Fraud fears as government get wired

There are risks associated with going online, and the government is no exception

Online delivery of government services, announced this week, has sparked fears of fraud among IT professionals.

An Audit Office report in December found that offline housing benefit fraud alone costs the government £100m annually. With Tony Blair determined to wire all government services by 2008, the experts warn that fraud could increase as government services move on to the Net.

Peter Miles, marketing director of software firm Radius Computer Services, believes the Internet multiplies the potential risk of fraud. "As more services are made available online the opportunity for fraud increases and the fraudsters will take advantage of it," he said.

Bob Griffiths, national secretary of the Society of IT management -- the union for local government IT managers -- agrees. "There is an opportunity for fraud on a far greater scale. It is difficult enough to authenticate people with face to face interviews, but on the Net claimants could replicate hundreds of false claims," he said.

Griffiths believes IT managers are waiting to see what happens with authentication and encryption before developing systems but remains pessimistic about a solution being found in the near future. "Credit card companies are still struggling to combat fraud and they haven't come up with a solution yet. Security needs to be put in place before managers are confident. It is causing some sleepless nights," he said.

South London local authority Lewisham is already offering residents the chance to contact the council electronically. Booths around the borough allow claimants to send council tax and other forms electronically. The borough has also set up an electronic link with The Department of Social Security in Belfast which allows them to check if benefit claimants are genuine.

Principal fraud officer Kathy Bateman is concerned online claims will produce a new breed of techie fraudster. "It would be a different sort of fraud, with more techie-minded people involved in it. We will have to try and keep one step ahead of it, I don't want to think about it," she says.

The government plans to introduce a range of technologies, from PIN numbers to digital signatures to minimise the risk of false declarations and impersonation. It is envisaged citizens will have smart cards or secret password codes in their dealings with government electronically.

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