Fraud Act 2006

[andrew1]

Huh! Well now I know who my friends are!

 

[goldy36]

Hi everyone

I have npt really posted much in the past, however this thread has really caught my attention as it clarifies a lot of issues for me with both credit cards/3rd parties and also mortgages.

 

I would like to offer some exampes as to where this Fraud Act may be applicable. The "Devil is in the detail" and powers of detailed observation are required.

 

Example 1)- 3 rd party collection companies who claim they have bought a credit card debt. You receive a "Notice of Assignment" apparently from the original lender, which has in fact come from the office of the the 3rd party.

 

On closer inspection, certain give-aways may become apparent such as a different address, different registered office, different font style and maybe other small details that distinguish it from a letter that has genuinely come from the lender.

 

When challenged on the validity of this document, the standard excuse seems to be that they (3rd party) have permission from the orignal lender to send out letters on the lenders' letter -headed paper and that this is "in line with standard industry practise."

 

Known practicitioners of this are 1st credit, Cabot and Lowell!

 

Some of the creativley produced documents are much better than others!

 

Example 2- in court situations, where 3rd parties produce so-called "Notice of Assignement" documents or pieces of paper to allegedly prove their title to the so-called debt.

 

Some tricks of the trade include cobbling together documents from a couple of other documents. Watch for dates, misaligment of text, lack of signatures.

 

Example 3- who exactly has issued these documents and do they actually exist? Check very carefully as you may find that the solicitors' office that is issusing court papers and "Statment of Truth" documents may be a covert operation that is not acknowledged anywhere on the Solicitors main website and the person writing these documents may not be listed anywhere on their webiste.

 

Example 4- Mortgages and secured loans.

A customer takes out a secured loan with mortgage company A and signs the mortgage deed with them. The Deed contains all the phrasing about transfer, assign etc (another story in itself).

 

Mortgage completes and customer is advised aferwards that the mortgage was transferred to Mortgage company B on the same day. However Mortgage company B provided the funds in the first place!

 

So Mortgage company A was in fact a broker and never provided any money to customer. Nothing disclosed to customer about this.

 

Whilst 3rd party payments are not illegal and seem to be more common in some industries than others, they are very useful as a tax dodge.

 

Example 5 - Transferred mortgage company seeking possession.

 

Mortgage set up with company C, transferred to company D 2 months later, although source of original funds is questionable.

 

Mortgage company D goes for posssession of property and there are some very interesting points on particulars of claim.

1) Date of start of arrangement between customer and mortgage company D is stated as same date as customer actually took aout mortgage with Mortgage Company C!!!

2) Mortgage company seeks HOUSE and MONEY, which is a way of avoiding a significant tax liability for the mortgage companies.

 

Fraud is all around us in many of these transactions, and it is sanctioned from the highest levels, becuase it is very profitable!

 

I agree with the previous posters in that this needs to be fought as a group action.

 

There are several cases now, where Deutsche Bank have lost in foreclosure/reposssession cases in the USA through not being able to produce an original contract and not being able to prove "who is the holder in due course of the debt instrument", i.e who currenlty owns ther mortgage.

 

Hope this helps.

Happy to discuss.

[landy_alert]

Hi goldy36:)

 

I found your examples regarding mortgage companies very interesting -

 

We had a mortgage with Swift Advances who issued proceedings for possession when we got into arrears. All the court paperwork mentioned Swift's name only as one would expect and at that time (pre CAG) we knew nothing about securitisation etc.

 

With help from family we repaid arrears before it came to court and soon after sold the house, repaying Swift in full.

 

We have recently Subject Access Requested Swift and discovered that a couple of months after taking out the mortgage our account was transferred to Kestrel 1, one of Swift's sister companies.

 

We are in the process of reclaiming the ridiculous charges levied for letters sent/arrears fees etc and need all the ammo we can get for this , so the whole fraud angle is proving a very interesting read, although at present I am not sure if we can use it to our advantage at all.

 

Regards,

 

Landy x

[Smarterchick]

Hi goldy36:)

 

I found your examples regarding mortgage companies very interesting -

 

We had a mortgage with Swift Advances who issued proceedings for possession when we got into arrears. All the court paperwork mentioned Swift's name only as one would expect and at that time (pre CAG) we knew nothing about securitisation etc.

 

With help from family we repaid arrears before it came to court and soon after sold the house, repaying Swift in full.

