UK Chancellor Alistair Darling managed to keep a straight face as he told the House of Commons that as terrifying as the loss of 25 million child benefit records might look, no fraud on these accounts had been detected. But how can he be certain? There is no mechanism for detecting such crimes.

The Government has poked around its dusty bucket of initiatives and – hey presto – found the long-overdue £11 million National Fraud Reporting Centre, supposed to be run by the City of London Police Fraud Squad and, in theory, the place that in future all reports of e-fraud will end up to be mulled over by the police. Except that the NFRC strategy appears to have flaws.

In April of this year, the Government infamously changed the rules on e-crime reporting, requiring consumers to take their ID theft and credit card scam woes to their financial providers and not the police. The logic looks sound, but we have to assume that it will have the effect of delaying e-crime statistics while dozens of private institutions pass on data to the NFRC, possibly weeks or months later. Or possibly never.

The logic for this is that it is the company that is being defrauded because it is the company that takes the financial hit, and the fact that the crime happened to a consumer is immaterial. The crime happens where the loss occurs. This legalistic nuance will condemn the NCRC to showing us the world of e-crimes past, long after the patters of fraud can feed usefully back into mainstream policing.

So, if fraudsters ever do get around to tapping the lost Child Benefit database of every parent and child in the UK, there is a real risk that the data will not turn up on the radar for months. Perversely, the loss has become so political the police will probably be phoning up the banks every day to see if any fraud is starting to appear. But why not get consumers to report crimes simultaneously to the police and to the financial provider?

The consequences of this calamity turning into a real fraud – and not just a theoretical one – could actually bring down the whole UK Government. Imagine that. The first big casualty of the e-crime wave of the early 21st Century could be the Government of the world’s fourth largest economy.

We knew the Internet would change the world, but not in this way.