Finance

What classifies as financial fraud?

Alex Walia

June 12, 2026

2 Min Read

In the UK, financial fraud generally means using deception, dishonesty, or abuse of position to gain money, property, services, or another financial advantage, or to cause someone else a financial loss.

The main law is the Fraud Act 2006, which defines several types of fraud, including:

1. Fraud by False Representation

Making a dishonest false statement or representation to gain money or cause loss.

Examples:

• Using a fake identity to obtain a loan.
• Lying about income on a mortgage application.
• Selling goods online that do not exist.

2. Fraud by Failing to Disclose Information

Dishonestly withholding information when there is a legal duty to disclose it.

Examples:

• Concealing debts when required to declare them.
• Failing to disclose information to obtain benefits or insurance payouts.

3. Fraud by Abuse of Position

Using a position of trust dishonestly for personal gain.

Examples:

• An employee stealing company funds.
• A caregiver taking money from a vulnerable person’s account.

Other Common Financial Frauds

• Identity theft and identity fraud.
• Credit card fraud.
• Investment scams.
• Insurance fraud.
• Benefit fraud.
• Tax fraud.
• Payroll fraud.
• Pension scams.
• Money laundering-related fraud schemes.

Key Elements

For conduct to be fraud, authorities generally look for:

1. Dishonesty.
2. Intent to gain financially or cause loss to another.
3. Deception, misrepresentation, concealment, or abuse of trust.

Penalties

Fraud can be prosecuted in the criminal courts. Depending on the seriousness of the offence, penalties can include:

• Fines.
• Compensation orders.
• Confiscation of criminal proceeds.
• Imprisonment (up to 10 years for many offences under the Fraud Act 2006).

If you have a specific situation in mind, describe it and I can explain whether it might be considered financial fraud under UK law.