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Report highlights 'same failings' in fight against fraud 10 years on

Out-Law News | 11 Jul 2016 | 10:07 am | 3 min. read

Official action to tackle fraud, and public knowledge of the biggest threats, remains patchy a decade on from a government-backed review, according to a new report.

Anti-fraud charity the Fraud Advisory Panel (FAP) was particularly critical of the support available from the police to victims of fraud outside of London. Although they could now be referred to the UK's national fraud and cyber crime reporting centre, Action Fraud, there was "little chance" that their reports would be followed up with any kind of substantive law enforcement action, according to the report (22-page / 312KB PDF).

"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," said FAP chair David Kirk. "Meanwhile, little is done to help people understand the dangers of fraud and what they can do to protect themselves."

"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," he said.

Alan Sheeley, head of civil fraud and asset recovery at Pinsent Masons, the law firm behind Out-Law.com, said that the UK was "clearly losing in the battle" against fraudsters on the evidence of the report.

"The simple question asked by FAP is: is the UK doing enough?" he said. "Clearly, if fraudulent activity levels have increased in the last 10 years from £52 billion to £193bn the answer is an emphatic 'no'. Further, this figure must also be taken with a pinch of salt, since as the former commissioner of the City of London Police, Adrian Leppard, has said, only 1 in 12 such crimes are actually reported."

"The UK is failing victims. As the report states, it is not good enough to leave things to Action Fraud where there will be no hope of an investigation ever being conducted or a fraudster being convicted. It is particularly worrying that the City of London Police's national coordinator for economic crime is quoted as saying that the authorities should not be seen as a money recovery agency. From a victim's point of view, a conviction is a part of justice - however, really victims just want their money back. If the UK cannot rely on the authorities to do this, then the criminals are winning," he said.

The 2006 fraud review, led by then attorney general Lord Goldsmith, uncovered a "fraudsters' paradise", with an "unacceptably small chance" that a fraudster would be prosecuted, according to FAP's report. This was the result of a combination of lack of public understanding, no national anti-fraud policy, limited state resources and weaknesses in the prosecutorial and judicial processes in the event that a fraudster was to be prosecuted, FAP said.

Although the review, which made 62 recommendations for improvement, promised a "sea change in official attitudes to fraud", FAP said that many of these issues continued to exist. At the same time, the improvements that had been introduced too often became the victims of "policy change and cost-cutting", according to its report.

FAP has recommended five 'steps' for the government to take forward, and to feed into the work of the newly-established 'joint fraud task force'. These include a "well-funded and sustained" public awareness campaign; the creation of a new body with "strategic oversight" of the UK's anti-fraud initiatives; a government-led, five-yearly fraud "census" to provide a "broad indication" of the scale and direction needed of anti-fraud policy; improved local law enforcement response; and a better disclosure regime.

Sheeley said that these recommendations would need "a great deal of funding and parliamentary support".

"The biggest issue identified in the report is not only the lack of funding to fight crime in the last 10 years, but an actual cut back in funding," he said.

"With Brexit, and all the distractions this will bring, I do not hold much faith in this changing in the next 10 years. But without these measures, the only change will be an increase in fraud: based on a circa 400% increase in the last 10 years we could be looking at the financial impact of fraud breaking the £800bn mark," he said.

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