Fraud Act 2006
The Fraud Act created a statutory offence of fraud, committed in one of three ways, where a person dishonestly:
1 makes a false representation, or
2 wrongfully fails to disclose information, or
3 secretly abuses a position of trust
with intent to make a gain or to cause loss or to expose another to the risk of loss.
It should be noted that the new offence relies on proof of dishonesty on the part of the defendant, rather than the effect of any representations made on the mind of the victim, as in traditional offences of deception.
A person wrongfully fails to disclose information to another person if he or she is under a legal duty to disclose it; or if the information is of a kind which he or she is trusted to disclose, and it is
reasonable to expect him or her to disclose it.
A person secretly abuses a position of trust, when they have been given a position in which they are expected to safeguard another's financial interests, and they abuse that position without the other's knowledge.
The Act also created two new offences:
* Obtaining services dishonestly; this will cover a situation where a credit card that has been
improperly obtained is used to obtain services from the internet, or any other situation where false information is
provided to a machine. This conduct could not be charged
as an offence under current law as deception is an element
required in order to obtain services by deception under the
* Possessing articles for use in frauds, this will mean that
computer programs designed to generate credit card details
that are then used to commit or facilitate fraud will be covered by this new offence.
One of the notable features of the new offence of fraud is that the offences are sufficiently flexible
to allow prosecutions where a defendant has been proved to have acted dishonestly, irrespective of the method used to carry out the offence, thus allowing for the law to keep pace with technological advances.
The Act came into effect from 15 January 2007. In most cases the maximum sentence for an offence is 10 years.
The Fraud Advisory Panel
The Fraud Advisory Panel was established in 1998. Its published objectives were:
* working with government and other public bodies to reform the law and public policy as it
relates to fraud;
* developing proposals for improving the investigation and prosecution of fraud;
* advising businesses on problems and techniques in fraud prevention, detection and reporting;
* improving education and training in all sectors of business and the professions;
* establishing a more accurate picture of the extent, causes and nature of fraud;
They have published several useful booklets aimed at SMEs which should be read by all SME advisors and auditors (available at www.fraudadvisorypanel.org).