 

We have recently Subject Access Requested Swift and discovered that a couple of months after taking out the mortgage our account was transferred to Kestrel 1, one of Swift's sister companies.

 

We are in the process of reclaiming the ridiculous charges levied for letters sent/arrears fees etc and need all the ammo we can get for this , so the whole fraud angle is proving a very interesting read, although at present I am not sure if we can use it to our advantage at all.

 

Regards,

 

Landy x

 

The word Fraud in itself has been discussed, as for Swift and Kestrel there are issues which I find interesting because it is stated in Kestrels accounts in the Directors report that they purchased portfolios from their subsidairy companies. Now Ltd companies are stand alone companies for all tense and purposes, although as part of a group they do have a slight difference, but none the less, it is common law that one has to show a loss to bring action to repossess or sue and like it or not, Swift have been 'paid in full' by Kestrel No1 Ltd so suffered no loss. Unless there was some kind of re-sale back to Swift I can't see how they could sue you and with the directors for both companies being exactly the same it does make one question quite what the benefits were in selling the portfolios in the first place. In which case, I do believe you can claim you have been paying Swift 'by mistake' and claim it back....others with better accounting and legal knowledge will advise on the mechanics of this, but Fraud? - not sure if they are trying to defraud you in particular or the Inland revenue, but something appears to be going on which warrants further investigation.

 

SC

[enoughisenough]

but Fraud? - not sure if they are trying to defraud you in particular or the Inland revenue, but something appears to be going on which warrants further investigation.

 

I'm still with Dougal on this. The Act is so widely framed.

 

The securitisation process itself involves misrepresentation and is definitely dodgy in the way it is executed. We know the brokers, lenders and spvs omit key information from the borrower which would certainly have influenced the borrowers decision making if full disclosure had been made as it is mandated to be in plain intelligible terms.

 

Who with full knowledge and in their right mind would have signed up for one of these mortgages?

 

So to put my views on the record. This may prove a bridge too far, in particular because of the far reaching implications a decision on securitisation as fraud would represent. No such precedent could or would ever be set, because the stakes are soooo staggering and mind boggling to contemplate.. Don't think billions or trillions, think hundreds of trillions if not more.

 

However, I do think the conduct of the TPAs would have a far greater chance of success and would achieve the aims of getting these rogues to behave more fairly.

 

One TPA charged with and successfully prosecuted of Fraud would send shockwaves through the whole sub prime market.

Edited August 2, 2009 by enoughisenough
pointless paragraph. Some might say they all are when I post!

[Crapstone]

I still think the only fraud is misrepresentation and mis-selling, that a consumer could prove in their favour. Preferably as the claimant because any defence seems to get the sh**** end of the stick. The judges won't listen, read or take any notice of what is staring them in the face when it comes to debts or repo.

[enoughisenough]

Preferably as the claimant because any defence seems to get the sh**** end of the stick. The judges won't listen, read or take any notice of what is staring them in the face when it comes to debts or repo.

 

That is certainly my experience in the courts, at least some of the time. However fraud is a criminal investigation brought by the CPS so that particular problem wouldn't apply in a Fraud case. Other problems arise thereafter though such as whether the CPS would prosecute and proving the dishonesty of the conduct.

[Dougal16T]

I still think the only fraud is misrepresentation and mis-selling, that a consumer could prove in their favour. Preferably as the claimant because any defence seems to get the sh**** end of the stick. The judges won't listen, read or take any notice of what is staring them in the face when it comes to debts or repo.

 

Well now,

 

'Representation is not a term' (from Wikipedia - with acknowledgements)

 

 

As enacted by the Misrepresentations Act,[3] the statement in question may constitute a representation even if later incorporated into the contract as a term (i.e. a warranty, condition or innominate term).

 

An alternative approach, applied in parallel but in exclusivity to, is to find a collateral contract by interpreting the representation as a promise accompanied by some sort of consideration (see Heilbut, Symons & Co. v Buckleton [1913] A.C. 30 (H.L.)). The collateral contract will have the effect of adding the representation as a term to the contract.

If the representation is found to be a term then the normal remedies for breach of contract apply.

 

Criteria for Misrepresentation

 

Misrepresentation is one of several vitiating factors which can affect the validity of a contract. A misrepresentation occurs when one party makes a false statement with the intention of inducing another party to contract. For an action to be successful, some criteria must be met in order to prove a misrepresentation. These include:

A false statement of fact has been made,

The statement was directed at the suing party and

The statement had acted to induce the suing party to contract.

