Asking Parliament to Act, Canadian Court Reverses E-Commerce Fraud Case
The Supreme Court of Canada asked Parliament to strengthen e-commerce fraud laws, in the court’s its reversal of a fraud inducement case last week. Rene Hamilton had been accuses of sending “teaser” e-mails to more than 300 people, advertising for purchase software files that generated valid credit card numbers. Bomb- making and house break-in instructions were also included in the files, but not advertised in the e-mails.
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The trial judge accepted Hamilton’s testimony that he hadn’t read the files themselves and didn’t use the credit card numbers he generated, and acquitted him for lack of “malevolent” intent. Though 20 sales of the files were confirmed, the affected bank received no complaints of account misuse. “The trial judge’s conclusion that the accused did not intend to induce the recipients to use those [credit card] numbers is incompatible with the plain meaning of the ’teaser’ e-mail and with her other findings of fact, including her finding that the accused understood that the use of the generated numbers was illegal,” Justice Morris Fish wrote for the 6-3 majority. Hamilton’s ad statement that “if you download the programs and use them… we accept no liability for your actions!” was a clear indication he knew their purpose was illegal, Fish added.
The majority also faulted the trial judge for conflating “motive” and “intent” - different under Canadian law -- and ruling Hamilton innocent for only wanting to make money off the number generator. The majority didn’t hold Hamilton liable for the bomb-making and other files in the package, accepting his testimony that he didn’t advertise them and didn’t know what they contained.
But the court refrained from specifically interpreting earlier inducement laws to apply wholesale online. “The Internet provides fertile ground for sowing the seeds of unlawful conduct on a borderless scale,” Fish wrote. But the appropriate “prophylactic response… must be left to Parliament,” since “courts cannot contain the inherent dangers of cyberspace crime by expanding or transforming offences, such as counseling [inducement], that were conceived to meet a different and unrelated need.”
The dissenting justices agreed with the trial court that Hamilton was “naive, lazy or ignorant,” but lacked criminal intent. They accepted his testimony that he didn’t know at the time that credit cards could be used without name, expiration date or security code on the back of the card. “The counsellor must intend that the counselled offence be committed for the offence to be made out,” which the govt. didn’t prove, Justice Louise Charron wrote for the 3 dissenters. Citing the Canadian Civil Liberties Assn., which filed a brief in the case, the justices said “the interpretation advocated by the Crown would risk criminalizing legitimate forms of protest, advocacy or dissent and, arguably, even the reproduction and distribution, for historical purposes, of classic texts.” Under such interpretation, “some may argue that the publication of Shakespeare’s Henry VI, with its famous phrase ‘let’s kill all the lawyers,’ should be subject to state scrutiny!”