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Regulatory Regimes For White Collar Crime & Corporate Crime.

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White Collar Crime: Essay 3.

Regulatory regimes for white collar crime & corporate crime.

The regulatory regimes in place for white-collar crime (WCC) and corporate crime (CC) are much more extensive than those for any other sort of crimes, problematically WCC and CC continues to grow. This essay will firstly, examine the regulatory regimes in place for the increasing WCC of credit card fraud and secondly how corporations are regulated to prevent CC against the environment through fly-tipping.

The controversial facts and figures that surround the fast growing crime of credit card fraud can be very disturbing. The most recent figures suggest that credit card fraud has had a major increase from April to December 2006 it rose 6.6% to 56,065. Furthermore the Home Office suggested that the estimated cost of credit and plastic card fraud alone costs Ð'Ј428m in 2006.

The increase awareness to the fast growing crime many regulated regimes have been introduced to try and combat credit card fraud. One major change has been the long awaited Fraud Act. Historically fraud was prosecuted under various and extremely outdated guises of deception. The Fraud Act 2006 has established a single statutory for the general offence of fraud with three ways of committing it. The first is through false representation, by failing to disclose information and by abuse of position. The second way is by obtaining services dishonestly and of possessing, making and supplying articles for use in frauds, and finally through fraud by abuse of position.

The Fraud Act enables new measures for modernising the law to equip investigators and prosecutors to detect and successfully impose the penalties for the offence committed.

There are many external regulators that many companies use. To dominant regulators are APACS and CIFAS. Each has developed regulatory regimes to try and combat credit card fraud. Apacs is the UK trade association for payments and for those institutions that deliver payment services to customers. One of Apacs key responsibilities is co-ordinating a whole range of activities to tackle payment related fraud.

According to Apacs UK card fraud losses fell by 5 per cent in the first six months of 2006, and total fraudulent losses fell from Ð'Ј219.5 million to Ð'Ј209.3 million a decline Apacs attributed to with the introduction of the chip and pin. The chip and pin system allows shoppers to verify purchases at the point of sale by keying in a four digit pin instead of signing on paper was launched to tackle the growing problem of credit card fraud. According to Apacs, the scheme has already had an impact, reducing the losses suffered by banks as a result of counterfeit or lost or stolen cards.

In addition Apacs ensures that the UK payments industry operates to the highest international standards and that those payments are safe, reliable and resilient. The increase of credit card fraud, has also been seen in card not present fraud, were transactions are carried out over the Internet, phone and mail order transactions. In 2005 card not present fraud grew by 21% to Ð'Ј183.2 million, and since tighter regulations being enforced this has slowly decreased with retailers having to request additional details, known as secure- code system. These details include the three digits on the signature strip, but also cardholder addresses, with these details not being authorised can decline payment.

Consequently, even through the costs of fraud is slowly decreasing with the regimes in place such as the chip and pin system, it has incurred short term problems which have had negative responses. Apacs noted that the introduction of the new card system meant new cards were issued and with the large volume of cards made and sent out to customers, many cards and the new pins were never received. Also the secure- code system suffered as retailers refused to use this added measure.

A second regulator is the UK’s fraud prevention service Cifas. Cifas was developed following the rapid rise in fraud losses in the 1980’s, and is a not for profit membership association solely dedicated to the prevention of financial crime, and provides a range of fraud prevention services to its members. Their members included financial services and public authorities.

Cifas regulates fraud by allowing members to exchange details of applications for products and services, which are considered to be fraudulent because the information provided by the applicant fails verification checks. Members also exchange information about accounts and services including insurance and other claims that are considered to be fraudulent. Furthermore, to insure victims of fraud are not targeted further members exchange information about the victims to protect them.

Regulation has been much debated subject, and has insured companies, and the general public are aware of issues that can concern them and to try and insure them that methods are in place to reduce the types of crime committed. The crime of credit card fraud is no exception, and has a lot of media attention due to the increase crime rates and with added thereat of it being linked to identity theft. As it has already been discussed external regulation can only regulate so much. Many banks are urged to carry out internal regulation to try and prevent credit card fraud, as well as working with the external regulators.

Today, many banks offer a card protection plan that protects the account holder from any fraud, lost or stolen card, at an added cost. Other banks have a system where if the card is being used more frequently it alerts the bank and checks are carried out.

An example of this can be seen by Nationwide, as they will contact the customer and ask if they are aware their card is being used, they also can also call for an authorisation with the retailer. Many banks find that internal regulation to fight credit card fraud is expensive and may only put in minimal regimes.

Furthermore, banks and financial institutions are now to be the first point of contact for those who wish to report cheque, plastic card and online fraud offences. The change, which took place at the start of April 2007, means that consumers will need to report these types of fraud to their financial institution rather than the police, with the financial institution becoming responsible for passing details of any crime to the police more regulation internally may be developed. However, the majority of circumstances the victims of credit card fraud are reimbursed.

It is clear that even though regulation is in place, to try and combat



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