The criminal justice system’s current approach to penalising and sentencing fraudsters is insufficient to prevent the UK being seen as a haven for fraudsters. Under the current system, law enforcement organisations can often spend longer investigating frauds than criminals receive as a sentence for their crime. This can have a negative impact on police morale. For crimes where the financial loss is less than £5,000, the maximum penalty is one year’s custody. Yet the majority of those found guilty receive a fine or community order. The Department acknowledges that the maximum sentence available for fraud, of up to 10 years imprisonment, is only used very rarely and needs to be used more. However, effective deterrence is not just about the length of a potential sentence, but also the likelihood of being caught. This is a major problem as less than 1% of around 900,000 frauds reported in England and Wales each year result in an offender being charged or prosecuted for the crime. The Justice Committee’s report Fraud and the Justice System, examined in depth how the criminal justice system is set up to tackle fraud.1 It makes 16 recommendations aimed at strengthening the response to fraud, including that sentencing guidelines should be amended to give greater consideration to the emotional and psychological harms caused by fraud crimes alongside the financial losses incurred. At the time of our evidence session, the Department had not yet responded to the recommendations in 1 Justice Committee, Fourth Report of Session 2022–23, Fraud and the Justice System, HC 12 Progress combatting fraud 7 the report, but this was subsequently published in January 2023. While Government recognised many of the issues raised by the Committee, its actions to address these are a work in progress. Recommendation 5: The Department should work with partners in government to address the recommendations of the Justice Committee’s report Fraud and the Justice System.