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'Better data' on cyber crime recovery rates needed following inclusion in official crime stats, says expert

Out-Law News | 19 Oct 2015 | 2:48 pm | 2 min. read

Official crime figures for England and Wales, which now incorporate online fraud and cyber crimes, will not show the full extent of the problem until they incorporate an idea of the amount that victims actually recover when compared to the amount that they lost, an expert has said.

According to the recently-published Crime Survey for England and Wales (CSEW), an estimated 3.8 million people experienced some form of online fraud in the year ending June 2015. The survey also found that in cases where a loss was reported, 78% of the victims received some form of compensation while 62% were reimbursed in full.

However both asset recovery expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law.com, and the City of London Police, said that the recovery figures were unlikely to reflect the work of law enforcement. The CSEW, which is updated quarterly and published by the Office for National Statistics (ONS), reflects the public's experience of crime rather than the number of crimes reported to the police.

In many cases, fraud victims are reimbursed by their bank or credit card provider and do not report the incident to the police, according to the City of London Police, which operates national fraud reporting service Action Fraud. It said that there was a "vast difference" between the 406,935 reports to Action Fraud in 2014 and the "millions evidenced" in the ONS survey.

"This hampers law enforcement's ability to investigate, prosecute or prevent further crimes being committed against victims and prioritise it against other crime types," the City of London Police said in a blog post on its website.

"Greater reporting in this area would enable us to close down the websites, phone lines and bank accounts that enable criminals to operate … [W]ith the cost of fraud to the UK economy estimated at £30 billion more needs to be done and more resources are needed to assist law enforcement to help victims of crime and prevent further victimisation," it said.

"It is interesting to see that in 78% of cases, the victims of fraud and cybercrime received some form of financial compensation," said Alan Sheeley. "Yet the effectiveness of these recoveries need to be considered in the context of the victims' total level of losses and the ultimate amount they recover. A greater effort should be made to collate and publish data regarding these additional figures. A clearer understanding of how much victims actually recover, when compared to the amount they lost, will enable members of the public to truly appreciate the effectiveness of law enforcement agencies."

"On the same note, it will be interesting to obtain a better understanding of the extent to which law enforcement agencies played a role in the reimbursement of victim losses. I suspect that a large percentage of the sums reimbursed to victims have come from the financial institutions the individual's bank with rather than through a successful recovery by law enforcement agencies from the fraudsters," he said.

The ONS report showed an 8% drop in the number of incidents of 'traditional' crime against households and adults in England and Wales since the previous year's survey, mostly driven by a reduction in reported thefts. At the same time, the number of crimes recorded by the police increased by 5%, which the ONS said was due to "improved compliance with national recording standards" by police forces in England and Wales.

The survey recorded around 6.5 million incidents of 'traditional' crime, alongside around 5.1 million incidents of online fraud. Writing on the City of London Police website, commissioner Adrian Leppard said that the figures showed that technology was "changing the face of crime in the UK".

"The prevention of these crimes cannot simply rest with government, banks and other bodies which make up 'the centre'," he said. "The efforts of officers and staff who deal with businesses and members of the public are crucial to the fight. We believe that the vast majority of fraud and cyber crimes are preventable, if people have the right information ... Although many of these issues are new to some people, none of them are particularly complicated."

The City of London Police is currently working with the Home Office on plans for a new 'Fraud Taskforce', which will incorporate the knowledge of UK businesses into the government and law enforcement's responses to cyber crime, according to its website.