The Fraud Act 2006: The E-Crime Prosecutor's Champion or the Creator of a New Inchoate Offence?

Abstract

After a considerable gestation period, the Fraud Act 2006 came into force on 15th January 2007. The introduction of general offences is intended to provide scope to ensure that technologically focused crime can be targeted. However, whilst the sentiments behind the new Act are to be welcomed, it is argued that there are a number of deficiencies in the new Act, which could lead to considerable problems. First, although the Act shifts focus away from deception problems (notably that deception of a machine or computer is not legally possible) it moves towards the concept of dishonesty, which is problematic in itself as there already exists a number of criticisms relating to this concept. Second, there are problems with a failure of the Act to provide for specific definitions of key concepts, such as ‘fraud’, ‘false’ or ‘abuse’. Third, and arguably most importantly, under the new Act the liability-threshold for fraud shifts; fraud is no longer a result crime, but a conduct crime. This has the advantage of the law stepping in at an early stage to prevent further criminality; although at the same time potentially provides a completely new concept of the criminal act of fraud.

Notes

1 A full version of the Fraud Act 2006 can be found at http://www.opsi.gov.uk/acts/acts2006/20060035.htm

2 There are further new offences included in the Act, such as possessing articles for the use in frauds (section 6), making and supplying articles for the use in frauds (section 7) and obtaining services dishonestly (section 11), but this article focuses upon the general fraud offence.

3 Respectively, obtaining property by deception, obtaining a money transfer by deception, obtaining a pecuniary advantage by deception and procuring the execution of a valuable security by deception.

4 Respectively, obtaining services by deception and evasion of liability by deception. (A full list of repeals and revocations can be found in Schedule 3.)

5 DPP v Ray [1974] AC 370. Lord Morris stated (at p 384): ‘For a deception to take place there must be some person or persons who will have been deceived.’ Further, in Re London and Global Finance Corporation Limited [1903] 1 Ch 728, Buckley J stated (at p 732): ‘To deceive is … to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows and believes it to be false.’

6 [1982] QB 1053.

7 Ibid, p 1064.

8 D Ormerod ‘The Fraud Act 2006—criminalising lying’, Criminal Law Review March, pp193–219, 2007 at p 200.

9 S Barty and P Carnell ‘Fraud Bill offers new protection against technology abuse’, World Internet Law Report Vol 6, No 7, pp 20–21, 2005.

10 A T H Smith ‘Reforming section 16 of the Theft Act’, Criminal Law Review pp 259–267, 1977, at p 259.

11 Op cit, note 8, p 194.

12 Op cit, note 5.

13 See, for instance, the House of Lords' decision in R v Preddy [1996] AC 815.

14 (1971) 56 Cr.App.R 131, at p 136.

15 The Law Commission Fraud (Report No. 276), July 2002. The Report is available at http://www.lawcom.gov.uk/lc_reports.htm#2002 (accessed 23rd May 2007).

16 Op cit, note 13.

17 Op cit, note 15, p 16, para 3.14.

18 Home Office Consultation Paper ‘Fraud law reform’, May 2004. Available at http://www.homeoffice.gov.uk/documents/cons-fraud-law-reform/ (accessed 23rd May 2007).

19 D Bainbridge ‘Criminal law tackles computer fraud and misuse’, Computer Law and Security Report Vol 23, No 3, pp 276–281, 2007, at p 280.

20 Available at http://www.getsafeonline.org/media/GSO_Cyber_Report_2006.pdf (accessed 24th May 2007). Get Safe Online is the United Kingdom's first Internet security awareness campaign and is backed by the government and leading industry figures.

21 BBC News Press Release ‘UK fraud costs “top 20bn a year”’, 7th March 2007. Available at http://news.bbc.co.uk/1/hi/business/6425963.stm (accessed 14th March 2007).

22 BBC News Press Release ‘Reduction in card fraud in 2006’, 14th March 2007. Available at http://news.bbc.co.uk/1/hi/business/6445409.stm (accessed 14th March 2007).

23 See PublicTechnology.net Press Release ‘One third of UK firms do not report their security crime’, 5th April 2007. Available at http://www.publictechnology.net/modules.php?op=modload&name=News&file=article&sid=8540 (accessed 10th April 2007).

24 Criminal Attempts Act 1981, section 1(1).

25 ‘Gain’ and ‘loss’ are widely defined in section 5. ‘Gain’ includes a gain by keeping what one has, as well as a gain by getting what one does not have (section 5(3)), while ‘loss’ includes a loss by not getting what one might get, as well as a loss by parting with what one has (section 5(4)).

26 G R Sullivan ‘Fraud—the latest Law Commission proposals’, Journal of Criminal Law Vol 67, No 2, pp 139–148, 2003.

27 Criminal Law Act 1977, section 1.

28 Fraud Act 2006, section 2(5).

29 Re Yarimaka (2002) EWHC 589.

30 Op cit, note 5 and also note section 2(5) ‘with or without human intervention’, which appears designed to put this problem beyond doubt.

31 Criminal Law Revision Committee, Eighth Report (1966), Cmnd 2977 at para 39.

32 R v Feely [1973] QB 530.

33 Op cit, note 7.

34 The honesty of the defendant is a question of fact for the jury to decide—R v Feely [1973] QB 530.

35 [1982] 2 All ER 689 at 691.

36 See Hinks [2000] 3 WLR 1590.

37 Joint Parliamentary Committee on Human Rights ‘Fourteenth report’. Available at http://www.publications.parliament.uk/pa/jt200405/jtselect/jtrights/jtrights.htm (accessed 19th June 2007).

38 [1978] 1 WLR 873.

39 R v Ghosh [1982] 2 All ER 698 at 691.

40 Op cit, note 8.

41 Jones (1704) 2 Ld Raym 1013.

42 ‘Legislating the Criminal Code: Fraud and Deception Law Commission consultation paper number 155’, 1999. Available at http://www.lawcom.gov.uk/closed_consultations.htm (accessed 19th June 2007).

43 This is only an indicative list made up of examples from the various consultation papers and other documents read in researching for this paper.

44 S D Moitra ‘Developing policies for cybercrime’, European Journal of Crime, Criminal Law and Criminal Justice Vol 13, No 3, pp 435–464, 2005, at p 436.

45 Ibid.

46 As a starting point for further reading in this area, the authors would suggest A Flanagan ‘The law and computer crime: reading the script of reform’, International Journal of Law and Information Technology Vol 13 (March), pp 98–117, 2005 and C Wild, S Weinstein and N MacEwan Internet Law, 1st edn, Old Bailey Press (especially chs 8, 9 and 10), London, 2005.

47 S Wilson ‘“Collaring” the crime and the criminal? “Jury psychology” and some criminological perspectives on fraud and the criminal law’, Journal of Criminal Law Vol 70, No 1, pp 1–26, 2006, at p 1.

48 Ibid, p 26.

49 As one example see BBC News Press Release ‘Police “need more e-crime skills”’, 18th May 2004. Available at http://news.bbc.co.uk/1/hi/technology/3725305.stm (accessed 19th June 2007).

50 Op cit, note 23.

51 Ibid.

52 S Saxby (ed) ‘Microsoft and the open source community agree more must be done to make reporting cyber-crime easier’, Computer Law and Security Report Vol 23, No 3, pp 211–226, 2007, at para 1.12.

53 Op cit, note 9, at p 21.