What is Fraud by False Representation?
Fraud by false representation is dealt with in Section 2 of the UK Fraud Act 2006, due to the recent increase in fraudulent crimes conducted in this manner. Fraud by false representation involves an individual consciously being dishonest in their account of a certain situation in a way that gains a favourable outcome for the fraudster. It is important to understand when fraud by false representation has occurred and to remain vigilant, as this type of fraud has increased in recent years.
Fraud by false representation:
Section 2 of the UK Fraud Act 2006 stipulates the offence of fraud by false representation. To be found guilty of fraud by false representation, an individual must have made a false representation with the objective of gaining a benefit for either themselves or another individual, at the expense of a loss for the victim.
What is 'false' representation? False means that whatever is being represented is purposely misleading or untrue. Section 2 is focused on the Dishonesty Element. To decide whether dishonesty has occurred, the two following factors will be taken into consideration:
- Objective: If the prosecutors believe that an individual's objective was dishonest, then they will have to consider the following factor.
- Subjective: The prosecutors here will have to decide whether the individual was consciously aware that they were being dishonest, and not just confused by the situation which they were presenting an account of. It tends to be fairly obvious if an individual was aware of their dishonesty and can therefore be the final stage in deciding if an individual is guilty of fraud by false representation.
If it is decided that an individual is responsible for fraud by false representation, then the maximum sentence for this will be 10 years' imprisonment subject to the UK Fraud Act 2006 penalty thresholds.
The fire at Grenfell Tower in the UK in June 2017 has been subject to many fraud investigations in recent months following the disaster. Some individuals in the aftermath have claimed that they were residents at Grenfell Tower before the fire, allowing them to claim cash and compensation from the government through fraud by false representation. By July 2018, there have so far been six convicted criminals on charges of fraud by false representation.
The most recent conviction is that of 26-year-old Yonatan Eyob, who claimed £81,000 from the government in cash for compensation following the fire and free accommodation, as well as a further £11,000 towards new permanent housing. Eyob claimed that he lived in one of the flats in Grenfell Tower. However, the flat that Eyob said he lived in was actually home to a family of five, who tragically died in the fire.
Neighbours' testimony and an investigation into Grenfell Tower's CCTV show that Eyob had never actually lived at the Tower and therefore he has been ordered to appear at Isleworth Crown Court on 24 August 2018 to face sentencing for fraud by false representation. Eyob's charge includes dishonesty for making a false representation for accommodation and subsistence between June 2017 and June 2018.
Fraud by false representation can be common, and individuals and organisations need to be aware of when this could have potentially happened. If you believe that fraud by false representation could have taken place, then you should report this crime to Action Fraud, the UK's national fraud and cyber crime reporting centre.