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Fraud by abuse of position



Sat 30 December 2023 Fraud by abuse of position

Under English law, fraud by abuse of position is a criminal offence defined in Section 4 of the Fraud Act 2006.

The offender must be in a position where they are expected to safeguard or not act against the financial interests of another person. This could include roles like company director, employee, trustee or attorney under a power of attorney.

The criminal offence does not require proof of actual loss but does require intent. The accused must have abused their position for personal gain or to cause loss to another person. This could involve misusing company funds, diverting resources, or engaging in deceptive accounting practices.

The defendant must have intended to make a financial gain for themselves or someone else, or to cause a financial loss to another person.

Examples of fraud by abuse of position

Examples in practice we have advised on include where a company director siphoned off funds from for their own personal use, a care worker stealing money from an elderly client and where a financial gave misleading investment advice to a client for personal gain.

Sentences for fraud by abusing position

The range of potential penalties for fraud by abuse of position spans from fines and community orders to imprisonment, depending on the severity of the offense.

For cases heard in the Magistrates' Court, typically involving less substantial sums or isolated incidents, the maximum custodial sentence is 12 months. However, the most serious cases, often characterised by multiple offenses, large amounts of money, and protracted periods of abuse are tried by jury at the Crown Court. In these instances, prison sentences can extend up to 10 years.

It's essential to bear in mind that the specific sentence will hinge on the precise facts of each case and the current sentencing guidelines in place.

Potential defences 

Common defences and tactics where we advise defendant clients include :-

Preventing abuse of position

There are several steps that can be taken to prevent and detect fraud by abuse of position:


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