Fraud by Abuse of Position

Section 4 of the Fraud Act 2006 provides that a person is in breach of the section if they occupy 'a position in which he is expected to safeguard, or not to act against, the financial interests of another person', dishonestly abuse that position, and intend, by means of the abuse, either to make a gain for themselves or another or to cause loss to another or expose another to a risk of loss. The offence is deliberately broad in the relationships it can catch — it is not limited to fiduciaries in the strict trust-law sense, but extends to any position of trust in which one party is expected to look after the financial interests of another, such as an employee, agent, trustee, or company director.

A distinctive feature of section 4 is that abuse of position need not involve any positive act: subsection (2) provides that 'a person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act', so a deliberate failure to act — for example failing to prevent a wrongful payment when in a position to do so — can found the offence if done dishonestly and with the necessary intent to gain or cause loss.