Fraud by Abuse of Position

This offence is particularly relevant to individuals who occupy roles of trust or authority, where they are expected to act in the interests of others — whether that be an employer, client, dependent, or organisation. When that trust is abused dishonestly and intentionally for personal gain or to cause loss to another, it constitutes a criminal offence.

You might also be interested in reading about:

• fraud by false representation
• fraud by omission

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Legal Definition – Section 4, Fraud Act 2006

According to the Act:

“A person is in breach of this section if he— (a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person, (b) dishonestly abuses that position, and (c) intends, by means of the abuse of that position— (i) to make a gain for himself or another, or (ii) to cause loss to another or to expose another to a risk of loss.”

Key Components of the Offence

1. Position of Trust or Responsibility The accused must hold a role in which they are expected to act in another’s financial interest. This could arise from:

   • Employment (e.g., a finance manager handling company funds)

   • Family relationships (e.g., someone with power of attorney)

   • Professional roles (e.g., carers, trustees, financial advisors)

2. Abuse of That Position The abuse does not need to be active deception. It can include:

   • Passive conduct (failing to act when obligated to do so)

   • Exceeding authority

   • Misuse of privileged access or insider knowledge

3. Dishonesty The act must be dishonest, judged against the objective test set out in Ivey v Genting Casinos (UK) Ltd [2017], which asks whether ordinary, decent people would view the behaviour as dishonest.

4. Intention to Gain or Cause Loss The accused must intend to:

   • Gain for themselves or others, or

   • Cause loss or risk of loss to another

   The gain/loss can be actual or intended; it need not be successful for the offence to be complete.

Examples of Fraud by Abuse of Position

• A care home worker who uses a vulnerable resident’s bank card to withdraw cash for personal use.

• An accounts clerk who transfers funds from their employer’s account to their own, exploiting their access to financial systems.

• A trustee who diverts charity funds for private investments, breaching fiduciary duties.

• A power of attorney holder who sells an elderly relative’s property and keeps the proceeds.

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Penalties

Fraud by abuse of position is an indictable offence and carries severe penalties:

• Up to 10 years’ imprisonment

• An unlimited fine

• Or both

The sentencing will reflect the extent of abuse, level of trust breached, and the financial impact on the victim.

Why This Offence Matters

Fraud by abuse of position targets insidious forms of dishonesty that can often go undetected for long periods. It recognises that those in positions of power have the capacity to inflict considerable harm — not just financially, but also emotionally and reputationally.

The law sends a clear message: with trust comes responsibility. The abuse of such trust will not only erode confidence in institutions and individuals, but it will also attract the full force of the criminal justice system.