UK launches new anti-fraud strategy

The Online Crime Centre will launch in April, uniting specialists from the UK government, police, intelligence agencies, banks, technology platforms and mobile networks in a co-ordinated joint venture aimed, initially, at high volume cyber-crimes and fraud.

The move comes as part of a new £250million anti-fraud strategy launched by the government aimed at tackling fraud, addressing victim vulnerabilities to improve resilience and strengthening enforcement.

Tom Stocker, a corporate crime expert with Pinsent Masons, said that while the aims of the new proposals are to be applauded, and outline an ambitious plan, their success will depend on the detail, much of which is still awaited.

“The detail will matter in ensuring the government makes good on its renewed commitment to tackle economic crime, but there is clear political will to improve the UK's response to fraud”. 

Focused around disrupting networks, safeguarding and response, the strategy outlines the government’s approach to tackling fraud over the next three years. Investing in early intervention is a significant element of the proposals for disruption.

This includes is the £30 million Online Crime Centre which will share intelligence between agencies to identify organised crime accounts, websites and phone numbers to block them at scale.  It comes as figures show as many as a quarter of UK businesses have been the victim of fraud.

The plans make a commitment to expand and improve enforcement and the tools available to the regulators.  New civil law enforcement tools pilots are planned, along with a commitment to consider the introduction of civil penalties for fraud and money laundering as an alternative to criminal prosecution.

Disclosure will be modernised and there will also be more judge-led trials for complex fraud cases to reduce delays in bringing them to court.

Melanie Ryan, a financial crime expert with Pinsent Masons, said the proposals on civil penalties would align with other, similar regulatory moves elsewhere.

“The potential for civil enforcement is interesting and reflects similar developments in other regulatory areas,” she explained.

“In particular, the introduction of civil penalties would align with the approach taken in tax fraud where civil penalties and compound settlements are a principal tool used by HMRC to address various types of tax fraud, customs and duties offences.  For organisations, it also signals a more active approach to enforcement”

“The lower burden of proof required for civil enforcement may ease some of the evidential challenges complex fraud trials can pose.  As a result, organisations may face greater enforcement risk.  But questions remain, for example, around procedural safeguards and resourcing of the proposals.”

David McIlwaine, a cyber expert with Pinsent Masons added the strategy recognises that most fraud is now cyber-enabled, cross-border and technology driven. 

“A central strength of the strategy is its focus on cutting off fraud “at source”, rather than relying mainly on post-incident investigation,” he said.

“By specifically targeting telecoms, platforms and financial flows, the strategy tackles the technology enablers, not just the criminals.”

Alongside this and signalling its support and promotion of international initiatives to tackle fraud, the government is to sponsor the Global Fraud Summit this year.  International cooperation is seen as a key measure in the fight against economic crime more generally and fraud, in particular.

Particular vulnerabilities identified in telecommunications, online and financial services mean that there will also be increased collaboration with those sectors to deliver interventions and drive improvements.  Organisations in those sectors can expect increased regulatory activity.

The Home Office is also to develop new business-funded units providing expertise and support for organisations in the sectors most affected by fraud, starting with retail.  It will also work with law enforcement and industry bodies to define an economic crime ‘profession’ – enabling better recruitment of specialists in the field.

James Babbage, threats director general with the National Crime Agency, said the new approach was part of the body’s move to strengthen its response to Fraud.

He added: “However, the threat will continue to grow globally, and the launch of the Fraud Strategy provides the basis for a further step change in our collective work to protect the UK public from these criminals.

“We have worked intensively with partners to pilot a range of new approaches to fraud and cyber crime: sharing data, stopping and blocking more online crime at source, and helping to design out vulnerabilities through more resilient industry processes.”