 

Distortion of Fact

 

A representor may make a statement which prima facie is technically true; however this may tell only half the story. If a statement of fact is made but the representor fails to include information which would significantly alter the interpretation of this fact, then a misrepresentation may have occurred. In Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563, Krakowski agreed to enter into a contract to buy a shop premises from Eurolynx as long as a 'strong tenant' had been organised. The contract proceeded on the grounds that such a tenant had been arranged. Unbeknown to Krakowski, Eurolynx had entered into an additional agreement with the tenant to provide funds for the first three months rent to ensure the contract went ahead. When the tenant defaulted on the rent and subsequently vacated the premises, Krakowski found out about the additional agreement and rescinded the contract with Eurolynx. It was held that Eurolynx’s failure to disclose all material facts about the 'strong tenant' was enough to constitute a misrepresentation and the contract could be rescinded on these grounds.

 

Learned Falsity

 

The negotiating stage of a contract can sometimes be a time consuming process. Because of this, new information may arise and circumstances may change. This can result in two particular situations which can result in a misrepresentation if silence is kept. The first is if the representor subsequently discovers that the statement was false, the second being if the statement becomes false at a later time. If a statement is made and it is subsequently made known to the representor that it is in fact false, it would obviously be inequitable to allow the representor to remain silent with the new information. In Lockhart v. Osman [1981] VR 57, an agent had advertised some cattle as being “well suited for breeding purposes”. Later on it was discovered that the stock had been exposed to a contagious disease which affected the reproductive system. It was held that the agent had a duty to take remedial action and correct the representation. The failure by the agent to take such measures resulted in the contract being set aside. Should a statement be made which is true at the time, but subsequently becomes untrue due to a change in circumstances, the representor is obligated to amend the original statement. In With v O’Flanagan [1936] Ch. 575, the plaintiff entered into a contract to purchase O’Flanagan’s medical practice. During negotiations it was said that the practice produced an income of £2000 per year. Before the contract was signed, the practice took a downward turn and lost a significant amount of value. After the contract had been entered into the true nature of the practice was discovered and the plaintiff took action in misrepresentation. In his decision, Lord Wright said "...a representation made as a matter of inducement to enter into a contract is to be treated as a continuing representation."[4]. This means that the representation must be true till the contract is made; creating the obligation mentioned above and accordingly the plaintiff’s petition was successful.

 

Special Relationships

 

Some relationships also provide that silence can form the basis of an actionable misrepresentation.

 

Fiduciary Relationships (POSSIBLY - SWIFT ADVANCES PLC)

 

A fiduciary relationship is one of trust and confidence; it involves one party acting for the benefit of another. For this reason, when entering into a contract, it is important for a fiduciary to disclose all facts which could be considered material even if not expressly asked about[5]. In ''Lowther v Lord Lowther (1806) 13 Ves Jr 95, the plaintiff handed over a picture to an agent for sale. The agent knew of the pictures true worth yet bought it for a considerably lower price. The plaintiff subsequently discovered the pictures true worth and sued to rescind the contract. It was held that the defendant was in a fiduciary relationship with the plaintiff and accordingly assumed an obligation to disclose all material facts. Accordingly the contract could be rescinded.

 

Contracts ‘Uberrimae Fidei’

 

A contract uberrimae fidei is a contract of ‘utmost good faith’. Similarly to fiduciary relationships, the parties are required to make known all material facts influencing the contract. Contracts uberrimae fidei usually arise when one party has knowledge which the other does not have access to. Contracts which are commonly considered to be of such a nature include contracts of insurance and family agreements. When applying for insurance, the person or entity must disclose all material facts so that the insurer can properly asses the risk involved with the offering of insurance. Since the insurer cannot have access to all information relating to the insured and their situation which could affect the risk involved, it is necessary for this disclosure so that both parties are entering into the contract on equal grounds. Lord Blackburn addressed the issue in Brownlie v Campbell (1880) 5 App Cas 925 when he noted "...the concealment of a material circumstance known to you...avoids the policy."[6]. Another contract considered uberrimae fidei is that of family agreements. In Gordon v Gordon (1821) 3 Swan 400, two brothers had reached an agreement regarding the family estate. The elder brother was under the impression that he was born out of wedlock and thus not their fathers true heir. The agreement was reached on this basis. The elder brother subsequently discovered that this was not the case and that the younger brother had knowledge of this during the negotiation of the settlement. The elder brother sued to set aside the agreement and was successful on the grounds that such a contract was one of uberrimae fidei and the required disclosure had not been executed.

