22.Lord Vaux of Harrowden and Lord Stevenson of Balmacara proposed a special inquiry select committee to consider fraud and Lord Young of Cookham proposed a special inquiry select committee to consider online fraud. We considered combining these two proposals with post-legislative scrutiny of the Fraud Act 2006.
23.Under UK law, Fraud is defined as “making a dishonest representation for your own advantage or to cause another a loss.” This can include: fraud by false representation, fraud by failure to disclose information and fraud by abuse of position. Fraud is increasingly being carried out online, over the phone and by text. The Government’s ‘Beating Crime Plan’ published in 2021 states that fraud now accounts for “approximately 42% of all crime against individuals and costs society at least £4.7 billion a year.”
24.The financial impact of fraud on the economy is significant. Although banks are often able to prevent fraud and reimburse victims, UK Finance estimate that £3.27 in every £10 of attempted fraud is lost. According to the Office for National Statistics (ONS), in 76% of fraud incidents that occurred in 2019, the victim incurred a financial loss. Action Fraud figures show that, more than £78 million was lost to clone scams in 2020. Research by Citizens Advice has found that 36 million adults were targeted between January and June of 2021.
25.It has been reported by the Victims’ Commissioner that victims of fraud often experience emotional distress after the crime, even if their money is returned. This can include feelings of shame, guilt and fear that they will be defrauded again. Victims whose personal information such as their date of birth and home address has been stolen might have concerns over their own physical safety.
26.The Financial Conduct Authority (FCA) has a statutory strategic objective of “securing an appropriate degree of protection for consumers”. Banks have also played a key role in identifying and preventing fraud, stepping in at the point where an attempt is made to transfer money. In 2020, banks and card companies prevented £1.6 billion from being lost to fraud. However, perpetrators of these crimes are rarely prosecuted. An investigation by Which? has shown that since 2018, more than 96% of cases reported to the UK’s national fraud reporting centre went unsolved. Online platforms currently have no legal obligation to protect users against fake or fraudulent content, although some platforms have pursued initiatives of their own.
27.The Fraud Act 2006 provided for the first time a general offence of fraud, which had previously been covered by a range of deception offences. The Act specifies three ways in which fraud can be committed, namely by false representation, by failing to disclose information and by abuse of position. It also creates new offences of obtaining services dishonestly and of possessing, making and supplying articles for use in frauds, as well as a new offence of fraudulent trading applicable to non-corporate traders.
28.The Ministry of Justice published a post-legislative assessment of the Fraud Act 2006 in a memorandum to the Justice Select Committee in June 2012. The memorandum reported that the CPS advised that the Act had simplified fraud law, and that “the offences are now easily understood by those involved in, and responsible for, the investigation of fraud”. City of London Police concurred, stating that it had “been impressed with the simplicity and clarity of the reformed law on fraud” and advised that “the Act allows investigators to take prompt action to avoid further criminality”. It was also reported that guilt is more readily admitted than for the former deception offences, and that the broad span of offending covered by the Act had helped prosecutions.
29.The memorandum also noted that the Law Commission’s report, on which the Act is based, recommended that the common law offence of conspiracy to defraud should be abolished. This was not included in the original Act, but was considered as part of the post-legislative memorandum. A consultation revealed a firm consensus that the offence should be retained. The memorandum concluded by stating that “our overall assessment of the Act is that it has been successful in achieving its initial objectives of modernising the former array of deception offences”.
30.The Chartered Institute of Public Finance and Accountancy (CIPFA) published a short assessment of the Fraud Act in March 2017, 10 years after its commencement. It stated that the Act’s impact on fraud “is not what anyone had in mind in 2007: billions of pounds continue to be lost each year in the public sector alone and according to the Crime Survey for England and Wales (year ending September 2016), fraud and cybercrime is now the most commonly experienced offence with almost one in ten people falling victim”. The CIPFA assessment added that “legislation alone was never going to fix the problem” and that “although the Fraud Act provided the legal system with the tools to tackle fraudulent behaviour in the UK, it could only ever be as good as the resources available to support it”.
31.A post-legislative review of the Fraud Act might consider how its provisions are used in practice by prosecutors and more widely for the prevention and detection of fraud. In particular, it might consider whether the increase in reports of fraud since the passage of the Act has any legislative remedy or whether it needs to be addressed primarily through implementation of existing provisions or other mechanisms such as increasing the scope and powers of regulators. This approach could be applied to newer types of fraud such as digital scams. An inquiry could be well timed to build on recommendations made by the Joint Committee on the draft online safety bill and the Treasury Committee’s consumer fraud inquiry.
32.A committee on this topic might consider the following:
21 Thompson Reuters, Practical Law, Financial crime in the UK (England and Wales): overview: (1 March 2020): [accessed 5 November 2021]. See also Fraud Act 2006, .
22 UK Government, Beating Crime Plan (July 2021), p 42: [accessed 5 November 2021]
23 UK Finance (2021), Fraud – The Facts 2021 (2021), p 11: [accessed 5 November 2021]
24 Office for National Statistics, Nature of fraud and computer misuse in England and Wales: year ending March 2019, para 1: [accessed 17 November 2021]
25 Action Fraud, ‘Attack of the clone firms: over £78 million stolen in ‘clone’ firm investment scams’ (27 January 2021): [accessed 5 November 2021]
26 Citizens Advice, ‘36 million Brits targeted by a scammer so far this year’ (14 June 2021): [accessed 5 November 2021]
27 Victims Commissioner, Who suffers fraud? Understanding the fraud victim landscape (October 2021): [accessed 5 November 2021]
28 Anna Tims, ‘Haunted by shame: victims of bank transfer scams tell of lasting trauma’, The Guardian (17 April 2021): [accessed 5 November 2021]
29 Financial Services Act 2012, . See also Financial Conduct Authority, ‘About the FCA’ (15 July 2021): [accessed 5 November 2021]
30 UK Finance (2021), Fraud – The Facts 2021 (2021) p 11: [accessed 5 November 2021]
31 Which?, ‘Exclusive: more than 96% of fraud cases go unsolved’ (24 September 2018): [accessed 5 November 2021]
32 Fraud Act 2006,
33 Ministry of Justice, Post-legislative assessment of the Fraud Act 2006 Memorandum to the Justice Select Committee (June 2012):
34 Ibid., para 14
35 Ibid., para 15
36 Ibid., para 41
37 The Chartered Institute of Public Finance and Accountancy (CIPFA), ‘The Fraud Act: ten years on’ (20 March 2017): [accessed 5 November 2021]