In the wake of recent bank mis-selling scandals, it has become clear that fraud is an ongoing problem in the UK. Despite radical changes in the definition of fraud, thanks to the Fraud Act 2006, fraud still costs UK residents billions of pounds each and every year.
The most recent fraud act, the Fraud Act 2006, began being enforced on January 15th of 2007. Although it has made the crime of fraud much easier to understand and allowed the Crown to prosecute fraud cases much more easily, fraud continues to be a major offence plaguing the nation.
Prior to the Fraud Act 2006, the old laws regarding fraud dated back to the Theft Acts of 1978 and 1968, which led to technical arguments that made it difficult to practically apply the law. The Fraud Act 2006 simplified and widened fraud law, creating one single fraud offence as opposed to dozens of separate offences.
According to the new single offence of fraud governed by the Fraud Act 2006, the offence of fraud can be committed in the following three ways:
A person or corporate entity can be found guilty of fraud by false representation if the person or company knowingly makes a false representation in order to gain financially, inflict a financial loss on another party, or expose them to a risk of loss. With this offence, an actual loss does not have to occur and the victim does not even need to believe the offending party. Rather, the offender must only know that the representation they are making is false.
A person or company can be found in breach of this section of the amended fraud law if they engage in a dishonest act by failing to disclose information to another person that they are legally required to disclose, thereby gaining from the lack of disclosure, causing a loss, or causing the risk of loss to another person or company. The legal duty to disclose information can be in relation to solicitor/client relationships, banker/client relationships, and so on.
This is an offence that can be committed by someone who occupies a position in which they are expected to safeguard the financial interests of another individual or company, but abuses their position to experience financial gain, cause a loss, or openly allow another individual to be exposed to a risk of loss. An example of this type of offence can include a software company employee who clones the company’s software products for his or her own financial gain, or even a person who gives discounts to their friends or relatives.
All three of these sections of the amended fraud law pertain to multiple types of fraud. However, they are widely viewed as an attempt to dissuade banks and investment firms from profiting off of the losses of unknowing clients, such as what was evidenced by the PPI scandal that recently gripped the nation. In fact, thanks to the Fraud Act 2006 and the efforts of the FCA, Barclays, Lloyd’s, and countless other banks have been forced to pay out billions and billions of pounds to victims of mis-selling.
The Fraud Act 2006 may have been a step forward in preventing fraud in the 21st century, but it has really only been effective in redefining fraud. Today, the enforcement of fraud regulation is compartmentalised under the authority of numerous agencies and groups, making it more difficult to track, report, and prosecute fraudsters. For instance, victims of mortgage fraud must notify the FCA, and large corporate fraud cases are overseen by the SFO.
Thanks to the need for a more unified approach to fraud prevention, detection, and enforcement, a new fraud initiative has recently been created by a coalition of voluntary, private, and public organisations in an effort to reduce fraud in the UK by 2017.
Fighting Fraud Together, commonly referred to as FFT, says its primary objective is to make the UK less vulnerable to fraud. The coalition plans to reach this objective by enacting tougher law enforcement measures to prevent future cases of fraud and by increasing the ability and need for firms to prevent more fraud.
The organisational bodies involved in FFT include:
The coalition plans to develop and implement a roadmap for sharing intelligence, which will increase the flow of information between agencies on known fraud cases between the private and public sectors.
According to a Home Office document regarding the initiative, the organisations will overcome limited police resources by fostering innovative partnerships that work across the National Crime Agency, police forces, the Economic Crime Command, other law enforcement agencies, and both public and private sectors.
Fraud is an ongoing issue in the UK, but in the face of new challenges, it is apparent that the country is adamant in its desire to reduce fraud across the board.