Fraud in Information and Communications Technology

Introduction

Information and communications technology fraud and abuse is a serious problem.  Additional risks such as those associated with hacking and threats from computer viruses require organisations to pay the utmost vigilance to the security of their computer systems.  And with the continuing advent of new technologies, new risks are born.  This article will concentrate on fraud in information and communications technology, and how this is specifically dealt with under the Fraud Act 2006.

Application of the Fraud Act 2006

The Fraud Act 2006, which took effect in January 2007, deals with some of the deficiencies, at least as far as information and communications technology fraud is concerned, of the Theft Act 1968 and the Theft Act 1978.  Under s1 of the Fraud Act 2006 a person is guilty of fraud if they act contrary to ss2, 3 and 4 of the Act.  These sections cover, respectively, fraud by false representation, fraud by failing to disclose information, and fraud by abuse of position.  These sections will now be considered from the point of view of information and communications technology.

Fraud by false representation

Under s2 of the Fraud Act 2006 a person commits fraud if they dishonestly make a false representation with the intention of making a gain for themselves or another, to cause a loss to another, or to put another at risk of a loss.  A representation is false if it is untrue or misleading and the person making the representation knows that this is or might be the case.  Representations can be made to devices designed to deal with communications, so both emails and text messages are covered.  Representations can also be made online, through, for example, internet banking services.  Under s5 of the Act a gain or loss may only concern money or other property, but may be temporary or permanent.  Consequently, intellectual property is included.  Fraud under this section will also apply to ‘phishing’, that is, masquerading as a trustworthy entity in order to acquire confidential information such as user account numbers and passwords, and ‘pharming’, that is, redirecting traffic from one website to another, bogus website, again, usually for the purpose of obtaining confidential identity data.

Fraud by failing to disclose information

Under s3 of the Fraud Act 2006 a person commits fraud if they dishonestly fail to disclose to another person information which they have a legal duty to disclose and if they intend, by failing to make the disclosure, to make a gain for themselves or another or to cause a loss to another, or to put another at risk of loss.  This offence could apply to, for example, the electronic submission of tax returns or applying for or renewing a television licence online.  Transactions between businesses and between consumers and businesses will also fall within the provisions of this section.

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For more information on:

  • Fraud by abuse of position
  • Articles for use in fraud