 

Statement of Fact

 

It is a general requirement that for an action in misrepresentation to proceed, that the statement in question be one of present or past fact. This has its grounding in that only facts can be distinguished as being true or untrue at the time they are made.

 

Opinion

 

Statements of opinion are not often seen as sufficient to produce a misrepresentation. Obviously it would be unreasonable to treat opinions in the same manner as truths as opinions can be based purely on personal beliefs with no additional foundation. There are however some exceptions where opinions can give rise to an action in misrepresentation:

where an opinion is expressed yet this opinion is not actually held by the representor,

where it is implied that the representor has facts on which to base the opinion,

or where one party should have known facts on which such an opinion would be based.

 

Intention and the Future

 

Statements which are made in relation to the intention of a party or the occurrence of some event in the future do not constitute misrepresentations should they fail to eventuate. This is because at the time the statements were made they can not be categorised as either true or false. However, similarly to the first point above, an action can be brought if the intention never actually existed. This can be illustrated by the decision in Edgington v Fitzmaurice (1885) 29 Ch. D. 459, which deals with a statement of intention by the directors of a company to use loaned money to alter company buildings and make purchases to expand the company’s operating options. It was found that the directors actually intended to repay current debts and according it was held by the judges that the contract was voidable.

 

Law

 

Statements of law were, in the past, considered to be free from claims of misrepresentation because it is equally accessible by both parties and is "...as much the business of the plaintiff as of [the defendants] to know what the law [is].". This has since changed and it is now more recognised that statements of law should be treated as akin to statements of fact rather than occupy a special isolation. As stated by Lord Denning "...the distinction between law and fact is very illusory."

 

Statement to the Misled

 

An action in misrepresentation can only be brought by a representee. This means that only those who were an intended party to the representation can sue. This principle can be seen in Peek v Gurney (1873) LR 6 HL 377, where the plaintiff sued the directors of a company for indemnity. The action failed because it was found that the plaintiff was not a representee (an intended party to the representation) and accordingly misrepresentation could not be a protection. It is not required that in order to be a representee, the representation must be received directly. It is sufficient that the representation was made to another party with the intention that it would be made known to a subsequent party and ultimately acted upon by them as a representee.

 

Types of misrepresentation

 

Four types of misrepresentations are identified with different remedies available:

 

Fraudulent misrepresentation (Derry v. Peek) occurs when one makes representation with intent to deceive and with the knowledge that it is false. An action for fraudulent misrepresentation allows for a remedy of damages and rescission. One can also sue for fraudulent misrepresentation in a tort action. Fraudulent misrepresentation is capable of being made recklessly.

 

Negligent misrepresentation at common law occurs when the defendant carelessly makes a representation while having no reasonable basis to believe it to be true. This type of misrepresentation is relatively new and was introduced to allow damages in situations where neither a collateral contract nor fraud is found. It was first seen in the case of Hedley Byrne v Heller [1964] A.C. 465 where the court found that a statement made negligently that was relied upon can be actionable in tort. Lord Denning in Esso Petroleum Co. Ltd. v Mardon [1976] Q.B. 108 however, transported the tort into contract law, stating the rule as:

if a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another…with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable.

 

Negligent misrepresentation under Statute, enacted by the Misrepresentation Act 1967. When dealing with a negligent misrepresentation it is most lucrative[16] (joint with fraudulent misrepresentation, Contributory Negligence notwithstanding[17]) for an action to be brought under statute law as the burden of proof that is required passes to the person who made the statement. So it is for the person who made the negligent statement to prove that the statement was either not one of fact but opinion and that "had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true"[18] - the so-called innocent defence.

This creates an inconsistency of law due to the low burden and damages being calculated as extensive as those under fraudulent misrepresentation whereby a "wicked mind" is the basis of action. It is, to use the words of Rix J, "a mighty weapon". Due to academic and judicial criticism in this area, the law is ripe for reform - probably adjusting the measure of damages to that of negligent misrepresentation at common law.

