The new law aims to close a number of loopholes in preceding
anti-fraud legislation, which the Government said was unsuited to
modern fraud.
Until now there has been no single, general fraud law in English
law, but an untidy mess of eight specific statutory crimes, such as
'obtaining property by deception,' and a vague common law offence
of 'conspiracy to defraud'. Scotland does have a common law crime
of fraud, committed when someone achieves a practical result by a
false pretence.
The Fraud Act introduces a general offence of fraud which can be
committed by false representation, by failing to disclose
information or by abuse of position. The offence carries a maximum
sentence of 10 years' imprisonment.
"The Act replaces the existing complicated array of
over-specific and overlapping deception offences," said a Home
Office statement. "These offences have proved inadequate to tackle
the wide range of possible fraudulent activity today or keep pace
with rapidly developing technology."
Struan Robertson, a technology lawyer with Pinsent Masons and
editor of OUT-LAW.COM, said: "One perceived loophole in the old
regime was the possession of computer files in preparation for
launching a phishing attack."
This is where emails are sent in bulk, purporting to represent a
well-known brand in the hope of sending victims to a bogus website
that tricks them into disclosing bank account details. Such
'phishing kits' have been available on the internet but difficult
to prosecute. "That loophole is closed by the new Act," said
Robertson. "When it comes into force, possession of such any
software or data for use in a fraud could result in a prison term
of up to five years."
The Act also provides that writing software "knowing that it is
designed or adapted for use in ... connection with fraud" can
result in a sentence of up to 10 years.
“The new Fraud Act will make an important contribution to the
fight against fraud," said Home Office minister Gerry Sutcliffe.
"It will remove the deficiencies in the existing provisions and
establish an effective criminal law that is flexible enough to
capture the true breadth of fraud today.”
KPMG Forensic's Fraud Barometer reports that fraud levels in the
UK are increasing dramatically. Fraud levels rose to their highest
level in 10 years in 2005, to £900 million that year. Already 2006
is proving worse, with £650 million worth of fraud recorded in the
first six months of the year, compared to £249 million in the same
period in 2005.
KPMG's Barometer measures the fraud levels involved in court
cases in the UK where the fraud under consideration is greater than
£100,000.
Figures published this week by the UK payment card association
APACS said that credit card fraud fell in the latest measured
period, the first six months of 2005, from £219 million to £209
million. Online banking fraud increased from £14 million to £22
million in the same period, it said.
