What Is the Fraud Act 2006?

Section 2 — Fraud by false representation
A person commits this offence if they dishonestly make a false representation and intend, by making it, to make a gain for themselves or another, or to cause loss to another or to expose another to risk of loss. A representation is false if it is untrue or misleading. It can be express or implied, made in writing, verbally, or by conduct. It can be made to a machine as well as to a person.

Section 3 — Fraud by failing to disclose information
A person commits this offence if they dishonestly fail to disclose to another person information which they are under a legal duty to disclose, and intend, by failing to disclose it, to make a gain or cause a loss. The legal duty to disclose may arise from statute, the general law, or the terms of a contract.

Section 4 — Fraud by abuse of position
A person commits this offence if they occupy a position in which they are expected to safeguard, or not to act against, the financial interests of another person, dishonestly abuse that position, and intend, by doing so, to make a gain or cause a loss. This offence covers employees who misuse their positions for personal gain, and professionals who act against their clients’ interests.

All three section 2, 3, and 4 offences require proof of dishonesty. Following the Supreme Court decision in Ivey v Genting Casinos [2017] UKSC 67, dishonesty is assessed objectively: what were the defendant’s actual knowledge and beliefs, and was the conduct dishonest by the standards of ordinary decent people? The defendant’s subjective belief that their conduct was not dishonest is not a defence if ordinary decent people would regard it as dishonest.

Each offence requires an intent to make a gain or cause a loss. Gain and loss are defined in section 5 of the Act as extending only to gain or loss in money or other property. A temporary gain or loss is sufficient. Critically, actual gain or loss does not need to result — the intent to make a gain or cause a loss is sufficient to complete the offence. This is why a person can be convicted of fraud even where the intended victim was not deceived and suffered no loss.

The maximum sentence for all three section 2, 3, and 4 offences is 10 years imprisonment on indictment. In the magistrates’ court, the maximum is 12 months (rising to 2 years when provisions are brought into force). Sentencing in practice depends on the amount involved, the degree of planning and culpability, the impact on victims, and the individual’s previous record.