Defraud

Defraud
Defraud
Quick Summary of Defraud

To defraud means to deceive someone for personal gain or to cause them harm through deceitful or dishonest conduct. It involves intentionally misleading or tricking another person or entity, often for financial or material gain. Examples of fraud include making false representations, concealing information, or manipulating facts to deceive someone into giving up money, property, or rights. Defrauding can occur in various contexts, such as business transactions, financial schemes, insurance claims, and contracts. It is considered a criminal offence and can result in legal consequences, including fines, restitution, and imprisonment.

What is the dictionary definition of Defraud?
Dictionary Definition of Defraud

v. to use deceit, falsehoods or trickery to obtain money, an object, rights or anything of value belonging to another.

Full Definition Of Defraud

Defrauding, often referred to as fraud, is a complex crime that involves deceitful practices intended to secure an unlawful gain, typically of a financial nature. In British law, defrauding covers a wide range of activities that are both criminal and civil in nature. The core concept of fraud revolves around intentional deception made for personal gain or to cause a loss to another individual or entity. This legal overview will delve into the various aspects of defrauding, including its definitions, types, statutory frameworks, and case law within the context of British law.

Definition of Fraud

Fraud in British law is broadly defined under the Fraud Act 2006, which consolidates and modernises the law relating to fraud. According to the Act, fraud can be committed in three primary ways:

  1. Fraud by false representation: This involves knowingly making a false representation with the intent to make a gain for oneself or another, or to cause a loss to another or expose another to the risk of loss.
  2. Fraud by failing to disclose information: This occurs when an individual dishonestly fails to disclose information that they are legally obliged to disclose, with the intent to make a gain or cause a loss.
  3. Fraud by abuse of position: This involves abusing a position where there is an expectation to safeguard, or not to act against, the financial interests of another person, with the intent to make a gain or cause a loss.

Elements of Fraud

For a conviction of fraud to occur under the Fraud Act 2006, the prosecution must prove the following elements:

  • Dishonesty: The defendant must have acted dishonestly. The test for dishonesty, as clarified by the Supreme Court in Ivey v Genting Casinos [2017] UKSC 67, is whether the defendant’s conduct would be considered dishonest by the standards of ordinary, reasonable people.
  • False Representation, Failure to Disclose, or Abuse of Position: The specific method of fraud (false representation, failure to disclose, or abuse of position) must be established.
  • Intent: The defendant must have had the intent to make a gain for themselves or another, to cause a loss to another or expose another to the risk of loss.

Types of Fraud

Fraud can manifest in numerous ways, encompassing both individual and organised schemes. Some of the most common types include:

  1. Credit Card Fraud: This involves the unauthorised use of another person’s credit card information to make purchases or withdraw funds.
  2. Insurance Fraud: This occurs when an individual makes a false insurance claim to receive benefits or compensation they are not entitled to.
  3. Tax Fraud: This includes evading taxes by underreporting income, inflating deductions, or hiding money and assets.
  4. Benefit Fraud: This involves claiming state benefits to which one is not entitled by providing false information or failing to report a change in circumstances.
  5. Identity Fraud: This occurs when someone uses another person’s personal information, such as their name, Social Security number, or credit card number, without permission, to commit fraud or other crimes.
  6. Ponzi and Pyramid Schemes: These are investment scams promising high returns with little risk to investors, using the capital of new investors to pay profits to earlier investors.

Statutory Framework

The Fraud Act 2006 is the primary legislation governing fraud in England, Wales, and Northern Ireland. It outlines the offences, penalties, and enforcement mechanisms related to fraud.

Fraud Act 2006

The Fraud Act 2006 was enacted to simplify and codify the law on fraud, replacing various overlapping offences that existed under previous legislation. Key provisions of the Act include:

  • Section 2: Fraud by false representation. It is an offence to make a false representation dishonestly, intending to make a gain or cause a loss or risk of loss to another.
  • Section 3: Fraud by failing to disclose information. It is an offence to dishonestly fail to disclose information when there is a legal duty to do so, intending to make a gain or cause a loss or risk of loss.
  • Section 4: Fraud by abuse of position. It is an offence for a person to abuse their position where there is an expectation that they should act in good faith, with the intention of making a gain or causing a loss or risk of loss.
  • Section 11: Obtaining services dishonestly. It is an offence to obtain services dishonestly without payment being made, with the intention that payment is avoided.

