Brian Sims

Government issues Fraud Strategy underpinned by “elite” National Fraud Squad

THE GOVERNMENT’S new Fraud Strategy – issued with the strapline ‘Stopping Scams and Protecting the Public’ – runs to 74 pages and outlines a bold plan to reduce fraud by 10% on 2019 levels before the end of December next year. Further, a new “elite” team of specialist investigators is being formed in order to “turn the tables” on fraudsters.

Fraud is now the most common form of crime in the UK, with one in every 15 members of the population falling victim to scams. Fraud costs an estimated £7 billion per annum and, with developments in modern technology opening up new avenues for criminals to target their victims, nine in every ten Internet users have also encountered online scams at some point.

The Government’s new Fraud Strategy marks a step forward in the ongoing fight against the scammers and is a direct response to how criminality has evolved. New measures will close the routes that scammers use to target their victims, including by banning cold calls on all financial products – such as types of insurance or sham cryptocurrency schemes – and working with Ofcom to use new technology that further clamps down on number ‘spoofing’ such that fraudsters cannot impersonate legitimate UK phone numbers.

Government will move to ban other devices or methods – such as so-called ‘SIM farms’ – commonly harnessed by the scammers to reach thousands of people at once and also review the use of mass texting services to keep these technologies out of the hands of criminals.

In a bid to make it easier for victims to report fraud and rebuild confidence that cases are being dealt with properly, a new system – instigated to replace the current Action Fraud service – will be up-and-running within the year. Underpinned by a £30 million investment, this will provide a simpler route for reporting fraud online, with reduced waiting times and an online portal to allow victims to receive timely updates on the progress of their case.

This improved service will also ensure victims’ reports are acted upon more effectively, using data to continue to build intelligence as the criminals continue to find new ways to target their victims.

National Fraud Squad

The new National Fraud Squad will overhaul how fraud-related crimes are investigated by adopting a proactive and intelligence-led approach to be backed by 400 new specialist investigators. It will work with local forces, international partners and members of the UK’s intelligence community to ensure that “callous fraud cells” target millions of people each day are shut down.

It’s estimated that circa 70% of fraud in the UK either starts overseas or has an international link. To drive forward global efforts that will tackle these crimes, the Government will work bilaterally to raise fraud as a key priority. Home Secretary Suella Braverman is soon to host the first Global Fraud Summit here in the UK to cement international collaboration in tackling the threat.

Prime Minister Rishi Sunak explained: “Scammers ruin lives in seconds, deceiving people in the most despicable ways in order to line their pockets.

We will take the fight to these fraudsters, wherever they try to hide. By blocking scams at source, boosting protections for citizens and bolstering enforcement, we will stop more of these cold-hearted crimes from happening in the first place and make sure justice is done.”

Suella Braverman added: “Fraud is a blight on our nation, with ruthless criminals scamming the British public out of their hard-earned cash. They exploit people’s trust and steal their life savings, shattering their confidence and leaving them feeling vulnerable. Fraud also fuels serious organised crime and terrorism.”

The Home Secretary continued: “The scammers are adapting and taking advantage of new technology to prey on more victims. It’s vital that we adopt a new approach to combat this threat. The Fraud Strategy outlines how we will use all levers available to us – through Government, law enforcement, industry and international partners – to track down the criminals, intercept their scams and bring them to justice.”

Driving collaboration

In order to push the response to fraud at the highest level, a new anti-fraud champion – namely Anthony Browne MP – has been appointed. Browne will draw on his considerable experience as the former CEO of the British Banking Association to drive collaboration with industry and represent the UK on the international stage.

Anthony Browne observed: “Fraud has grown to be the biggest form of crime in the UK, causing financial and emotional distress to millions of people.

The tech sector, phone companies and financial services firms must take responsibility for protecting their users by stopping fraud happening in the first place and work together to design out fraud. We can use the technologies fraudsters are exploiting against them to stop them in their tracks. It’s my intention to work with industry to make sure that happens.”

Banks will be allowed to delay payments from being processed for longer to allow for suspicious payments to be investigated, keeping cash out of the hands of fraudsters and stopping more people from becoming the victims of fraud.

In addition, the Government is working with the largest tech companies to make it as simple as possible to report fraud online, whether it be scam adverts or false celebrity endorsements. Regardless of which social media platform is being accessed by the user, they should be able to find the ‘report’ button within a single click and ‘report fraud or scam’ within another. TikTok and Snapchat already offer this facility for adverts and have committed to extending it to encompass other types of content.

Further measures

Additional measures announced by the Government include:

*rolling out tailored support to victims at a local level across the whole of England and Wales through the National Economic Crime Victim Care Unit

*launching an independent review of the challenges in investigating and prosecuting fraud to speed up the justice process, punishing more scammers and ensuring sentences match the severity of the impact on victims

*deploying the UK’s intelligence community to identify and disrupt more fraudsters overseas

*publishing regular data on the volume of fraudulent content hosted on different websites and platforms to incentivise companies to root these out and better protect users (Government intends to launch a consultation on how best to deliver on this, including regularity of publications)

The plans build on action already taken to step up protections for victims and clamp down on the criminals responsible for these crimes. That action includes:

*legislating to ensure more victims of fraud have their money returned by requiring financial institutions to reimburse the victims of authorised fraud

*making fraud a national priority for police forces to help ramp up the response at the local force level

*investing £400 million for law enforcement to tackle economic crime, including fraud, over the next three years

*new duties placed on tech companies through the Online Safety Bill to put systems in place that tackle scams on their platforms and publish annual transparency reports on their work aimed at tackling online harms

Graeme Biggar, director general of the National Crime Agency, commented: “The National Crime Agency welcomes the new Fraud Strategy and our role in the National Fraud Squad. Through the National Economic Crime Centre, we will drive a proactive and intelligence-led response, holding fraudsters to account and protecting the public from criminals who operate increasingly online and overseas. We want fraudsters to feel the same vulnerability they inflict upon their victims as we target their infrastructure, expose their identities and bring them to justice.”

