Phishing attacks and online credit card fraud could soon be a thing of the past as the Government prepares to update the law relating to fraud in light of technological advancement. The Government's new Fraud Bill was introduced into the House of Lords on 25 May 2005. The Bill modernises the definitions of fraud which have remained unchanged since 1968, to ensure criminals cannot escape prosecution by claiming their criminal acts do not fit within the current outdated narrow definitions. Internet fraudsters and Phishers could be subject to ten year prison sentences under the new Bill.
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Phishing attacks and online credit card fraud could soon be a thing of the past as the Government prepares to update the law relating to fraud in light of technological advancement. The Government's new Fraud Bill was introduced into the House of Lords on 25 May 2005. The Bill modernises the definitions of fraud which have remained unchanged since 1968, to ensure criminals cannot escape prosecution by claiming their criminal acts do not fit within the current outdated narrow definitions. Internet fraudsters and Phishers could be subject to ten year prison sentences under the new Bill.
The Government's Fraud Bill, which was recently introduced in the House of Lords, is designed to better protect the victims of fraud and to ensure prosecutions relating to growing technology abuse. Under the current narrowly defined offences of deception in the Theft Acts, criminals operating online often escape prosecution, as their crime does not technically fall within the definition of the offence. The new Bill creates a general offence of fraud which can be committed in three ways: by false representation, by failing to disclose information and by abuse of position. New offences relating to obtaining services dishonestly and possessing, making and supplying articles for use in fraud have also been created under the Bill. The wording of the Bill has been specifically drafted to include online fraud and other offences involving the use of technology.
- Fraud by false representation
Representations can be communicated in words or by conduct. The explanatory notes accompanying the Bill highlight the fact that there is no limitation in the way in which words must be expressed. Words posted on a website could constitute representations.
"Phishing" attacks will be caught by this offence. A 'Phisher' sends an email to his victim which falsely represents that the email has been sent by a bank or credit card company. The reader is prompted to confirm or provide personal information such as account numbers which can then be used by the Phisher to access the accounts.
Victims of credit card fraudsters will also be protected by the new offence. A person who dishonestly uses a stolen credit card online to pay for items is, by his conduct, making a false representation that he has the authority to use the card and committing an act of fraud, regardless of whether an online retailer is deceived by the representation.
- Fraud by abuse of position
The term 'abuse' is not defined in the Bill and the explanatory notes make it clear that it is intended to cover a wide range of conduct. An example of 'abuse of position' would be an employee of a software company who uses his position to clone software products with the intention of selling the cloned products.
- Possession, making and supplying articles for use in fraud
The meaning of "article" in this offence includes any program or data held in electronic form. This offence would, therefore, cover those in possession of (or the makers or suppliers of) computer programs used to generate credit card numbers or produce blank utility bills. Computer files that store data such as credit card details for fraudulent use could also be caught by the offence.
- Obtaining services dishonestly
This offence would replace the current offence of obtaining services by deception. Under the new law "deception" is not required. This opens up the offence to cover acts such as obtaining services over the Internet using false credit card details or using a decoder to obtain satellite TV channels without paying for them.
Many of the offences under the Theft Acts will be repealed by the new law; however, the common law offence of conspiracy to defraud will remain unchanged. This offence can be used where a fraudster is not making a gain for himself or causing a loss in carrying out the fraud, but by committing the fraud he is prejudicing someone's rights. Use of the offence in relation to technology offences was recently demonstrated by the recent prosecution of four members of the global internet software piracy network known as "Drinkordie".
With identity theft and credit card scams a growing concern, the new legislation is likely to be welcomed by the financial and banking sector and, once passed, should result in a considerable increase in the number of prosecutions of technology related crimes.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 05/07/2005.
