This article was authored by Francesca Riley, Trainee Solicitor, Manchester.
The Justice Committee has recently published a report putting pressure on the government to make general and extensive change to every aspect of how fraud offences are dealt with.
The report highlights some of the problems in the current system, such as:
- Fraud offences account for 40% of all crime committed in the UK but only 2% of police funding is dedicated to combatting it.
- An estimated 4.6 million fraud offences take place each year however only 7,607 defendants were prosecuted for fraud in 2021.
If the approach to fraud is not revolutionised now, the report estimates a further 25% growth in these crimes.
There is a huge disparity in the amount of fraud offences there are to investigate, and the resources allocated to it.
- Out of over 800,000 reports made to ActionFraud and Cifas in 2020/2021, only 7% of them were investigated further.
- Out of 20,000 additional police officers to be recruited by 2023, less than 2% of them will be dedicated fraud officers.
Additionally, fraud statistics are collected centrally by ActionFraud as opposed to regionally from police forces as with other crimes. This means it is not possible to accurately obtain localised data to allow for monitoring. This results in fraud offences not being prioritised by forces, who remain under-resourced, as they are not held accountable for it.
While 84.9% of fraud cases result in a conviction, the cases that actually reach trial account for 0.75% of those reported each year.
The cases pursued by the CPS are limited to those which have been investigated by the police who, as stated earlier, are facing issues with a lack of prioritisation and resources. The amount of disclosure involved in a fraud case often means they are resource heavy.
The justice system, in its current form, is “ill-equipped” in the fight against fraud. 75% of fraud crimes prosecuted by the CPS have an international element.
The societal shift, caused by COVID-19, to an increased reliance on online technology has inadvertently created an environment where criminals are able to commit fraud “at scale with ease, speed and anonymity”. The risk to individuals is further increased by the fact that cyber-crimes can be perpetrated against UK nationals from anywhere in the world.
The Justice Committee stress the need for a system of prevention and enforcement that is as resilient and adaptable as the perpetrators. Other recommendations aim to provide more comprehensive support to victims through the reinvention of ActionFraud, create specific economic courts for fraud cases to be heard in and allocating sufficient funding and resourcing for police. The committee are showing their commitment to combatting fraud by continuing their investigation by interviewing senior members of the National Crime Agency and Home Office as well as issuing a call for evidence to the general public
The report serves as a warning to the government of the current landscape of the fraud system and how it is vital that action is taken to enact widespread change immediately or the country will continue to see an exponential increase in fraud cases.
The Fundamentally Honest view
History tells us that it is inevitable that fraud will increase if, as predicted, the UK falls into recession shortly. In the absence of significance change, fraudsters will be able to continue to operate largely with impunity.
In the meantime, those of us engaged in the detection and prevention of fraud will need to do our part to disincentive fraud by ensuring it does not pay. The insurance industry has long shouldered the burden of tackling insurance fraud, for example setting up and funding IFED in collaboration with the City of London Police (the history of which we explored in our earlier blog article).
With significant reform and investment unlikely to be forthcoming in the short-term at least, the industry will have to continue to look within to protect its customers from fraud.