Loopholes in Fraud Act 2006 - Essay Example

?Running Head: LOOPHOLES IN FRAUD ACT 2006 Loopholes in Fraud Act 2006 In this increasing age of fraud and deception, stringent laws are necessary to curb such fraudulent actions. While no Act can be formed that can guarantee complete removal of criminal activities, the most pressing problem is that fraudsters go to any length to find loopholes in the Acts to ensure escape from the eyes of law. However, lawmakers persistently attempt to close the net over all potential criminals by forming new Acts. This paper elaborates the loopholes in the current Fraud Act 2006. Theft Act 1968 The basic definition of theft as per the Theft Act 1968 is that theft is caused when a person without any authority takes away another person’s property without the intention of every returning the same thereby depriving the other person of it. Such an action shall be construed as theft regardless of whether the thief has taken it for gain or for personal benefit. Sections 3 to 6 of the Act define the terms “appropriates”, “property”, “belonging to another” and “with the intention of permanently depriving the other of it”. (Theft Law 1968, n.d.). Since criminal law deals with accusation and punishment for offenders, it is important that a correlation be established between blameworthiness and criminal liability for serious illegal activities. This argument is more applicable for theft because in this offence the other elements related to the appropriation are not properly defined, and so it is only the element of dishonesty that is assessed for punishment under law. In case the other elements related to the appropriation are judged to assess their wrong culture, it is however not possible to establish criminal liability on the defendant without some kind of judgement on the moral perspective of the defendant’s actions. Finally, it has to be proved that the defendant had the full intention to permanently deprive the owner of the property from enjoying interest of the property (Clarkson, 2005, p.238). Although the clause “intention of permanently depriving” is not clearly defined in the Theft Act 1968, it is however mentioned that borrowing or lending is considered as theft if the “borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal.” (Theft Law 1968, n.d.) For example, if a person takes a cinema ticket from its owner and returned it after the completion of the movie, then it is as good as depriving the owner permanently of enjoying the interest of the ticket because when returned the ticket has no usage value left (Clarkson, 2005, p.238). Fraud Act 2006 The Fraud Act 2006 was implemented to “make provision for, and in connection with, criminal liability for fraud and obtaining services dishonestly.” (Fraud Act 2006, n.d., p.1) The Fraud Act has revised the Theft Act 1968 in many respects. Some sections of the Theft Act have been removed in Schedule 1 of the Fraud Act and they are section 15, section 15A, section 16 and section 20(2). Section 15 is about “obtaining property by deception”, section 15A is about “obtaining a money transfer by deception, section 16 is about “obtaining pecuniary advantage by deception”, and section 20(2) is about “procuring the execution of a valuable security by deception”. (Fraud Act 2006, n.d., p.7) The principle objective of the Fraud Act was to present the previous criminal law in a reformed manner so as it make it more acceptable for juries and practitioners. In this modern world of technology, fraudulent activities are rapidly becoming sophisticated and complicated by enhanced use of technology. It is increasingly becoming tough to catch the fraudsters and then prove their offence in court. Therefore the purpose of the Fraud Act is to form a “modern and flexible law of fraud” that is suitable to combat the increasing complications of fraudulent activities (Post-legislative assessment of the Fraud Act 2006, 2012, p.3). The Fraud Act associates itself with general activities that are regarded as fraudulent activities as in section 1. Such fraudulent actions can take place under three circumstances – a) section 2 is about false representation of facts by dishonest means either for the personal gain of the fraudster or for the gain or loss of other persons, b) section 3 is about non-disclosure of facts by dishonest means either for the personal gain of the fraudster or for the gain or loss of other persons, and c) section 4 deals with abuse of position which means occupation of position dishonestly by a person who is only supposed to safeguard that position for the personal gain of the fraudster or for the gain or loss of other persons. Unlike the Theft Act, the fraudulent activities under the Fraud Act may not have caused actual loss or gain, but such activities have been conducted with the intention to cause loss or gain. (Post-legislative assessment of the Fraud Act 2006, 2012, p.3; Fraud Act 2006, n.d., p.7). Offence of theft overlaps the offence of fraud According to the Theft Law 1968, a theft is committed only when a property is dishonestly appropriated with the intention to permanently deprive the owner of his rights on the property. The main elements of theft in this case have to be dishonesty and intention to permanently deprive. This creates an overlap with the offence of fraud under the Fraud Act 2006. This is because under the Fraud Act any action is considered as fraud if committed with dishonesty like obtaining services, making false representations, not disclosing information, abusing a position or unduly retaining any property under Theft Act. The most significant criticism surrounding the Fraud Act is that there are too many offences that have been specified as fraud, and the consequences described by the Act have been too many. This often makes it difficult to properly assess a fraudulent action and as a result convicting and proving become a tough job. A grave problem of the Fraud Act is that it intends to “focus on the mind of the victim rather than the mind of the offender.” (Summers, 2008, p.11) Under the Theft Act, it was necessary to prove that the offender has taken a property by dishonest measures, and the victim could have continued to possess the property if not for the deception. This element of the Theft Act became difficult in recent years because of technological innovations and increased use of credit cards, or payment through internet (Summers, 2008, p.11). To bring a solution to this problem, the current Fraud Act has revoked certain sections (already mentioned) of Theft Act. Apparently, this has shifted the emphasis from deception problems more because in this technological era machines or computers cannot be legally accused of deception. For instance, if a person buys goods with a credit card, then the vendor shall be satisfied with the transaction not bothering whether the purchaser is the true owner of the credit card. But, the amount spent on the goods will be included in the credit card bill statement of the true owner, thus making the owner liable to pay the amount (Summers, 2008, p.11). Section 3 of Fraud Act states non-disclosure of information by fraud. This element does not make provision for the fact that the victim and the offender may be known to each other before the fraud has been committed. This paves way for a level of trust, and the offender may not actually hide any information (victim already knows everything about him) but may in essence misuse the information. These two examples point to the fact that the Fraud Act 2006 is not without loopholes, and its effort to include wider number of offences as fraud is not always effective considering the constant technological innovations and increased dependence on machines. Conclusion The Fraud Act is an attempt to provide more scopes within the legislation by including numerous activities that can be defined as fraud so that offenders do not go unpunished. However, technological advances of this era make it difficult to assess deceptions and as a result the effectiveness and the principles of the Act are doubted. References 1. Clarkson, C.M.V. (2005) Understanding Criminal Law: 4th ed. London: Sweet & Maxwell 2. Fraud Act 2006 (n.d.) legislation, retrieved on February 24, 2013 from: http://www.legislation.gov.uk/ukpga/2006/35/pdfs/ukpga_20060035_en.pdf 3. Post-legislative assessment of the Fraud Act 2006 (June 2012) justice, retrieved on February 24, 2013 from: http://www.justice.gov.uk/downloads/publications/corporate-reports/MoJ/2012/post-legislative-assessment-fraud-act-2006.pdf 4. Summers, B. (2008) The Fraud Act 2006: has it had any impact? Amicus Curiae, No.75, 10-18 5. Theft Law 1968 (n.d.) legislation, retrieved on February 24, 2013 from: http://www.legislation.gov.uk/ukpga/1968/60 Read More