Fourth Report - Fraud and the Justice System

There is currently an epidemic of fraud in England and Wales. The level of fraud has been increasing year on year and this growth accelerated during the pandemic to an unprecedented level. As the country emerges from the Covid-19 pandemic, … Read more There is currently an epidemic of fraud in England and Wales. The level of fraud has been increasing year on year and this growth accelerated during the pandemic to an unprecedented level. As the country emerges from the Covid-19 pandemic, there are no signs of a reversal in the upward trend. Show less

As the ways in which frauds are being perpetrated change, making increased use of the online sphere and new technologies, the enforcement and prosecution of these crimes also needs to adapt to keep pace with the crimes being conducted.

Fraud is a growing issue and one which does not sit naturally with the other elements of the Minister for Security and Borders extensive portfolio.

Fraud and other forms of economic crime need to sit within a Ministerial portfolio that allows the postholder to prioritise this increasingly important area of work, and who can draw together parts of government and private sector companies to create … Read more Fraud and other forms of economic crime need to sit within a Ministerial portfolio that allows the postholder to prioritise this increasingly important area of work, and who can draw together parts of government and private sector companies to create a unified approach to tackling fraud. This should also be in such a way as will give the issue more publicly visible political and governmental ownership and accountability. (Paragraph 20) Victims Show less

Fraud crimes do not impact victims equally and due to limitations in victim support capacity, efforts to support victims of fraud should be focused on those who need it most. It is therefore vital that responders to these crimes have … Read more Fraud crimes do not impact victims equally and due to limitations in victim support capacity, efforts to support victims of fraud should be focused on those who need it most. It is therefore vital that responders to these crimes have the training and experience required to identify who may need further support and can direct them to services which can provide this aid. Show less

Support available for victims of fraud is patchy and inconsistent. Thirty-seven police forces currently work with victim care units. However this is not compulsory and there is currently no national standard for fraud victim care.

The Government should set a minimum standard of care that a victim of fraud can expect to receive when reporting a crime and ensure that all 43 police forces in England and Wales are working with victim care units to … Read more The Government should set a minimum standard of care that a victim of fraud can expect to receive when reporting a crime and ensure that all 43 police forces in England and Wales are working with victim care units to provide victims with effective support by the end of 2023. Show less

Many victims of fraud find it difficult to know how to report the crime. It needs to be made much clearer to victims how they can report a crime, as the current lack of clarity brings added distress to the … Read more Many victims of fraud find it difficult to know how to report the crime. It needs to be made much clearer to victims how they can report a crime, as the current lack of clarity brings added distress to the process. We acknowledge that increasing awareness of Action Fraud will place increased pressure on the already stretched reporting service, but it is vital that victims feel able to report their crimes both for the individual to feel that they are being listened to, and also to help build a national picture of fraud crimes. (Paragraph 37) 38 Fraud and the Justice System Show less

The Government should increase efforts in advertising Action Fraud to raise public awareness of how to report incidents of fraud.

Individual police forces do not have the capacity to manage the volume of fraud reports made and so it is vital that there is an effective reporting service that is victim-focused and can deal consistently with reports and progress cases … Read more Individual police forces do not have the capacity to manage the volume of fraud reports made and so it is vital that there is an effective reporting service that is victim-focused and can deal consistently with reports and progress cases swiftly to a resolution, all while keeping the victim updated on the actions being taken. Action Fraud has not proved itself to be fit for these purposes and is not sufficiently resourced to meet the growing and varied challenges of fraud. Action Fraud is due to be replaced in 2024; however, victims should not have to wait until then before they begin to see an improvement to the mechanisms for reporting fraud and monitoring the progress of their cases. The Government should take steps now to address these issues. Show less

Although the level of staffing at Action Fraud’s reporting call centre has increased from 75 to 95, this is clearly not sufficient to provide an adequate service to all those reporting a fraud.

