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Telling lies to a computer is still lying, rules High Court

Discount scheme deception

Internet Security Threat Report 2014

A person can be guilty of deceit when he lies to a machine rather than a human, a judge has ruled. Renault sued over abuse of a discount scheme and won the deception-by-computer argument. But its case was thrown out because it profited from the abuse.

A company called Fleetpro Technical Services ran an affinity scheme with Renault UK, which entitled members of the British Airline Pilots Association (BALPA) and their immediate families to discounts on new Renault cars. Fleetpro took orders that were then entered into Renault's computer system. Renault S A, the French parent company, then built each car to order.

The deception

Over a 10 month period, Fleetpro placed 217 vehicles through the scheme. But only three of these orders came from eligible members of the scheme. The other 214 vehicles were bought at a discount to which the buyer should not have been entitled.

It transpired that the sole director and employee of Fleetpro, Russell Thoms, had been running a website that passed on the discounts to other internet brokers who resold the cars to members of the public.

Renault sued Fleetpro and Thoms, citing losses of almost £700,000.

The evidence showed that when Thoms took orders via his site, he sent them by email to a Renault fleet sales executive citing the code BALPA or the number 46172, thereby representing that the order was destined for a qualifying customer. The executive printed the emails and his assistant entered them into the computer system of Renault UK. That action ordered the car from Renault UK's parent company in France and recorded the order as a beneficiary of the discount scheme.

According to the judgment, the assistant's was "the last human brain in contact with the claim that a particular order fell within the terms of the discount scheme".

A fraudulent misrepresentation can be made to a machine

"The point of principle which thus arises is whether it is possible in law to find a person liable in deceit if the fraudulent misrepresentation alleged was made not to a human being, but to a machine," wrote judge Richard Seymour QC.

"I see no objection in principle to holding that a fraudulent misrepresentation can be made to a machine acting on behalf of the claimant, rather than to an individual, if the machine is set up to process certain information in a particular way in which it would not process information about the material transaction if the correct information were given," he continued.

"For the purposes of the present action, as it seems to me, a misrepresentation was made to the Importer [Renault UK] when the Importer’s computer was told that it should process a particular transaction as one to which the discounts for which the [pilots' affinity scheme] provided applied, when that was not in fact correct."

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