Software firms 'should compensate fraud victims'Peers say more should be done to fight e-crime

10 August 2007

 

A laptop

Software firms should be forced to pay up if their customers fall victim to e-criminals because of security flaws, an influential Parliamentary group said today.

The move is needed to stop IT companies ‘dumping’ the risks from an increasingly lawless internet on to individuals using strict licensing agreements, according to the Lords Science and Technology Committee.

Government should also create a central system for reporting e-crime, establish a ‘kite mark’ standard for secure internet services, and give the police more resources to tackle the burgeoning problem, the peers insisted.

Online crime is thought to cost the UK economy billions of pounds every year, with thousands of people and businesses falling victim to identity theft and other forms of fraud.

Online security

The peers' report claims it is no longer ‘realistic’ to expect individuals to be responsible for their own security because the conmen are too sophisticated and ‘outfox’ them.

Chairman Lord Broers said the web was a ‘huge force for good’ but confidence in its safety is being undermined.

‘At the moment it seems that the internet is increasingly perceived as a sort of 'wild west', outside the law,’ he said.

‘People are said to fear e-crime more than mugging. That needs to change, or else confidence in the internet could be destroyed.

‘You can't just rely on individuals to take responsibility for their own security. They will always be outfoxed by the bad guys.’

Internet service providers

He added: ‘We feel many of the organisations profiting from internet services now need to take their share of the responsibility.

‘That includes the IT industry and the software vendors, the banks and internet traders, and the internet service providers.’

The report says there are currently no ‘commercial incentives’ for companies to make their products simple and secure, and insists the government should lobby at European level to make them liable for breaches due to their negligence.

It said: ‘Companies are all too easily able to dump risks on to consumers through licensing agreements, so avoiding paying the costs of insecurity. This must change.’

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