 

Innocent misrepresentation occurs when the representor had reasonable grounds for believing that his or her false statement was true. Prior to Hedley Byrne, all misrepresentations that were not fraudulent were considered to be innocent. This type of representation primarily allows for a remedy of rescission, the purpose of which is put the parties back into a position as if the contract had never taken place. Section 2(2) Misrepresentation Act 1967, however, allows for damages to be awarded in lieu of rescission if the court deems it equitable to do so. This is judged on both the nature of the innocent misrepresentation and the losses suffered by the claimant from it.

 

Sorry this long, but it (in my opinion) adds 'fuel to the fire', regarding the Fraud Act 2006 and the various DCA'a and sub-prime lenders, who are not acting in accordance with the principle 'would a reasonable person consider their actions honest?'.

 

 

Best wishes

 

 

Dougal

[Suetonius]

That is certainly my experience in the courts, at least some of the time. However fraud is a criminal investigation brought by the CPS so that particular problem wouldn't apply in a Fraud case. Other problems arise thereafter though such as whether the CPS would prosecute and proving the dishonesty of the conduct.

 

Here is what the CPS has to say about the Fraud Act 2006

 

Fraud Act: Legal Guidance: The Crown Prosecution Service

[Suetonius]

Does the act have any retrospective effect whatsover? i.e. An act committed in 2005 which became an offence in 2006/7. the act continues to the extent that the gain and loss are still in evidence. Or is this just impossible?

 

Turning to the question of Fraud, a Criminal act committed in, say 2004, which has just come to light and is a case of fraud, and as such would now be prosecuted under the Fraud Act 2006.

 

 

If an act occured before 15 January 2007, the old thefts act would apply.

[enoughisenough]

I thought that this was rather interesting.

 

I did read the full article in the Wall Street Journal but by way of coincidence only a snippet is available on line. What price the freedom of the press?

 

Here it is...(In less than all its glory...)

 

U.K. Probes Structured-Finance Products - WSJ.com

 

Wonder why I'm being being repoed on next to nothing in genuine arrears!

[Suetonius]

I thought that this was rather interesting.

 

I did read the full article in the Wall Street Journal but by way of coincidence only a snippet is available on line. What price the freedom of the press?

 

Here it is...(In less than all its glory...)

 

U.K. Probes Structured-Finance Products - WSJ.com

 

Wonder why I'm being being repoed on next to nothing in genuine arrears!

 

For those that did not have the opportunity to read the full article, here is the same story from a different source:

 

U.K. Fraud Authority Probes Structured Finance, Swaps (Update1) - Bloomberg.com

 

"“We’re looking generically at what might give us a cause for concern or a possible lead for finding out more,” Jaffa said in an e-mail today. “There’s no suggesting that across- the-board valuations were flawed. However, how valuations are arrived at, what is bundled into the funds and how they were sold are areas of interest.” "

[Crapstone]

You must have have fun with that one Dougal! It boils down to asking yourself questions on how you were influenced. Would you have still taken out the mortgage/loan..if you had been aware of all the facts and, were you lied to at the point of sale? How was the sale made? Pushy broker that doesn't leave till the wee hours and takes advantage of your desperate situation?

 

I know mine said that if he was crossed he'd take out a CCJ against (their) previous address as revenge. And what a nice chap he is!

[goldy36]

I wonder whether the whole issue of Fraud lies in how money is "created" in the first place and whether the banks "lent" us any of their money and have therefore "sustained a loss"?

 

This is a very interesting site which explains this.

 

Debt Free Sovereign Trust -- "Owe no one anything"

 

(I have no personal interest in the company or theri services)

 

I had a mortgage company tell me that they "create and trade mortgage assets" - interesting choice of words!

[Dougal16T]

Good morning ( and yes, I'm still on my soapbox....!)

 

This is from the CPS website, and is their guidance:

 

[NOTE ; TEXT IN ITALICS IS MINE!]

 

Fraud Act 2006

The offences

Fraud contrary to Section 1 of the Fraud Act 2006

Section 1 creates a new general offence of fraud and introduces the three possible ways of committing it. The three ways, set out in Sections 2, 3 and 4 are by:

 

false representation (Section 2);

 

failure to disclose information when there is a legal duty to do so (Section 3); and

 

abuse of position (Section 4).