The Act also includes provisions related to the penalties for fraud, which can include imprisonment, fines, or both. The maximum penalty for fraud under the Act is 10 years’ imprisonment.

Theft Act 1968

While the Fraud Act 2006 is the primary legislation for fraud offences, the Theft Act 1968 also covers certain fraudulent activities, particularly those involving theft and obtaining property by deception.

  • Section 15: Obtaining property by deception. This section, now largely replaced by the Fraud Act 2006, made it an offence to obtain property belonging to another by deception.
  • Section 16: Obtaining a pecuniary advantage by deception. This section, also largely replaced by the Fraud Act 2006, made it an offence to obtain a financial advantage by deception.

Civil Fraud

In addition to criminal liability, fraudulent activities can also give rise to civil liability. Victims of fraud can seek remedies through civil courts, including claims for damages, restitution, and the imposition of constructive trusts.

Case Law

British case law provides numerous examples and clarifications regarding the application of fraud laws. Some notable cases include:

  • R v Ghosh [1982] QB 1053: This case established the test for dishonesty, which was later modified by the Supreme Court in Ivey v Genting Casinos. The original Ghosh test included a subjective element (whether the defendant realised that what they were doing was dishonest by the standards of reasonable and honest people).
  • Ivey v Genting Casinos [2017] UKSC 67: This landmark case redefined the test for dishonesty. The Supreme Court held that the correct test is whether the defendant’s conduct would be considered dishonest by the standards of ordinary, decent people, without requiring the defendant to realise that their conduct was dishonest by those standards.
  • R v Jones [2007] EWCA Crim 1118: This case involved fraud by false representation, where the defendant made false statements about his income to obtain a mortgage. The Court of Appeal upheld the conviction, emphasising the importance of intent to deceive.

Enforcement and Prosecution

Fraud offences are investigated and prosecuted by various agencies in the UK, including the Crown Prosecution Service (CPS), the Serious Fraud Office (SFO), and the National Crime Agency (NCA). These agencies work collaboratively to investigate complex fraud cases, often involving significant financial resources and expertise.

Crown Prosecution Service (CPS)

The CPS is responsible for prosecuting criminal cases investigated by the police in England and Wales. It plays a crucial role in ensuring that fraud cases are brought to court and that justice is served.

Serious Fraud Office (SFO)

The SFO is a specialist prosecuting authority responsible for investigating and prosecuting serious and complex fraud, bribery, and corruption. It operates independently and focuses on cases involving significant financial loss and high public interest.

National Crime Agency (NCA)

The NCA leads the UK’s fight against serious and organised crime, including complex fraud cases. It works in partnership with other law enforcement agencies to disrupt and dismantle criminal networks involved in fraudulent activities.

International Fraud

Given the global nature of many fraudulent activities, international cooperation is often necessary to investigate and prosecute fraud. The UK is a signatory to various international agreements and conventions that facilitate cross-border cooperation in tackling fraud.

Prevention and Education

Preventing fraud is a key priority for both government and private sector organisations. Various initiatives aim to raise awareness about fraud, educate the public and businesses on how to protect themselves, and promote best practices in fraud prevention.

Conclusion

Fraud is a multifaceted crime that poses significant challenges to individuals, businesses, and law enforcement agencies. British law, primarily through the Fraud Act 2006, provides a robust framework for defining, prosecuting, and penalising fraud. However, the evolving nature of fraudulent schemes requires continuous efforts in prevention, investigation, and international cooperation to effectively combat this pervasive issue. Through a combination of statutory provisions, case law, and enforcement mechanisms, the UK strives to uphold justice and protect its citizens from the detrimental impacts of fraud.

Related Phrases
No related content found.
Disclaimer

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 9th June 2024.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

  • Page URL:https://dlssolicitors.com/define/defraud/
  • Modern Language Association (MLA):Defraud. dlssolicitors.com. DLS Solicitors. June 22 2024 https://dlssolicitors.com/define/defraud/.
  • Chicago Manual of Style (CMS):Defraud. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/defraud/ (accessed: June 22 2024).
  • American Psychological Association (APA):Defraud. dlssolicitors.com. Retrieved June 22 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/defraud/
Avatar of DLS Solicitors
DLS Solicitors : Family Law Solicitors

Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.

All author posts