Sufficient staffing needs to be put in place to ensure Action Fraud and its successor service can provide a high-quality service to victims, keeping them updated on the progress of their case and directing them to appropriate support services where … Read more Sufficient staffing needs to be put in place to ensure Action Fraud and its successor service can provide a high-quality service to victims, keeping them updated on the progress of their case and directing them to appropriate support services where required. Show less

We welcome the Government’s plans to replace Action Fraud with a new service in 2024; however, we understand from the Government’s evidence to our inquiry that the planned changes are focused on the technology underpinning the service, primarily improving the … Read more We welcome the Government’s plans to replace Action Fraud with a new service in 2024; however, we understand from the Government’s evidence to our inquiry that the planned changes are focused on the technology underpinning the service, primarily improving the analytical tools applied when a crime is reported rather than improving customer experience. While this is an important development, changes to the service also clearly need to bring about improvements in the victim’s experience of reporting a fraud crime. Show less

While we welcome the Government’s commitment to replace Action Fraud with a new service better able to record and disseminate information about a crime, the service also needs to focus on victim experience, ensuring there are trained individuals staffing Action … Read more While we welcome the Government’s commitment to replace Action Fraud with a new service better able to record and disseminate information about a crime, the service also needs to focus on victim experience, ensuring there are trained individuals staffing Action Fraud’s successor who can assess the needs and vulnerabilities of victims and direct them to appropriate resources. Show less

The Government should introduce changes to compensation order legislation to allow for flexibility in altering the order value if a criminal is later found to have assets of greater value which can be used to compensate victims of their crimes. … Read more The Government should introduce changes to compensation order legislation to allow for flexibility in altering the order value if a criminal is later found to have assets of greater value which can be used to compensate victims of their crimes. This would bring practice into line with that already in place for the amendment of confiscation orders to allow for increased asset recovery. Show less

We are wary of placing too great an emphasis on the compensation of victims. We do not want to give criminals carte blanche to commit their crimes just because victims can be reimbursed, since their crimes will continue to have … Read more We are wary of placing too great an emphasis on the compensation of victims. We do not want to give criminals carte blanche to commit their crimes just because victims can be reimbursed, since their crimes will continue to have a significant financial impact on the UK economy, as well as millions of banking customers, even if these losses are not borne by the defrauded individuals directly. The main focus should be on ensuring these crimes are prevented where possible; however, Fraud and the Justice System 39 maximising the recovery of assets for victim compensation should be a priority for investigatory bodies once they become aware of a crime having taken place. (Paragraph 57) Investigating Fraud Show less

Within policing, there are various chains of command when it comes to tackling fraud cases, with investigations being conducted at a local level but with central bodies, namely the City of London Police and the National Economic Crime Centre, having … Read more Within policing, there are various chains of command when it comes to tackling fraud cases, with investigations being conducted at a local level but with central bodies, namely the City of London Police and the National Economic Crime Centre, having responsibility for the overall approach to combatting fraud. This can create confusion and lead to the passing of responsibility for fraud cases between forces and other police organisations. Show less

The Government should ensure agreements are in place between the City of London Police, the National Economic Crime Centre, and local police forces to outline responsibilities in relation to fraud and also highlight the support available to local forces working … Read more The Government should ensure agreements are in place between the City of London Police, the National Economic Crime Centre, and local police forces to outline responsibilities in relation to fraud and also highlight the support available to local forces working within fraud from centralised bodies. Show less

Fraud is not an investigative priority for police forces, partly because it is not a crime type for which forces are held accountable for their performance. Fraud statistics are not included in local and regional performance data despite most of … Read more Fraud is not an investigative priority for police forces, partly because it is not a crime type for which forces are held accountable for their performance. Fraud statistics are not included in local and regional performance data despite most of these crimes still being investigated at the local and regional level. Without this data it is impossible to identify weaknesses in the response to these crimes and boost investigations of fraud crimes. Show less

Fraud should be made a Strategic Policing Requirement to focus effort and resources on combatting this crime type. Additionally, performance data should be collected, monitored, and published at local and regional levels, as is done for other crime types, to … Read more Fraud should be made a Strategic Policing Requirement to focus effort and resources on combatting this crime type. Additionally, performance data should be collected, monitored, and published at local and regional levels, as is done for other crime types, to ensure law enforcement bodies are held accountable for their progress in tackling fraud. Show less

Fraud accounts for more than 40% of all crime yet receives only around 2% of police funding. Out of the 20,000 new police officers being recruited, only 380 are planned to be deployed in the response to fraud. If the … Read more Fraud accounts for more than 40% of all crime yet receives only around 2% of police funding. Out of the 20,000 new police officers being recruited, only 380 are planned to be deployed in the response to fraud. If the Government is serious in its ambition to reduce fraud, it needs to ensure it is allocated sufficient resourcing within police budgets to help identify and prosecute crimes as well as prevent these crimes from occurring. Show less

The Government needs to put in place sufficient funding and police resourcing to bring about a step-change in the response to fraud.

