Fraud loophole

The Home Secretary, Michael Howard, has promised to plug a loophole in the law relating to mortgage fraud following a report last week from the Law Commission which recommended urgent new legislation. The gap was brought to light by a Law Lords' decision last July in which they allowed the appeal of alleged mortgage fraudsters because the borrowers had received the money by electronic transfer and had therefore not gained “money belonging to another”, according to section 5 of the Theft Act 1968. The Law Commission last week recommended the creation of two new offences – obtaining a money transfer by deception and retaining credits from dishonest sources – which it believes would make mortgage fraud prosecutions easier. Howard said he accepted the proposals and would introduce legislation at the earliest opportunity.