Commissioner Angela McLaren from the City of London Police, which is the national lead force for fraud, responded: “We welcome this strategy and the much-needed investment in policing to deliver against it. Tackling fraud requires a collective effort. That being so, we will continue to work with our partners across law enforcement and industry, doing everything in our power to pursue the fraudsters and reduce the devastating harm they cause.”

Response from Cifas

Cifas, the UK’s leading fraud prevention service, has also welcomed the launch of the Home Office’s Fraud Strategy.

The investment in additional policing resource will support the inclusion of fraud within the recently announced Strategic Policing Requirement. Although policing resource for fraud investigation will remain low relative to the scale of the problem and the harms realised by this form of crime, Cifas believes the Government’s plans are “very much a step in the right direction”.

According to Cifas, the continuing gap between policing resource and the size of the fraud problem does necessitate a range of innovative responses from policing in collaboration with trusted partners. Critical to this will be delivering on secure and legal data sharing by law enforcement to empower industry and wider partners to stop and block frauds in line with the aims of the new strategy.

Mike Haley, CEO of Cifas, said: “Following on from the recent publication of the Economic Crime Plan, the new strategy and appointment of Anthony Browne in the role of anti-fraud champion represents a strong commitment to upping the law enforcement and Government response to fraud and financial crime. The additional investment in policing resource is good news, but remains dwarfed by an ever-growing range of fraud threats.”

Haley concluded: “We welcome the further commitment to share law enforcement data with industry and, through this, better protect the public and businesses from fraud and its many harms. This commitment must be delivered upon such that we take the fight to the fraudsters.”

Concerns raised

Experts from the Royal United Service’s Institute’s (RUSI) Centre for Financial Crime and Security Studies have also welcomed the UK’s new Fraud Strategy. However, they also raise concerns about under-funding and the lack of a bolder policing reform plan.

The National Crime Agency estimates that fraud losses in the UK may be as high as £190 billion per annum. This includes £40 billion in the UK public sector, a figure roughly equivalent to the UK’s annual defence budget. In recognition of this, the UK Government reclassified fraud as a threat to national security back in February. 

RUSI’s experts have highlighted “concerning gaps” in the Government’s response, which may reduce its practical impact.

Policing reform According to RUSI, the strategy “lacks a vision” for reforming the policing response and allocates only 400 new officers to the effort. Although the staffing uplift is welcome, it does not boost resource allocation above the current 1% of police resources allocated to fraud. 

Role of social media and tech companies The measures advocated in the strategy to reduce the outsized role played by social media and tech companies in facilitating fraud and scams are voluntary and “do not go far enough”. 

Sustainable resourcing of the response The long-term funding of fraud reform is “uncertain and potentially unsustainable” beyond the current spending round, while there is no plan to increase funding in the future. 

Helena Wood, Senior Research Fellow at the Centre for Financial Crime and Security Studies and co-head of RUSI’s UK Economic Crime Programme, said: “Fraud ruins the lives of millions of people in the UK, yet the Government has repeatedly failed to include fraud statistics in its estimations of crime levels. When included, crime is clearly rising and not falling. Although the new strategy includes extra resources for policing fraud, the levels are not commensurate with the scale of the threat. They are certainly not enough to turn around decades of underinvestment in the enforcement response to the crime that affects more UK citizens than any other.”

Kathryn Westmore, also a Senior Research Fellow at the Centre for Financial Crime and Security Studies and co-head of RUSI’s UK Economic Crime Programme alongside Helena Wood, added: “The current epidemic of fraud continues to exert a hugely damaging effect on the UK’s economy. It’s clear that certain sectors, notably so the technology and telecoms sectors, need to up their game in the fight against fraud. More needs to be done to incentivise these sectors to commit more resources to fighting fraud, perhaps through the introduction of a new fraud levy. Without this, it’s difficult to see how the Government will meet its ambitious targets for cutting fraud.”

Epidemic levels

Wayne Stevens, national fraud lead at the charity Victim Support, observed: “Fraud has reached epidemic levels. Over the past five years, the number of fraud victims we’ve supported has more than doubled, including many whose lives have been turned upside down.”

Stevens went on to state: “It’s encouraging to see the Government’s commitment to reduce fraud. The pledge to reimburse all victims is something we have long been calling for and will make a real difference to those affected. However, we would like to see the Government be more ambitious.”

In conclusion, Stevens said: “The aim of reducing fraud by 10% only scratches the surface, while there is a glaring lack of funding to support those who do fall victim to fraud. Thousands more people will need ongoing support over weeks and sometimes months as they come to terms with the impacts of losing life-changing sums of money.”

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