The Fraud Act 2006 is the main criminal statute governing fraud in England, Wales, and Northern Ireland. It defines a single offence of fraud that can be committed in three ways — false representation, failing to disclose information, and abuse of position — and adds related offences covering fraud tools, dishonest services, and fraudulent trading. The most serious offences carry up to 10 years in prison on indictment, together with unlimited fines and the possibility of having criminal proceeds confiscated.
The Three Ways You Commit Fraud
Section 1 creates one offence of fraud, committed in any of three ways set out in Sections 2, 3, and 4. All three share the same core: dishonesty, and an intent to make a gain or cause a loss. “Gain” and “loss” cover only money or property, but the definitions are broad. A gain includes keeping what you already have. A loss includes not getting something you otherwise would have received. Temporary gains count.1Legislation.gov.uk. Fraud Act 2006
Fraud by False Representation
Under Section 2, you commit fraud if you dishonestly make a representation that is untrue or misleading, knowing it is or might be false, intending to make a gain or cause a loss.2Legislation.gov.uk. Fraud Act 2006 – Fraud by False Representation The representation can be spoken, written, or implied through conduct. Using a credit card you know has been cancelled involves an implied representation that the card is valid and you are authorised to use it.
No one needs to actually believe the lie, and no one needs to lose anything. The offence is complete the moment the false statement is made with the dishonest mindset and the required intent.
Fraud by Failing to Disclose Information
Section 3 covers silence rather than active deception. You commit this offence by dishonestly failing to disclose information you are legally required to share, intending to make a gain or cause a loss.3legislation.gov.uk. Fraud Act 2006 – Section 3 What sets it apart is the legal duty. That duty might come from a statute, a contract, a transaction requiring utmost good faith such as insurance, the customs of a trade, or a fiduciary relationship like solicitor and client.4Legislation.gov.uk. Fraud Act 2006 Explanatory Notes – Section 3
A common example is hiding a pre-existing health condition on an insurance application to secure lower premiums. The duty to speak is not a general moral one; the law has to already recognise it.
Fraud by Abuse of Position
Section 4 applies when you occupy a position where you are expected to safeguard someone else’s financial interests and you dishonestly abuse that position for gain or to cause loss.5Legislation.gov.uk. Fraud Act 2006 – Section 4 That covers employees handling company finances, trustees, solicitors with client funds, and informal arrangements such as a family member holding power of attorney for an elderly relative.
The abuse can be active, like diverting funds, or a deliberate failure to act, like not collecting a debt owed to the person you are supposed to protect. Most internal company fraud and carer abuse cases are charged under this section because the defendant’s position gave them access an outsider would never have had.
What Counts as Dishonesty
Every offence under the Act requires dishonesty, and the courts apply a two-stage test from the Supreme Court decision in Ivey v Genting Casinos [2017] UKSC 67. First, the court establishes what the defendant actually knew or believed about the facts at the time. Then it asks whether, on those facts, ordinary reasonable people would consider the conduct dishonest.
Your own view of your conduct is irrelevant. If you genuinely believed the facts were different from what they were, you get the benefit of that belief. But a personal moral code that treats the behaviour as acceptable is no defence.
Other Offences Under the Act
Possessing or Making Fraud Articles
Section 6 makes it an offence to possess or control any article intended for use in fraud.6Legislation.gov.uk. Fraud Act 2006 – Section 6 Section 7 covers making, adapting, or offering to supply such articles. Section 8 defines “article” broadly to include programs and data in electronic form, so card-skimming hardware, phishing software, databases of stolen personal information, and counterfeit identity documents all qualify.7Legislation.gov.uk. Fraud Act 2006
Obtaining Services Dishonestly
Under Section 11, you must actually obtain a service for which payment is required, do so by a dishonest act, and intend to avoid paying.8Legislation.gov.uk. Fraud Act 2006 – Section 11 Obtaining Services Dishonestly You also have to know, or at least suspect, that the service is chargeable. Using someone else’s streaming login knowing you have no right to it is a straightforward example. Unlike the main fraud offence, intent alone is not enough. The service must be obtained, and the offence cannot be committed by omission alone.9Legislation.gov.uk. Fraud Act 2006 Explanatory Notes – Section 11
Participating in Fraudulent Business
Section 9 extends fraudulent trading beyond companies. You commit this offence by knowingly taking part in running a business with intent to defraud creditors or for any other fraudulent purpose, whether the business is incorporated or not.10Legislation.gov.uk. Fraud Act 2006 Explanatory Notes – Section 9 It targets people exercising a controlling or managerial function, and a single transaction can be enough if the circumstances show fraudulent intent.