 

In each case, the Defendant's conduct must be dishonest (see R-V-Ghosh) and his intention ( see intention defined in R. v Mohan as "the decision to bring about a prohibited consequence". ), must be to make a gain, or cause a loss or the risk of a loss to another. That is the sum total of the evidential requirements. Crucially, no gain or loss needs actually to have been made.

 

 

Fraud by false representation (Section 2)

The elements of the offence

 

The elements of the offence are that the Defendant:

 

made

a false representation

dishonestly

knowing that the representation was or might be untrue or misleading

with intent to make a gain for himself or another, to cause loss to another or to expose another to risk of loss.

The offence is entirely offender focused. It is complete as soon as the Defendant makes a false representation, provided that it is made with the necessary dishonest intent. It differs from the deception offences in that it is immaterial whether or not any one is cognisant of the representation, deceived or any property actually gained or lost.

 

a) Made (a false representation)

 

A representation may be express or implied (Section 2 (4)). It can be stated in words or communicated by conduct. There is no limitation on the way in which the representation must be expressed. It could be written, spoken, posted on a phishing website, spoken into a dictaphone or sent by email. A representation is implied by conduct when a person uses a credit card dishonestly. By tendering the card, he is falsely representing that he has the authority to use it for that transaction. A representation can be made through body language - a nod of the head, presence in a restricted area implying the right to be there (including presence within a secure computer system) or being dressed or wearing identification that implies a certain status or right to be present. A representation can be about identity - using a false identity to open a bank account.

 

A representation can be by omission - for example, a Defendant who omits to mention previous convictions or County Court Judgements on an application form. That Defendant would be representing himself as being of good character or financial probity when the opposite was the case. There is a potential for the offence to be complete when the defendant fails to correct a false impression after a change in circumstances from the original representation, if the representation may be regarded as a continuing series of representations.

 

A representation can be made to a machine (Section 2 (5)), for example, where a person enters a number into a CHIP and PIN machine or a bank ATM. Providing false credit card details to the voice activated software on the cinema telephone line is the same as providing false credit card details to the man who works in the ticket office. Similarly, providing false credit card details to a supermarket website to obtain groceries is the same as giving false details to the assistant at the till.

 

It may become an issue when, under Section 2 (5), a false representation is submitted to a machine - is it, for example, when the card is pushed into the card reader, when the PIN number is typed or when "enter" is pressed. In practice, prosecutors are unlikely to receive a file unless the last stage was reached. If faced with a file where the final stage was earlier in the process prosecutors may wish to consider charging an attempt

 

It is of no relevance at all whether the false representation is believed or has any affect whatsoever on any recipient. However, evidence will be necessary to prove that the defendant communicated the false representation to a person or submitted it to a machine. Conduct short of that will be an attempt. In most cases the fact that the false representation was communicated will be demonstrated by its appearance on a computer screen, its effect on the recipient or the system to which it was submitted. In some cases it will not be necessary to call evidence from a victim. However, prosecutors should bear in mind that a victim who is not named on an indictment or in a TIC cannot be compensated.

 

b) A false representation, knowing that was, or might be untrue or misleading

 

Section 2 (2) defines the meaning of "false" and Section 2 (3) defines the meaning of "representation".

 

A representation is defined as "false" if it is untrue or misleading and the person making it knows that it is, or might be, untrue or misleading. The words "might be" do not import recklessness. Actual knowledge that the representation might be untrue is required - not awareness of a risk that it might be untrue.

 

Knowledge is a strict mens rea requirement. The House of Lords in Montila (Note: [2004] UKHL 50) said

 

"A person may have reasonable grounds to suspect that property is one thing (A) when in fact it is something different (B). But that is not so when the question is what a person knows. A person cannot know that something is A when in fact it is B. The proposition that a person knows that something is A is based on the premise that it is true that it is A. The fact that the property is A provides the starting point. Then there is the question whether the person knows that the property is A."

 

In practice this will not be such a heavy burden on prosecutors as might first appear. The same type of evidence as was used to prove the nature of the deception in cases of obtaining by deception will suffice here. For example, where a debit or credit card has been used fraudulently, evidence of the rightful owner and that he or she did not carry out the transaction in question.

 

A "representation" means any representation as to fact or law, including a representation as to the state of mind of the person making the representation or any other person (Section 2 (3)). An example of the latter might be where a defendant claims that a third party intends to carry out a certain course of action - perhaps to make a will in someone's favour. It may be difficult to prove to the necessary standard that the Defendant knew the state of mind of a third party, but easier to prove that he knew what it might be.

