduct.
• Submitting information to automated systems counts (for example, entering details into an online form or using a card at a payment terminal), as a representation may be made to a machine.
• The offence is complete on making the representation with the required mental state; there is no need to prove reliance, actual deception, or actual loss.
• Examples include using someone else’s bank card, lying on a credit application, or mis-stating qualifications to obtain a paid role.

Practical focus:

• Identify precisely what was represented, how it was communicated (words, conduct, or data), why it was false, and the knowledge that it was or might be untrue.

Fraud by Failing to Disclose Information (section 3)

A person commits fraud if they:

• Fail to disclose information to another when under a legal duty to disclose it, and
• Act dishonestly with the intention of making a gain, causing a loss, or exposing another to a risk of loss.

Key points:

• A legal duty can arise from statute (e.g., tax or benefits law), contract (e.g., insurance duties that still apply post-reform), or fiduciary/professional duties (e.g., trustees, agents, or company directors).
• The duty must be more than a general moral expectation; it needs a legal basis.
• Typical situations include failing to declare material facts when legally obliged to do so or not disclosing a conflict of interest where a duty requires disclosure.

Practical focus:

• Pin down the source of the legal duty (statute, contract, or fiduciary relationship), the information that should have been disclosed, and the dishonest intent.

Fraud by Abuse of Position (section 4)

A person commits fraud if they:

• Occupy a position in which they are expected to safeguard (or not to act against) another’s financial interests, and
• Abuse that position, dishonestly intending to make a gain, cause a loss, or expose another to a risk of loss.

Key points:

• “Position” is interpreted broadly. It includes formal roles (employees, trustees, directors, carers) and situations giving rise to an expectation to safeguard another’s financial interests.
• Abuse can be by act or omission.
• Examples include an employee diverting funds, a carer using a vulnerable person’s money for personal expenses, or an agent preferring their own interests in breach of duty.

Practical focus:

• Show the existence and nature of the position, why there was an expectation to protect the other’s financial interests, and how that expectation was abused.

Dishonesty after Ivey and Intent to Make a Gain or Cause a Loss

Dishonesty

• The Supreme Court in Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67 set the test now applied in criminal cases (confirmed in R v Barton and Booth [2020] EWCA Crim 575):
  1. Determine the defendant’s actual state of knowledge or belief as to the facts.
  2. Assess whether the conduct was dishonest by the standards of ordinary decent people.
• There is no longer a separate requirement to consider whether the defendant realised ordinary people would view the conduct as dishonest.

Gain and loss (section 5)

• “Gain” and “loss” relate to money or other property and may be temporary or permanent.
• “Gain” includes keeping what one has as well as getting what one does not have.
• “Loss” includes not getting what one might get as well as parting with what one has.
• The Act also covers exposing another to a risk of loss; actual loss need not occur.

Other Offences Created by the Act (and a related offence that remains)

• Possession of articles for use in frauds (section 6): possessing tools or data intended for fraud (for example, skimmers, phishing kits). “Article” includes programs or data.
• Making or supplying articles for use in frauds (section 7): creating or distributing tools intended for fraud.
• Participating in a fraudulent business carried on by a sole trader (section 9): extends fraudulent trading liability beyond companies.
• Obtaining services dishonestly (section 11): obtaining services without payment or without paying in full, knowing payment is expected and acting dishonestly (for example, accessing a subscription service without paying).
• Making off without payment (Theft Act 1978, section 3): still in force; applies where someone leaves without paying for goods or services when payment is expected on the spot (for example, driving off from a petrol station without paying).

Sentencing note

• Fraud under sections 1–4 carries a maximum sentence of 10 years’ imprisonment. Other offences vary (for example, up to 5 years for section 6 and up to 10 years for section 7). Courts follow the Sentencing Council’s guideline on fraud.

Key Examples or Case Studies

Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67; confirmed in R v Barton and Booth [2020] EWCA Crim 575

• Point: The test for dishonesty is objective once the defendant’s actual belief about the facts is established.
• Use: Applied across Fraud Act prosecutions. Defence arguments based on a personal standard of honesty will not succeed if ordinary people would consider the conduct dishonest.

R v Idrees [2011] EWCA Crim 1446

• Facts: A candidate arranged for another person to sit his driving theory test.
• Point: Fraud by false representation can be committed by conduct; impersonation amounts to an implied representation of identity and entitlement.
• Use: Common in exam and identity fraud cases; good example of how s2 captures implied representations.

R v Augunas [2013] EWCA Crim 2046

• Facts: The defendant relied on documents claimed to be genuine.
• Point: For s2, the knowledge element includes awareness that a representation might be untrue or misleading. Turning a blind eye can satisfy this.
• Use: Supports the approach that “closing one’s eyes” to obvious doubts meets the knowledge requirement.

R v Valujevs and others [2014] EWCA Crim 2888

• Facts: Gangmasters exploited migrant workers by controlling wages and deductions.
• Point: “Position” in s4 is wide. An expectation to safeguard financial interests can arise from the practical control a person has, not only formal titles.
• Use: Abuse of position is not limited to classic fiduciary roles; juries can assess expectations arising from real-world arrangements.

Practical Applications

• Map the route to fraud early: choose s2 (representation), s3 (legal duty to disclose), or s4 (position and abuse). Avoid charging by default; fit the facts to the statutory route.
• Particularise the representation under s2: who it was made to (person or machine), what exactly was said or implied, and why it was false.
• Evidence knowledge for s2: show the defendant knew the statement was, or might be, untrue (emails, warnings, prior rejections, false documents, device logs).
• Prove the legal duty for s3: identify the statute, contract, or fiduciary obligation creating the duty to disclose; gather policy documents, terms, and professional rules.
• Define the “position” under s4: use contracts, job descriptions, policies, and witness evidence to show the expectation to safeguard financial interests.
• Do not chase actual loss unless relevant to sentence: intention to make a gain or cause a loss (including risk of loss) is enough for guilt.
• Capture digital trails: server logs, metadata, device forensics, access records, and audit trails often show representations to machines and user knowledge.
• Consider alternative or additional counts: s6/s7 (articles), s11 (obtaining services dishonestly), conspiracy to defraud (where appropriate), and Theft Act 1978 s3 (making off).
• Anticipate the dishonesty test: prepare evidence of what the defendant actually believed about the facts; apply the Ivey/Barton standard.
• Defence focus: challenge the existence of a legal duty (s3), the scope of any “position” (s4), the specificity of the alleged representation (s2), and the proof of knowledge and intent.
• Compliance steps for organisations: clear conflicts policies, mandatory disclosures, access controls, approval workflows, and monitoring reduce s3/s4 risk.
• Sentencing preparation: gather evidence on harm (actual or intended), sophistication, planning, abuse of trust, and steps towards restitution.

Summary Checklist

• Know the three routes to fraud: false representation (s2), failing to disclose (s3), abuse of position (s4).
• Dishonesty is assessed per Ivey and Barton: determine actual belief in facts, then apply an objective standard.
• Intent relates to gain/loss or risk of loss; actual loss is not required.
• For s2, pin down the representation (including implied and to machines) and knowledge that it was or might be untrue.
• For s3, prove a legal duty to disclose; moral expectations are not enough.
• For s4, show the expectation to safeguard financial interests and how it was abused (by act or omission).
• Consider related offences: s6/s7 (articles), s11 (obtaining services dishonestly), and Theft Act 1978 s3 (making off).
• Max sentence for fraud under the Act is up to 10 years; consult Sentencing Council guidelines.

Quick Reference