The government’s long awaited fraud-busting initiative – the Fraud Act 2006 - has officially become part of UK law today.
Historially fraud was prosecuted under various and extremely outdated guises of Deception, but the Fraud Act 2006 establishes a single statutory offence of fraud for the first time and opens up new avenues for prosecuting fraudsters caught in the act.
The Act is part of an ongoing government reform of the judiciary system. Back in November the Queen’s Speech revealed the government’s plans to launch a new standalone bill to allow for trials without a jury in cases of major and complex fraud.
To combat the changing face of fraud in the age of technology, the Act also creates two new offences aimed at technology fraud – the crime of ‘obtaining services dishonestly’ such as credit card fraud over the internet, and ‘possessing articles for use in frauds’ – aimed at higher level fraudsters and criminal gangs that commit fraud on a mass scale.
However, John Smart, fraud partner at accountancy firm Ernst & Young said there were still flaws within the Act from a business viewpoint.
"The Fraud Act 2006, while welcome, is likely to have little immediate effect on businesses because it's main purpose is to speed fraud cases through the Courts,” he said. “It does not address the major bottleneck - a lack of police investigation resources. The increased scope of sentencing powers available under the Act will have only a marginal deterrent effect because white-collar fraudsters know that the level of detection and prosecution continues to be low. "
"The best thing the business community can do is to continue to protect itself by adopting a strong anti-fraud culture," he added.
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