Recent years have seen the emergence of novel and complex fraudulent schemes that may not be captured by the existing cheating offences in the Penal Code, such as where a wrongful gain or loss was intended but a victim is not easily identified. A significant example is the manipulation of the London Interbank Offered Rate (“LIBOR“) in the UK via fraudulent representations made by banks. As LIBOR is often used as a benchmark for financial products, it had far-reaching consequences on financial markets and products. However, it was difficult to identify any specific person who suffered loss or show that the victims relied upon the fraudulent representations.
To address this loophole, the Criminal Law Reform Act (“CLRA“) introduced sections 424A and 424B of the Penal Code. The new sections focus on the culpability of the offender instead of the effect on the victim – unlike existing cheating offences, they do not require the prosecution to establish that a victim has been deceived. Section 424A deals with fraud that is not directly connected with a written or oral contract for the supply of goods or services, while section 424B deals with fraud in connection with contracts for goods and services.
Section 424A had earlier come into effect on 1 January 2020. However, the commencement of section 424B was delayed to allow for the development of a mechanism to enable private individuals to obtain recourse for common and smaller losses, such as transactions on e-commerce platforms.
On 27 July 2023, the Ministry of Home Affairs (“MHA“) announced that section 424B would come into effect on 28 July 2023.
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