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Fraud: the three ways of committing fraud
Under the Fraud Act 2006 a person commits fraud by dishonestly making a false representation, failing to disclose information they are legally obliged to disclose, or abusing a position of trust, intending to make a gain or cause a loss. The maximum sentence is 10 years.
The offence
Section 1 of the Fraud Act 2006 creates a single offence of fraud, committed in three ways:
- False representation (s.2): dishonestly making a representation that is untrue or misleading, knowing that it is or might be, intending to make a gain or cause a loss. The representation can be express or implied, and made by words or conduct, including to a machine (s.2(5)).
- Failing to disclose information (s.3): dishonestly failing to disclose information that the defendant is under a legal duty to disclose.
- Abuse of position (s.4): dishonestly abusing a position in which the defendant is expected to safeguard, or not act against, another's financial interests, for example an employee, trustee or carer. The abuse can be by omission as well as by an act.
No gain or loss actually has to occur; the intention is enough. Gain and loss mean money or other property, temporary or permanent (s.5).
Dishonesty
The test is that in Ivey v Genting Casinos [2017] UKSC 67, applied in criminal cases by R v Barton and Booth [2020] EWCA Crim 575: what the defendant actually knew or believed about the facts, and whether, in that light, the conduct was dishonest by the standards of ordinary decent people. The defendant does not have to realise that ordinary people would regard it as dishonest.
Related offences and penalties
- Fraud is triable either way, with a maximum of 10 years.
- Possessing articles for use in fraud (s.6) carries up to 5 years; making or supplying articles for use in fraud (s.7) up to 10 years; obtaining services dishonestly (s.11) up to 5 years.
- Since 1 September 2025, a large organisation commits the corporate offence of failure to prevent fraud if an employee or agent commits fraud intending to benefit it, unless it had reasonable fraud prevention procedures (Economic Crime and Corporate Transparency Act 2023 s.199).
- Sentencing follows the Sentencing Council fraud guideline, which turns on culpability and harm, mainly the financial loss. Confiscation proceedings under the Proceeds of Crime Act 2002 often follow conviction.
Investigation and trial
Serious or complex fraud may be investigated by the Serious Fraud Office, which can compel answers and documents under s.2 of the Criminal Justice Act 1987. There is no time limit for prosecuting fraud in the Crown Court. Proposals in the Courts and Tribunals Bill would allow some long or complex fraud trials to be heard by a judge without a jury; these are not yet law.
Authorities: Fraud Act 2006 ss.1 to 7, 11; Ivey v Genting Casinos [2017] UKSC 67; R v Barton and Booth [2020] EWCA Crim 575; Economic Crime and Corporate Transparency Act 2023 s.199; Criminal Justice Act 1987 s.2; Proceeds of Crime Act 2002; Sentencing Council, Fraud, Bribery and Money Laundering Offences definitive guideline; Courts and Tribunals Bill (bill 4083)