Fraud crimes can be easy to spot in many cases if a police officer has adequate awareness of technological developments, but can be missed in the absence of such knowledge. The training of police remains focused on more traditional crime … Read more Fraud crimes can be easy to spot in many cases if a police officer has adequate awareness of technological developments, but can be missed in the absence of such knowledge. The training of police remains focused on more traditional crime types whereas there is clearly a need for it to keep pace with the changing nature of offending. Show less

The College of Policing should conduct a review of the training offered to front- line staff to ensure it reflects the changing crime landscape and provides a strong foundation in crimes that exploit technology such as fraud. (Paragraph 88) 40 … Read more The College of Policing should conduct a review of the training offered to front- line staff to ensure it reflects the changing crime landscape and provides a strong foundation in crimes that exploit technology such as fraud. (Paragraph 88) 40 Fraud and the Justice System Prosecuting fraud Show less

We have heard compelling proposals for dedicated economic crime courts to ensure there are judges with the right skills to oversee what can often be lengthy and sometimes complex cases. This would also help address the backlog in fraud cases, … Read more We have heard compelling proposals for dedicated economic crime courts to ensure there are judges with the right skills to oversee what can often be lengthy and sometimes complex cases. This would also help address the backlog in fraud cases, which are not always seen as a priority for listing. We support the steps the Government is taking in this direction. Show less

The Government should work with the Judiciary to pilot the establishment of economic crime courts. If the pilots are successful, these types of court should be established around the country to reflect the geographic diversity in the crimes being perpetrated. Read more The Government should work with the Judiciary to pilot the establishment of economic crime courts. If the pilots are successful, these types of court should be established around the country to reflect the geographic diversity in the crimes being perpetrated. Show less

Our inquiry heard of problems with the application of disclosure rules which can result in significant amounts of police and prosecution time being spent redacting and disclosing vast amounts of material that turns out to be unnecessary to the case … Read more Our inquiry heard of problems with the application of disclosure rules which can result in significant amounts of police and prosecution time being spent redacting and disclosing vast amounts of material that turns out to be unnecessary to the case eventually pursued. We are not convinced that the underlying disclosure legislation is the problem but rather there needs to be clearer guidelines on how this legislation should operate in cases with significant amounts of digital material. Show less

The Attorney General should review the current disclosure guidelines and consider whether there is merit in introducing specific guidance on disclosure in fraud cases with large quantities of digital material.

Greater engagement between the police, prosecution and defence has been highlighted as best practice for determining the scope of prosecutions and helping conclude cases in a timely manner. A key barrier to this engagement has been the lack of legal … Read more Greater engagement between the police, prosecution and defence has been highlighted as best practice for determining the scope of prosecutions and helping conclude cases in a timely manner. A key barrier to this engagement has been the lack of legal aid funding, and so we welcome the Government’s recent commitments in relation to ensuring this early engagement is incentivised through the legal aid schemes. Show less

The loss of a comparatively small amount of money can have a greater impact on one individual than the loss of a greater amount on another. The current sentencing guidelines do not recognise this and therefore overlook the emotional and … Read more The loss of a comparatively small amount of money can have a greater impact on one individual than the loss of a greater amount on another. The current sentencing guidelines do not recognise this and therefore overlook the emotional and psychological impact that fraud crimes can have on their victims. Show less

Sentencing guidelines should be amended to give greater consideration to the emotional and psychological harms caused by fraud crimes alongside the financial losses incurred. (Paragraph 122) Disrupting and preventing fraud

Our inquiry has repeatedly heard that 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 to unite … Read more Our inquiry has repeatedly heard that 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 to unite stakeholders around the ambition to reduce fraud. The relaunch of the Joint Fraud Taskforce is a good start, bringing stakeholders together to discuss a common approach to fraud, and the Committee welcomes the intention to produce a new Fraud Action Plan. (Paragraph 132) Fraud and the Justice System 41 Show less

