Clause 7

Fraud Bill [Lords] – in a Public Bill Committee at 4:15 pm on 20th June 2006.

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Making or supplying articles for use in frauds

Photo of Dominic Grieve Dominic Grieve Shadow Attorney General

I beg to move amendmentNo. 1, in clause 7, page 3, line 15, leave out ‘or' and insert ‘and'.

This follows on from our earlier debate, but is slightly different because there is no equivalent offence to making or supplying an article as that is defined here. Subsection (1) states:

“A person is guilty of an offence if he makes, adapts, supplies or offers to supply any article—knowing that it is designed or adapted for use in the course of or in connection with fraud, or intending it to be used to commit, or assist in the commission of, fraud.”

If paragraph (a) were confined to knowing that it is designed for use in the course of fraud, I should not be so concerned. However, adapted for use in the course of or in connection with fraud seems to be a wide term. I worry that it could catch somebody who makes a  perfectly reasonable device for legitimate use. On Second Reading, I used the example of the conjuring trick. Such tricks usually require somebody to commit a fraud upon a willing group of spectators. To say that an article of that sort is unlawful causes me concern, particularly as it is not “and” intending it to be used to commit, or assist in the commission of fraud but “or” intending it to be used to commit, or assist in the commission of fraud.

One way of dealing with the matter would be to say that it should not be “or” but “and”. That is what the amendment would achieve. However, I am aware that that would create a restricted offence of specific intent. I acknowledge straight away to the Solicitor-General that that might be too restrictive. Therefore, this, too, is a probing amendment, designed to tease out in the course of debate whether what has been drafted here correctly meets what we are trying to achieve, or whether it goes a little too far.

I shall listen to the Solicitor-General with interest, but my first reading of the clause made me slightly surprised, because articles made, adapted, supplied or offered is a wide term. The nature of fraud being what it is, all sorts of items could be included in that category. I shall be interested to know what defence could be raised, for example, if a person knows that he is supplying an article to a conjuror. He knows very well that it is designed or adapted for use in the course of or in connection with fraud—or could be—but that is not what is intended. Does he have a defence? That is the key question that the Committee needs to debate.

Photo of Mike O'Brien Mike O'Brien Solicitor General, Law Officers' Department

The clause makes it an offence for a person to make, adapt, supply or offer to supply any article for use in fraud. The impact of the amendment would be to place a highly undesirable restriction on the breadth of the offence. It would narrow the offence much too much.

As it stands, clause 7 allows for a precise distinction to be made between the parts played by those who know that an article is made or adapted for use in the commission of fraud and those who intend that it should be used for fraudulent purposes. I assure the Committee that the distinction is a significant one. For example, it is possible to imagine the supply of an ordinarily innocent article—in other words, an article, that under any circumstances, could be used legitimately—to be used in the commission of a fraud.

The example of a credit card reader comes to mind. The device has not been made or adapted with the fraud in mind but could be supplied with the intention of it being used fraudulently. There are other examples. A person may have software that is capable of being used fraudulently, but it has not been made for that purpose. The hon. Member for Lichfield (Michael Fabricant) referred to such an item. A person supplies security devices that are designed either to prevent fraud or to give legitimate access to something and it may well be that a person intends that they be used for a fraudulent purpose. A person might sell credit card numbers, usually on the internet, knowing that they could be used to commit fraud. There are all types of things that might come to mind.

Conversely, a criminal may make an article specifically for a fraud—for example, a device covertly to copy credit cards—but be ambivalent about whether the  person to whom it is supplied will use it for fraud. He will not have the intention necessary for clause 7(1)(b) but will fall within clause 7(1)(a).

The amendment seeks to provide not only that the article must be specifically made or adapted for use in fraud but that the person who makes or adapts it must intend that it be used in fraud. That would significantly limit the clause’s effect and would not catch either of those examples.

The importance of the clause is that it should be able to cover both varieties of offence, thereby allowing for the fact that those who make, adapt or supply articles for use in fraud may not have any intention to carry out the fraud themselves. That carries weight in the fight against organised criminal gangs, which often prefer to engage in fraud at several moves from the action, for example, by selling personal financial information. The aim is that that will be used for a fraud, but they do not carry out the fraud themselves. Clause 7 will not capture the actions of the innocent, which necessarily include the actions of those innocently unaware but somehow caught up in the commission of an offence.

The clause 7 offence, like the existing law in section 25, does not contain a dishonesty requirement, but requires that the article be made for use in a fraud. Therefore, the supply or manufacture of articles, such as devices and software, which are designed innocently, but might possibly be misused to commit a fraud would not be grounds to give rise to a charge for fraud.

The wording used in clause 7 follows the existing law in section 25 of the Theft Act and, as we have discussed, case law has established that it requires a general intention to commit fraud. I hope that hon. Members are reassured by that and that we can make some progress.

Photo of Dominic Grieve Dominic Grieve Shadow Attorney General

I am reassured. We can move on. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.