Fraud is now the most commonly committed crime by a long way. In 2022, one in 15 adults in England and Wales fell victim to it and, sadly, 18% of these were victimised more than once. In the year ending March 2021, Action Fraud – the UK’s national reporting centre for fraud and cyber-crime – received victim reports totalling a loss of £2.35bn. But that doesn’t show the whole picture. The total cost to society of fraud against individuals in England and Wales – taking into consideration not just money lost, but also the cost of caring for victims – was estimated to be at least £6.8bn in 2019-20.
The UK’s new Fraud Strategy sets out the government’s aim to stop this crime at source and pursue those responsible wherever they are in the world, aiming to achieve a reduction in fraud of 10% by 2025 as compared to 2019 levels.
The Strategy outlines three elements:
- Government and law enforcement will pursue more fraudsters and bring them to justice.
- Government and industry will work together to stop fraud attempts.
- The British people will be more empowered to recognise, avoid and report fraud when they encounter it, and better supported when they do fall victim to it.
Releasing the Strategy, Home Secretary Suella Braverman said: “The publication of this strategy marks a fundamental shift in our approach to tackling fraud…This strategy sets out a plan to stop fraud at source and pursue those responsible wherever they are in the world.”
The government claims that the Strategy contains more than 50 measures that will contribute to the reduction of fraud. While the impact of these measures is likely to vary considerably, key steps include:
- Measures to stop criminals abusing the telephone network, including a ban on SIM farms (devices that can use multiple SIM cards), exploring regulation of mass texting service and restrictions on number ‘spoofing’ – when a caller deliberately falsifies the information transmitted to your caller ID display to disguise their identity.
- A ban on cold calls relating to financial products.
- Protecting more people online by driving industry action, including through the world-leading Online Safety Bill, commitments from tech firms to make it easier to report scams, and publishing information on the levels of fraud on different platforms.
- Establishment of a National Fraud Squad with 400 new investigators.
- Replacement of Action Fraud, to make it easier for victims to report fraud and for law enforcement to use and share data.
- The appointment of Anthony Browne MP as Anti-Fraud Champion.
- A new UK Intelligence Community cell to drive intelligence-led lead disruptions.
- Ensuring more people get their money back by changing the law to require banks and financial institutions to pay back victims of fraud.
Despite the proposed establishment of the National Fraud Squad, the fraud landscape remains complex, with many policy and operational responsibilities across various government departments and agencies.
The Home Office is the overall policy and strategic system lead on fraud against individuals and businesses, while the National Crime Agency (NCA), through the National Economic Crime Centre (NECC), retains the operational system lead working across UK law enforcement, the intelligence community and industry.
The City of London Police, as national lead force for fraud, leads and co-ordinates the efforts of the Regional Organised Crime Units (ROCUs) and the 43 police forces across England and Wales. Local police forces across the UK and ROCUs in England and Wales will continue to be responsible for the vast majority of fraud investigations in the UK, as well as leading on support for victims and businesses in their local areas. The Serious Fraud Office (SFO) will continue to use its specialist investigatory structures and powers to tackle highly complex frauds.
The newly created Public Sector Fraud Authority is to be the government’s centre of expertise for managing fraud against the public sector.
Given the complexity of the landscape for business and individual fraud, the Strategy misses an opportunity to increase co-ordination and centralisation of both policy-making authority and investigative resources.
Does it go far enough?
Despite the complexities of navigating the law enforcement structure, the allocation of 400 officers to this specialist area is likely to fall significantly short of the resourcing required to achieve the improvement in law enforcement response. Training specialised resources will take time.
The introduction of a voluntary charter to reduce the role by tech companies in propagating fraud is also unlikely to create the desired impact, given the disproportionate role these companies play in the enabling of online fraud and jurisdictional challenges.
Most concerning is an unclear funding model for the future development, and implementation of an effective public-private partnership to tackle fraud. This reflects the recently published Economic Crime Plan 2, with several initiatives highlighted but limited detail given on future funding requirements.
The prevalence of fraud causes harm to individuals, businesses and public-sector bodies alike. Yet the focus on scams and individuals fails to take a holistic approach to the threat of fraud. The Strategy likewise seems to fall short on the realisation of the scale of the challenge. It lacks the required ambition to achieve genuine structural and resourcing reform, which will be required to address the fraud challenge as it continues to diversify.
ICAEW will continue to work closely with government and other public and private sector stakeholders to establish practical and impactful approaches to reduce the scourge of fraud. The ICAEW has produced several resources outlining measures for chartered accountants to increase their awareness of the threats of fraud and how to mitigate the impact fraudulent activities can present, both financially and reputationally. We look forward to working with the government to build upon this Strategy through additional engagement in the future.
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