The most effective way to tackle fraud is to prevent it occurring in the first place. This requires co-operation across the private and public sectors, with the Government using its convening power, says the Justice Committee of MPs in their report, ‘Fraud and the Justice System‘, covering England and Wales.
The MPs complained of ‘an epidemic of fraud cases’ and even a growth in these crimes, ‘if there is not a considerable shift in the way they are investigated, prosecuted, and prevented’.
Chair of the Justice Committee is Sir Bob Neill, the Conservative MP for Bromley and Chislehurst. He said: “A week ago, it was announced that it is a now a key priority for police to attend every burglary reported to them. It is right that victims of such invasive and traumatic crime should know that they will be supported, but we should not underestimate the impact that offences of fraud also have upon victims.
“Fraud currently accounts for 40 per cent of crime and the figure is growing. People are losing their life savings and suffering lasting emotional and psychological harm. But the level of concern from law enforcement falls short of what is required.
“The decision has already been made to replace Action Fraud, and the Government will need to make sure its successor can meet the demands placed on it, but wider criminal justice system must also renew its focus on this crime. Fraud prevention, investigation and prosecution too often has seemed like an afterthought, last in the queue for resources, monitoring and even court time.
“We need the criminal justice system to have the resources and focus to be able to adapt to new technologies and emerging trends. The current sense of inertia cannot continue, we need meaningful action now.”
The report quoted an estimated 4.6 million fraud offences each year, but in the year ending September 2021 7,609 defendants were prosecuted for fraud and forgery as the principal offence by the CPS (Crown Prosecution Service). The committee took evidence from witnesses between February and April such as police, regulators, and counter-fraud figures such as Luke Taylor, a member of TUFF (Telecommunications UK Fraud Forum) and Katy Worobec, Managing Director for Economic Crime, at the trade association UK Finance.
Written evidence
And among the written evidence sent to the MPs, a barrister, Adrian Darbishire QC described fraud as ‘catastrophically under-reported , under-investigated and under-prosecuted’; and ‘there exists no effective mechanism’ for business enterprises ‘to work effectively with the law enforcement authorities to address this endemic offending’. He denied that the problem is (lack of) resources; rather, he termed it ‘a deep-seated refusal to face the problem; to recognise frankly its extent and its attendant harms; and then to think through, realistically and boldly, the measures needed to address it.’
More specifically about the Serious Fraud Office, he complained that the SFO’s selection of cases is ‘skewed to high-profile instances of sharp business practice, or stale cases of overseas bribery’. Meanwhile, ‘persistent, harmful, domestic fraud goes almost wholly unchecked’; ‘unsexy’ cases that attract no headlines, but destroy lives.
Similarly, in its submission, the private firm Fedora Investigations (UK) pointed to a lack of will by the authorities. Fraud schemes by organised crime reach ‘a degree of difficulty’, ‘that very few police officers could ever cope with and the matter is screened out. Not because it is not worth investigating but because there is no skill or will to do so.’ That submission pointed to a missed opportunity in the 2000s with the NHTCU (National High Tech Crime Unit); however that passed, and the Serious and Organised Crime Agency, now called the National Crime Agency, concentrated on countering drugs, ‘safe in the knowledge that Action Fraud would remove any criticism that the UK was doing nothing about fraud and the country has never recovered’.
Fedora queried why police don’t use Association of British investigators (ABI) members. The firm complained there has never been a proper discussion about whether ‘volume crime such as fraud could not be pushed out to such companies in a carefully designed way. Such a scheme would ensure that there were no beaches of GDPR/data protection by asking the member of the public at the time of reporting whether they are comfortable with the matter being passed to the ABI should the police not be able to take the matter on immediately.’
In reality, this is what happens anyway, Fedora went on. The public report to Action Fraud ‘and after months of nothing happening, they turn to private investigation companies to investigate the matter if they have sufficient funds available’. Those companies then develop and harvest the information, intelligence and hopefully evidence which then gets fed back to the police force (which they absolutely love), or it is submitted to a law firm. For the average victim, that’s not possible ‘and as a result, a ‘two tier system’ becomes the norm in the UK where the average man or woman on the street who has been defrauded, is left stranded in no man’s land with nowhere to go or turn to’.
The tech firm Meta said that it takes a ‘zero tolerance approach to fraud’ on its platforms, such as Facebook; in the last quarter of 2021, it removed 1.7 billion fake accounts from Facebook, ‘99.9 per cent before they were reported to us’. The firm said it employs ‘around 40,000 people’ on safety and security; around half of those directly review content. The firm gave no numbers on outcomes, such as numbers of crimes taken to court as a result of its work.
Among the committee’s many recommendations, the MPs asked for ‘charters with the social media and tech companies to capture their commitments and responsibilities in relation to tackling fraud, and to enable them to be held to account’. Their report complained of ‘a lack of engagement’ by the tech sector, given that most frauds happen through their platforms.
For the report online, visit the Justice Committee on the UK Parliament website.