Maximum Sentences
Penalties depend on which court hears the case. In a magistrates’ court, the maximum custodial sentence for any Fraud Act offence is 12 months in England and Wales,11Legislation.gov.uk. Sentencing Act 2020 – Section 224 and six months in Northern Ireland.1Legislation.gov.uk. Fraud Act 2006 Serious or complex cases go to the Crown Court for trial on indictment, where the maximum sentences are much higher.
On indictment, the maximum prison terms are:
- 10 years for fraud under Section 1 (false representation, failing to disclose, or abuse of position), making or supplying fraud articles under Section 7, and participating in fraudulent business under Section 9.12The Crown Prosecution Service. Fraud Act 2006
- 5 years for possession of fraud articles under Section 6 and obtaining services dishonestly under Section 11.12The Crown Prosecution Service. Fraud Act 2006
Fines on indictment are unlimited. The statute simply says “a fine,” which under English sentencing law lets the judge set whatever figure the circumstances warrant.1Legislation.gov.uk. Fraud Act 2006 The actual sentence depends on Sentencing Council guidelines, including the value of the fraud, the planning involved, the defendant’s role, and the harm to victims. A first-time offender in a low-value, unsophisticated fraud may receive a community order. Someone who ran a multi-million-pound scheme targeting vulnerable victims will be sentenced near the top of the range.
Confiscation and Compensation
Prison and fines are not the end of the financial exposure. Under the Proceeds of Crime Act 2002, the Crown Court can make a confiscation order stripping the defendant of the financial benefit they gained from their conduct. The court must consider one whenever the prosecution asks or the court thinks it appropriate.13Legislation.gov.uk. Proceeds of Crime Act 2002 – Confiscation Orders
The recoverable amount starts at the total benefit obtained. If the defendant can show their available assets are worth less, the order is capped at what they actually have, but unpaid amounts accrue interest and the order does not disappear. Enforcement can be revisited if the defendant later acquires assets, and failure to pay can mean extra prison time on top of the original sentence.
Courts can also make compensation orders requiring the defendant to pay victims directly for stolen funds or consequential losses. These can run alongside other sentences, or in straightforward cases stand as the sole penalty.
When Companies and Their Officers Are Liable
Companies can be prosecuted for fraud, but historically it was hard. Under the common law “identification doctrine,” prosecutors had to show that someone representing the “directing mind and will” of the company committed the offence, which was often impossible in large organisations with diffuse decision-making.14GOV.UK. Economic Crime and Corporate Transparency Act Identification Principle for Economic Crime Offences
The Economic Crime and Corporate Transparency Act 2023 widened the test. A “senior manager” is now anyone playing a significant role in decisions about a substantial part of the organisation’s activities, regardless of job title. The Act also created a new offence of failure to prevent fraud, which came into force on 1 September 2025. It applies to large organisations meeting at least two of three thresholds: turnover above £36 million, a balance sheet above £18 million, or more than 250 employees. If an employee or associate commits a fraud offence intending to benefit the organisation, the organisation is guilty unless it can prove it had reasonable fraud prevention procedures in place.15Legislation.gov.uk. Economic Crime and Corporate Transparency Act 2023 – Failure to Prevent Fraud
Section 12 of the Fraud Act itself puts personal liability on company directors, managers, and secretaries where a fraud offence by the company was committed with their consent or connivance. They face the same penalties as if they had committed the offence themselves.16Legislation.gov.uk. Fraud Act 2006 – Section 12 Liability of Company Officers for Offences by Company
Fraud Committed Across Borders
Fraud rarely stays in one country, and the law accounts for that. Under Part 1 of the Criminal Justice Act 1993, English courts have jurisdiction over fraud offences if any “relevant event” happened in England and Wales. A relevant event means any act, omission, or result forming part of the offence, including where a gain or loss actually occurred.17Legislation.gov.uk. Criminal Justice Act 1993 Part 1 The defendant does not need to be a British citizen or to have been physically present here.
If someone abroad sends a phishing email to victims in England and money moves from an English bank account, that is enough. A UK-based fraudster targeting victims overseas can also be prosecuted here if any element of the offence took place domestically. Information sent to or from a place in England and Wales counts as a communication within the jurisdiction.
Conspiracy to Defraud Still Exists
The Fraud Act did not abolish the common law offence of conspiracy to defraud. Prosecutors are expected to look at statutory offences first, but conspiracy to defraud is still used in two situations. One is complex cases involving multiple types of criminal conduct, several jurisdictions, or organised networks, where a single charge is clearer than dozens of statutory counts. The other is conduct that falls outside the Act altogether, such as dishonestly obtaining confidential information or intellectual property that cannot be stolen in the traditional sense.18GOV.UK. Use of the Common Law Offence of Conspiracy to Defraud If you are facing a fraud allegation, the charge may come from this older common law rather than from the Fraud Act itself.