Ten years on from the first fraud review, Government is not doing nearly enough to help the public defend themselves against a deluge of fraud and cybercrime, according to the Fraud Advisory Panel.
The criticisms are made in the Panel’s new report, The Fraud Review – 10 years on. In 2006 the review for the then Labour Government described a fraudsters’ paradise of patchy policing, muddled legislation, soft penalties and ineffectual courts. Many of those same failings – including under-resourced policing, widespread ignorance of fraud threats, an uncoordinated approach to fighting fraud – persist, it is claimed, and while some promising and significant fraud fighting improvements have been introduced, they too often fall victim to policy change and cost-cutting.
Fraud Advisory Panel chair, David Kirk, said: “A decade after the government’s fraud review, official support for fraud victims is still poor and the local police response to the growing fraud threat remains inadequate. Meanwhile, little is done to help people understand the dangers of fraud and what they can do to protect themselves. This simply is not good enough.
“A national public education campaign is now long overdue. It must be well-funded, sustained and smart, to press home these important messages – just like seatbelt and drink-drive campaigns. The benefits will far outweigh the costs and this should be given the highest priority by the government.”
See the report also for a discussion between four of the five most recent directors of the Serious Fraud Office (SFO) – George Staple, Ros Wright, Robert Wardle and current director David Green.
The report takes issue with Metropolitan Police commissioner Sir Bernard Hogan-Howe for his suggestion that banks should stop compensating customers for online credit-card fraud because they are being ‘rewarded for bad behaviour’.
Such attitudes gravely underplay the sheer guile and cunning of the fraudster, not to mention the true, baffling complexity of much everyday technology and finance, the report says. “Before we start to demand more by way of self-defence from internet users we need a well-funded, broadly-based and sustained public education programme to: raise awareness of the warning signs of deception (many are not so obvious when it’s you who is caught in the cross-hairs of the con); and soften attitudes to fraud victims so that more are prepared to come forward to share their experiences (we all benefit from the extra intelligence) and get the broad support they often need. Such a campaign should draw on the best creative talent and it should extend far beyond the temptingly low-cost realm of websites and social media, to include TV, radio, newspapers and posters. Only once this has been done, and done properly, will it be realistic and fair to expect more from everyone.”
The Panel is also highly critical of fraud policing outside London. “If a fraud victim involves their local police force they quickly find that much fraud policing outside London is no better than in 2005, with little chance of any kind of investigation. The only difference being that victims are now referred to Action Fraud which, in too many cases, does not lead to any substantive law enforcement action.”
The report makes the point that recent years have seen many notable improvements in the UK’s ability to fight fraud, many of them dating back to the Fraud Review, such as Action Fraud, described as the world’s first single-point fraud reporting system. An unintended consequence of Action Fraud has been that too many local police forces no longer feel that fraud is their responsibility, according to the report. Every local force must have the capacity, experience and resources to deal with the victims of fraud and online crime properly, it argues. Some progress has been reversed, such as the National Fraud Authority, disbanded in 2014. Such a body is still needed to sit above the fray, the report says, as it suspects the Government is ‘lurching from one initiative to another’, without continuity of purpose. As for the ‘joint fraud task force’ launched and trumpeted by the Home Office earlier this year, the report fears that it’s reinventing the wheel.
David Kirk said: “Local fraud policing is so important in preventing repeat victimisation and further loss. We need a nationwide fraud policing response that can match the challenge and government should find the resources to create it. It is a national embarrassment that these failings persist a full decade after the Fraud Review.”
As well as a public education campaign and improved local law enforcement, the Fraud Advisory Panel has also called for a new body with strategic oversight for fraud, a government-led fraud indicator and an overhaul of the disclosure regime. Austerity has meant sharp cuts to budgets in almost every area of criminal justice and fraud fighting, the report complains; and most of the criminal justice system problems persist: limited police resources nationwide; few reported frauds investigated; long, drawn-out prosecutions with unpredictable outcomes; too many short sentences; and a poor deal for victims. Even now few frauds are investigated, according to the report. “Police
resources are focused on those involving organised crime gangs or linked to the national security threats from terrorism or cybercrime. Since many of these are committed from abroad, very few perpetrators are brought to justice.” On cyber, the report adds that “by far the greatest setback to the state’s efforts to protect its citizens from fraud has
been the explosion of inexpensive, powerful and portable communications and computing devices connected by cheap, fast networks’. Online fraud simply wasn’t on the Fraud
Review’s radar ten years ago, as the report says. Today the internet has industrialised the way crimes of deception are committed and the radar screen is crowded.”
About the Fraud Advisory Panel
A registered charity, it was established in 1998 by the Institute of Chartered Accountants in England and Wales (ICAEW) which continues to provide support. The Fraud Advisory Panel’s full 22-page report, The Fraud Review: Ten Years On can be found here: https://www.fraudadvisorypanel.org/resources/the-fraud-review-ten-years-on/.
