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Home Office ministers are poised to give the green light for the establishment of a central e-crime reporting and investigation agency in the UK.

But instead of creating a Policing Central E-Crime Unit (PCEU), as proposed by ACPO (the Association of Chief Police Officers) and the Metropolitan Police, government minsters want to establish the unit as a law enforcement arm of the National Fraud Reporting Centre (NFRC).

Since the National Hi-Tech Crime Unit (NHTCU) was amalgamated with the Serious and Organised Crime Agency two years ago, commercial victims of cybercrime have been obliged to report problems to their local police forces, a situation that often proves unworkable. The Serious Organised Crime Agency (SOCA) is focused on high-level trans-national crime and only takes reports of cybercrime indirectly.

Policies introduced in April 2006 mean the public is advised to report incidents of credit card or auction fraud to the banks or auction houses instead of the police. This too is working out badly and there's a widespread belief that cybercrimes more often than not go unreported - unlike the US, where the Internet Crime Complaint Center (IC3.org) acts as a clearing house.

Without a grip on the scope of the e-crime problem resource allocation decisions take place in the absence of solid facts. Parliamentary under secretary of state Vernon Coaker told a House of Lords science and technology committee on Tuesday that the Home Office acknowledged there was a gap in e-crime reporting and cybercrime investigation that needs to be bridged.

"Within reason, the Home Office will look to fund a law enforcement capability alongside the NRFC, but we haven't got a budget for this work yet," the minster said.

"We'd like to see all reports of fraud sent to the NFRC... which would become a one-stop shop for the reporting of fraud. We don't want a multiplicity of centres. We want to bring it together," Coaker told the committee.

Under these revised plans all types of cybercrime - including those that didn't directly involve financial fraud - would be handled by the NFRC. Its investigative arm would tackle enforcement. NFRC would receive a budget of around £15m.

"Different pieces of law enforcement do different things but there is a gap, without a shadow of a doubt. We need NFRC but then alongside that a law enforcement capability. Don't want NFRC to set up a law enforcement arm which didn't relate to other bodies even though in the first few weeks it would gain plaudits with people saying the government is finally funding an e-crime unit," Coaker said.

"The key question to work out what you do at national, regional and local level. National strategic law enforcement needs to act as a catalyst for change," he added.

The approach is very different to previous plans from the police.

Speaking at the Infosec conference last month the Metropolitan Police's head of e-crime, Detective Supt Charlie McMurdie, said a business plan to create a 50-strong Policing Central E-Crime Unit had been submitted and she hoped for an answer within "two to three week"s. The unit would cost about £5m in total. The Home Office was asked to approve £1.3m in start-up funding.

Coaker is to meet representatives from the City of London Police, SOCA's e-crime unit, the Met's Hi-tech Crime Unit, and the Child Exploitation and Online Protection Centre - on 4 June for talks about how such a unit would sit alongside their responsibilities.

The proceedings of Tuesday's House of Lords science and technology committee can be found here. Coaker's testimony (of around 40 minutes) can be found after the 37-minute mark. ®

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