HL Deb 17 May 2004 vol 661 cc24-5WS
Baroness Scotland of Asthal

It is estimated that fraud currently costs the UK economy £14 billion a year. To equip law enforcement agencies to tackle the threat we face from fraud, the existing law needs to be modernised. The main problem is that the existing statutes focus on very specific types of fraudulent behaviour, so they do not effectively cover all the potential varieties of fraud and cannot keep pace with rapidly developing technology.

The Government are today publishing a consultation paper on fraud law reform. Its proposals are based on those made by the Law Commission in 2002, following a reference made to them in 1998 by the then Home Secretary. In particular he asked the Law Commission to consider whether a general offence of fraud would improve the criminal law. The commission concluded that it would help to make the law simpler and more easily understandable for juries, defendants and the general public and make the prosecution process more efficient and effective.

The central proposal is that there should be a general offence of fraud which can be committed in three different ways: by false representation, by wrongfully failing to disclose information or by abuse of position. In each case the behaviour must be dishonest, and must intend to make a gain for the defendant or cause a loss to another. However the gain does not actually have to be obtained, as it does under the existing statutory offences.

We also propose a new offence of "obtaining services dishonestly", to close a current loophole regarding fraudulent use of machines. The current offence of obtaining services by deception does not cover, for example, giving false details to access data from the internet for which a charge is made. This is because a machine has no mind and so cannot be "deceived".

The consultation paper also seeks views on whether all behaviour which is currently prosecuted as conspiracy to defraud can be prosecuted under the proposed new law of fraud (or under other existing law) so that the common law offence of conspiracy to defraud can be repealed. It also seeks views on the possible extension of the existing offence of fraudulent trading, and on the creation of a new offence of possessing equipment to commit fraud. The proposals will cover England, Wales and Northern Ireland.

This legislative reform is only part of a wider set of current initiatives which will help tackle fraud. For their part the Government have:

  • set up the Assets Recovery Agency and implemented the Proceeds of Crime Act 2002. These will take the profit out of crime by increasing powers to find and recover money from those who benefit from and launder the proceeds of frauds and other crimes;
  • agreed extra resources for the Serious Fraud Office and City of London Police to tackle fraud;
  • included new procedures to deal with multiple offending in the current Domestic Violence, Crime and Victims Bill;
  • included proposals to ensure effective incentives for criminals who give evidence against their associates, which will help in fraud cases, in the White Paper One Step Ahead, published on 29 March 2004;
  • proposed new methods of tackling identity fraud in the White Paper on Legislation on Identity Cards, published on 26 April 2004. The introduction of identity cards incorporating biometrics (such as finger or iris scans) will help people to identify themselves uniquely and protect their identity against fraud.

Combating fraud requires vigilance from all and we very much welcome the measures that financial institutions and the retail industry have taken to protect credit cards by a chip-and-PIN system. That step has been found to cut card fraud dramatically in other countries.