Government should continue to bring together the public and private sectors and ensure that the upcoming Fraud Action Plan sets out its ambition for tackling fraud, how this will be achieved, and the roles and responsibilities each industry has within … Read more Government should continue to bring together the public and private sectors and ensure that the upcoming Fraud Action Plan sets out its ambition for tackling fraud, how this will be achieved, and the roles and responsibilities each industry has within a unified response to fraud. Show less

We acknowledge that telecommunications and tech companies are taking steps to improve their response to fraud, however they remain platforms through which the majority of frauds impacting the general public are conducted. There still appears to be a lack of … Read more We acknowledge that telecommunications and tech companies are taking steps to improve their response to fraud, however they remain platforms through which the majority of frauds impacting the general public are conducted. There still appears to be a lack of engagement on this subject from those sectors, not least amongst the telecommunications companies. Fraudsters may be using increasingly sophisticated technologies and methodologies to conduct their crimes but we are not convinced that the largest companies in those sectors do not have the capabilities to increase their efforts to tackle these changes and prevent frauds, particularly in paid-for- advertising, from appearing on their systems. Fraud may not have a significant impact on the bottom-line of those companies, however they have a duty of care to their users to ensure everything possible is being done to design frauds out of their systems in order to protect the public. Show less

Tech and social media companies have a vital role to play in designing fraud out of their systems to help prevent so many frauds from being conducted online.

The Government should prioritise putting in place 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 by government for their progress … Read more The Government should prioritise putting in place 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 by government for their progress in this respect. Show less

The ‘failure to prevent’ offence for bribery has had success in driving better corporate behaviours. A similar offence for failure to prevent fraud being perpetrated using a company’s platforms would not only aid prosecution for these failures but focus private … Read more The ‘failure to prevent’ offence for bribery has had success in driving better corporate behaviours. A similar offence for failure to prevent fraud being perpetrated using a company’s platforms would not only aid prosecution for these failures but focus private sector effort on designing fraud out of companies’ systems. Show less

A failure to prevent fraud offence should be introduced to hold companies to account for fraud occurring on their systems and encourage better corporate behaviours.

We are concerned to hear that there is a perception that legislation such as GDPR is preventing the sharing of information and intelligence across sectors where frauds were suspected. Data-sharing laws should not restrict the sharing of information for law … Read more We are concerned to hear that there is a perception that legislation such as GDPR is preventing the sharing of information and intelligence across sectors where frauds were suspected. Data-sharing laws should not restrict the sharing of information for law enforcement purposes, or where this information could prevent a fraudster being able to move to a new bank or platform to continue their crimes. Show less

The Government should provide an update of its review of the legislation in respect of the sharing of data with a Specified Anti-Fraud Organisation. The Government should also look more broadly at the operation of data-sharing legislation with regard to … Read more The Government should provide an update of its review of the legislation in respect of the sharing of data with a Specified Anti-Fraud Organisation. The Government should also look more broadly at the operation of data-sharing legislation with regard to the tackling of fraud and bring forward proposals to ensure data can be shared for the purposes of combatting fraud as soon as possible. (Paragraph 155) 42 Fraud and the Justice System Show less

We welcome the opportunity the Online Safety Bill presents to require companies to do more to prevent frauds from being perpetrated on their platforms, and to strengthen the obligations of companies to ensure the safety of their online users.

Key to the prevention of fraud is increasing public awareness of these crimes and the steps people can take to avoid being victimised. Although campaigns are currently run by the Financial Conduct Authority and its partners, these do not have … Read more Key to the prevention of fraud is increasing public awareness of these crimes and the steps people can take to avoid being victimised. Although campaigns are currently run by the Financial Conduct Authority and its partners, these do not have the level of resources required to proliferate messages about fraud and fraud prevention among the general public. The Show less

The Government should plan a national awareness campaign as part of the new Fraud Action Plan, to raise public awareness of fraud and the personal actions people can take to reduce their chances of falling victim to such crimes. (Paragraph … Read more The Government should plan a national awareness campaign as part of the new Fraud Action Plan, to raise public awareness of fraud and the personal actions people can take to reduce their chances of falling victim to such crimes. (Paragraph 163) Fraud and the Justice System 43 Show less