 

A couple of interesting issues that may arise and should be considered with care prior to charging:

 

Where the representation is potentially 'trade puff' misleading. Does this act potentially criminalise the street trader's banter or is there no real dishonesty involved?

Where the representation is at to the mileage of the car or the previous owner. Does it matter whether the representation is 'material' or minor?

c) Dishonestly

 

The Ghosh (Note: [1982] 1QB 1053) definition applies:

 

Was what was done dishonest by the ordinary standards of reasonable and honest people?

Must the Defendant have realised that what he was doing was, by those standards, dishonest?

It should be remembered that the question of 'dishonesty' is one for the jury and submissions of no case to answer should not be acceded based on the issue of dishonesty.

 

d) With intent to make a gain for himself or another, to cause loss to another or to expose another to risk of loss

 

"Gain" and "loss" are defined in Section 5 of the Act. The definition is essentially the same as in Section 34 of the Theft Act.

 

Gain and loss extends only to gain and loss in money or other property (Section 5 (2) (a)), whether temporary or permanent (Section 5 (2) (b)) and means any property whether real or personal including things in action and other intangible property (Section 5 (2) (b)).

 

"Gain" includes a gain by keeping what one has, as well as a gain by getting what one does not have (Section 5 (3)).

 

"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)).

 

The Defendant must intend to make the gain or cause the loss by means of the false representation.

 

The breadth of conduct to which Section 2 applies is much wider than the old Theft Act deception offences because no gain or loss need actually be made. It is the Defendant's ultimate intention that matters. If the Defendant gets information by making a false representation, intending ultimately to make a gain or cause a loss within the meaning of Section 5 by doing so, he will have committed a Section 2 offence.

 

Can anyone, put their hand on their heart and really say that the actions of some DCA's, and some sub-prime lenders (Swift Advances plc are an example) do not fall within the Fraud Act 2006 - if so I would welcome your reasons (unless you work for one of them of course.....!)

 

Kind regards

 

 

Dougal

[Dougal16T]

I wonder whether the whole issue of Fraud lies in how money is "created" in the first place and whether the banks "lent" us any of their money and have therefore "sustained a loss"?

 

This is a very interesting site which explains this.

 

Debt Free Sovereign Trust -- "Owe no one anything"

 

(I have no personal interest in the company or theri services)

 

I had a mortgage company tell me that they "create and trade mortgage assets" - interesting choice of words!

 

Good morning

It is an interesting point - BUT this is American and not UK law, although there are striking similarities. I have read the site you mentioned and found the information interesting.

 

Best wishes

 

Dougal

 

Best wishes

[enoughisenough]

Way to go Dougal! That's some soapbox!

 

Looking at the myriad misconduct of the brokers, the originators, the SPVs and the TPAs that has been posted on the various other threads there is a strong prima facia case. Assuming the will was there to actually mount a case and the justice system is fair I can see a reasonable prospect of success. I already accept that these are massive assumptions. Have to say it's very good for scaring away appalling DCAs though!

[Crapstone]

Hi Dougal,

 

The facts to us are clear but how do you propose bringing a case and getting past the CPS? Even a civil case will have to pass under their noses.

 

Ever thought that you could also say that the generous 3rd party has paid off the mortgage and unless shown otherwise it could be considered as settled in full? It's food for thought but not in that exact form, if you get my meaning.

[Suetonius]

On the side of caution, I would urge everyone to bear in mind:

 

Fraud Act: Legal Guidance: The Crown Prosecution Service

 

"Under Section 3 (1) of Schedule 2 the old Theft Acts offences will continue to apply for any offences partly committed before 15 January 2007."

 

Therefore, if your mortgage commenced before 15 January 2007, then in my own personal view the Fraud Act 2006 would not be applicable. As (if any) offences were to have occurred, they would have occurred at the point of sale or be evidenced in any subsequent mortgage offers / agreements.

Edited August 5, 2009 by Suetonius
typo's (it is 3 in the morning, what do you expect)

[Rhia]

Sory this is a bit lacking in a reference case but a couple of days ago I came across "constructive fraud" but damned if I can recall where.

 

It is to do with banking/financial etc and means you don't have to prove intent merely that a course of action can be construed as fraud.

