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Fraud is a criminal offense that has serious impacts on individuals and society. These acts not only cause financial loss but also undermine trust in the business and commercial systems of society. Fraud can take many forms, including complex deceptions or even the use of forged documents to gain unfair benefits.
In this article, the writer will introduce fraud as referenced in the Penal Code, along with examples that might occur in everyday life to show the difference between fraudulent acts and those that are not fraudulent.
Fraud is a criminal offense under Section 341 of the Penal Code, where the perpetrator acts dishonestly by deceiving others with false statements or by concealing the truth, thereby obtaining property from the deceived party or a third party or causing the deceived party or third party to withdraw or destroy legal documents. Such actions are illegal and aim for the perpetrator to gain unfair property or benefits through deception.
The punishment for this type of offense is imprisonment for up to 5 years or a fine of up to 10,000 Baht, or both.
Apart from general fraud under Section 341 mentioned above, fraud in the Penal Code comes in various forms and can be categorized based on the nature of the act as follows:
1. Fraud by impersonating another person or exploiting the victim's weakness, according to Section 342.
If the fraudster impersonates someone else or takes advantage of the victim's lack of knowledge, such as deceiving children or vulnerable individuals into actions they do not understand, the penalty for this type of fraud is imprisonment for up to 5 years, a fine up to 100,000 Baht, or both.
Example: Mr. A deceived young boy B, who did not understand financial matters, into investing in a "business" that was claimed to be highly profitable, promising a large return on investment. Young boy B, wanting money to buy toys, decided to give Mr. A his savings as he had claimed. However, after that, Mr. A disappeared and could not be contacted, and young boy B did not receive the promised return.
2. Fraud by giving false information or concealing the truth, according to Section 343.
This type of fraud involves deceiving the public by providing false information or concealing the truth, such as advertising non-existent products or various other deceptions that undermine social trust.
Example: Mr. A advertised on social media that he had a coffee factory and was recruiting distributors, claiming that being a distributor would generate high income. He then collected registration fees from interested individuals, but after the investors transferred the money, he failed to deliver the products and could no longer be contacted.
3. Deception in Work Without Paying Wages under Section 344
In this case, if a worker is deceived into working but is not paid the agreed wages or is paid less than agreed, such as being made to work hard but receiving less money than deserved, this offense is punishable by imprisonment of up to 3 years, a fine of up to 60,000 baht, or both.
Example: Mr. A advertised hiring 20 employees for a coffee shop, promising to pay wages as agreed. However, after the employees worked, the company failed to pay them as agreed and disappeared, making contact impossible.
4. Deception in Restaurants or Hotels under Section 345
This section refers to deception where a person orders food or drinks or uses hotel services but knows they cannot pay. This is considered fraud. Offenders can be punished with imprisonment for up to 3 months, a fine up to 5,000 baht, or both.
Example: Mr. B went into a luxury restaurant and ordered a fancy meal, telling the staff that he would pay after eating. When it was time to pay, he claimed he had no money or could not pay, causing the restaurant to lose revenue and suffer from the fraud.
5. Deception in Selling Property under Section 346
This occurs when someone persuades the victim to sell property at a price lower than its actual value, exploiting the victim's weakness or lack of understanding. Offenders are punishable by imprisonment for up to 2 years, a fine up to 40,000 baht, or both.
Example: Mr. C deceived Mr. D into buying a used car that had several issues, such as a broken engine and faulty transmission. Mr. C claimed the car was in good condition and sold it at a very low price to trick Mr. D into buying it, even though the car had many defects.
6. Fraud by Insurance Claim under Section 347
The law stipulates that if a person intentionally damages property covered by insurance to deceive an insurance company into paying compensation, it constitutes fraud. Offenders face imprisonment for up to 5 years, a fine up to 100,000 baht, or both.
Example: Mr. A took out car insurance and then intentionally damaged his own car, either by hitting it or using a fake object to destroy it. He claimed it was an accident to request compensation from the insurance company, even though the damage was caused by his own actions and was not an incident the insurance company should cover.
It can be seen that while the term "fraud" may seem simple and generally understood as "taking money by deceit," legally, it has complex details and can be categorized in various ways depending on the intent, method, and impact on the victim.
Fraud must involve deception or lying in order to cause the loss of property or benefits in an unlawful manner. However, sometimes situations where one does not receive what was expected, such as not being paid for services or not receiving the agreed-upon goods, may not necessarily constitute fraud. It could result from financial problems or transactional errors, which are not considered illegal acts.
Understanding what constitutes fraud under the law is important, as not all transaction failures are considered fraud. The author provides clear examples to explain this distinction to all readers as follows:
1. Advertising a product without the intent to deceive, but the result may not meet consumer expectations.
Example: Mr. A advertises a skincare cream claiming it will make the face brighter within 7 days. However, after use, some users do not see immediate results due to differences in skin conditions or usage methods.
In this case, it is not considered fraudulent because there was no intention to deceive. The result may not align with the advertisement, but if the advertising is exaggerated or distorts information, leading consumers to be misled, it may fall under deceptive advertising under the Advertising Act B.E. 2551 (2008).
2. Failure to fulfill a contract does not automatically constitute fraud if there is a clear reason and no intent to deceive.
Example: Mr. B, a home seller, is unable to deliver the house to the customer on time due to unexpected delays in construction, such as shortages of labor and building materials caused by the COVID-19 situation.
In this case, the act shall not be regarded as fraudulent, as the delay resulted from circumstances beyond control and there was no intention to deceive the customer. Nonetheless, it may amount to a breach of contract or a failure to deliver as agreed, which is considered a contractual violation under civil law.
3. Failure to fulfill a debt obligation when disputes arise in business or legal transactions, such as defaulting on a debt, cannot be considered fraud.
Example: Mr. Khom borrowed money from the bank and agreed to repay the debt on time. However, due to financial difficulties, he was unable to make the payment as agreed. Even though he defaulted on the debt, there was no intention to deceive or conceal any information, and he did not use any tricks to deceive the bank in requesting the money.
In this case, the conduct does not constitute fraud, as the default in repayment arose from financial difficulties and did not involve any form of deception or misrepresentation. However, it may be regarded as a breach of contract or a default in debt repayment, which may give rise to legal action for damages or a petition for court enforcement of the debt repayment obligation.
Understanding the difference between fraud and actions that may be mistakenly perceived as fraud is important. Fraud requires an intent to deceive in order to cause someone to lose property in an illegal manner. In some cases, actions may appear deceptive, but there was no such intent. Understanding this issue helps us avoid becoming victims and make better decisions using our judgment.
Fraudulent means acting with dishonest intent to gain benefits that should not be legally obtained for oneself or others.
Deception means presenting false information or concealing true information that should have been disclosed to cause others to be misled.
Title document means a document that serves as evidence of the creation, alteration, transfer, reservation, or suspension of rights.
The intellectual immaturity of children means that a child’s cognitive development is incomplete, or they are unable to think rationally or understand certain matters as well as adults. Since children are still in the stage of mental and intellectual development, they may easily be deceived or believe false information.
Mental weakness refers to individuals with fragile mental health or mental disorders, such as those with psychiatric issues or intellectual disabilities. This limits their ability to think and make decisions, making them more susceptible to being deceived or taken advantage of.
In addition to the various forms of fraud mentioned above, there are also other types of fraud, such as fraudulent loans. Penalties for such fraud are outlined in the Royal Decree on Fraudulent Lending to the Public, 1984, which the author will discuss in the next article.
References:
1. Office of Justice Affairs. Retrieved from the Office of Justice Affairs.
2. Criminal Code of Thailand, Sections 341 to 347.