 

Taking Suetonius' point above I now wonder if there is a "constructive theft" for cases dating before 15th Jan 07.

 

Perhaps worth a search?

[Dougal16T]

On the side of caution, I would urge everyone to bear in mind:

 

Fraud Act: Legal Guidance: The Crown Prosecution Service

 

"Under Section 3 (1) of Schedule 2 the old Theft Acts offences will continue to apply for any offences partly committed before 15 January 2007."

 

Therefore, if your mortgage commenced before 15 January 2007, then in my own personal view the Fraud Act 2006 would not be applicable. As (if any) offences were to have occurred, they would have occurred at the point of sale or be evidenced in any subsequent mortgage offers / agreements.

 

Good morning,

 

As always an excellent point from Suetonius and well made. However if you read on (I am sure you have), it does say the following:

 

'Section 3 (3) of Schedule 2 defines a relevant event for the purposes of the Fraud Act as

 

"... any act, omission or other event (including any result of one or more acts or omissions) proof of which is required for conviction of the offence."

 

When reviewing cases in which it is uncertain when a relevant event occurred and it may have happened before, on or after 15 January 2007 prosecutors should request that police obtain as much information as possible to assist in identifying the date on which any relevant events occurred. This should be possible in the vast majority of fraud cases.

 

In rare cases when the uncertainty as to the date cannot be rectified it is proper practice to put alternative counts on the indictment under the 2006 Act and the previous legislation. In R v Bellman [1989] A.C. 836 the House of Lords considered whether mutually inconsistent and destructive counts can appear on an indictment. Their Lordships held that where there is prima facie evidence that a defendant has committed either crime A or crime B then both crimes may be charged and left to the jury, even though proof of crime A will establish that D cannot have committed crime B and vice versa.

 

Where it is clear that D has committed crime A or crime B but there is no evidence to say when the crime has been committed then neither crime can be left to the jury.

 

In cases where alternative counts have been placed on the indictment, prosecuting advocates should be reminded of R v Bellman.

 

So, I still think that it is right to consider that the Fraud Act applies and to proceed along those lines, I am sure the CPS will act accordingly in any charging......

 

Kind regards to all

 

 

Dougal

[goldy36]

Dougal, I am curious...

 

If mortgages are not "created" by the banks using our signatures, then how are mortgages "funded" in the UK?

 

Where do the funds come from and what would be a typical flow of money in a mortgage?

 

I am thinking sub-prime companies here rather than high street banks.

 

This is a serious question, and potentially relevant to this thread because if mortgages are "created out of thin air" (as I rather suspect they are)

and banks have not actually "lent" any of their money or their customers' money, then the whole concept of a mortgage is fraudulent from its inception.

 

Any thoughts, anyone...

 

Thanks.

Goldy36

[Rhia]

h Goldy this is something I have been wondering too! It is a now well known fact that money has and is created out of thin air. I applied this thought to when banks said how much they would lose over credit card write offs?

 

My thought then was but do they actually lose anything? Assuming someone has had a card for reasonable period of time they will have paid off the principal. The rest is just sheer profit created "out of thin air". They haven't lost anything in reality have they?They just wont make as much profit.

[Dougal16T]

Good evening all,

 

I think we may be getting sidetracked...let's stay on the path of offences we know have been committed and other offences will be 'disclosed' during any investigation of those we know about.

 

Note the SFO are looking into the Icelandic bank......well perhaps they need a 'swift' nudge in the right direction......!!

 

Any thoughts.....

 

 

As always

 

Dougal

[Crapstone]

h Goldy this is something I have been wondering too! It is a now well known fact that money has and is created out of thin air. I applied this thought to when banks said how much they would lose over credit card write offs?

 

My thought then was but do they actually lose anything? Assuming someone has had a card for reasonable period of time they will have paid off the principal. The rest is just sheer profit created "out of thin air". They haven't lost anything in reality have they?They just wont make as much profit.

 

If it only it were that simple. Banks also borrow, invest and speculate to create flow and profits. They don't just hold the money, lend it and then reap any profits. They have to pay the shareholders too and make it worth being an investor through interest otherwise the flow collapses.

 

Years ago my parents lent money to a neighbour for a new roof and it was around 2K. The neighbours payed back the amount 5 years later without interest, it wasn't asked for or expected, but what do you suppose the loss would have been? The principle amount was paid but what could have been achieved with the money in that duration?