Source · Select Committees · Justice Committee
Fourth Report - Fraud and the Justice System
Justice Committee
HC 12
Published 18 October 2022
Recommendations
7
Deferred
Para 31
Set minimum standard of care for fraud victims across all police forces by 2023.
Recommendation
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 …
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Government Response Summary
The government deflected the recommendation about victim care standards, acknowledging an issue regarding increasing compensation orders in confiscation proceedings and stating it would consider legislative reforms based on a Law Commission review.
Ministry of Justice
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9
Deferred
Para 37
Increase advertising efforts for Action Fraud to raise public reporting awareness.
Recommendation
The Government should increase efforts in advertising Action Fraud to raise public awareness of how to report incidents of fraud.
Government Response Summary
The government deflected the recommendation to increase Action Fraud advertising, discussing the Strategic Policing Requirement (SPR) and hoping a revised SPR will strengthen fraud capabilities, while also referencing available fraud data.
Ministry of Justice
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10
Accepted
Para 42
Implement immediate steps to improve fraud reporting mechanisms and case progression for victims.
Recommendation
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 …
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Government Response Summary
The government committed £400 million over three years to tackle economic crime, dedicating 725 Police Uplift Programme posts to serious organised crime, and expanding fraud investigation teams across all Regional Organised Crime Units (ROCUs).
Ministry of Justice
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15
Acknowledged
Para 52
Introduce legislative changes to allow flexible compensation order value adjustments for victims.
Recommendation
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. …
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Government Response Summary
The government did not commit to specific changes in compensation order legislation but outlined its agreement on a unified response to fraud and stated it will shortly publish a new strategy detailing efforts to stop fraud, empower victims, and prosecute fraudsters.
Ministry of Justice
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18
Deferred
Para 64
Ensure agreements define fraud responsibilities and support between police forces and central bodies.
Recommendation
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 …
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Government Response Summary
The government's response focused on measures to facilitate data sharing between businesses for preventing economic crime through new legislation, rather than outlining agreements between policing bodies on responsibilities for fraud cases.
Ministry of Justice
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20
Deferred
Para 74
Fraud currently lacks Strategic Policing Requirement status and comprehensive performance data publication.
Recommendation
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 …
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Government Response Summary
For the Strategic Policing Requirement (SPR), the government acknowledges the need for stronger fraud capabilities and states ministers are currently considering a revised SPR. Regarding performance data, it points to existing collection and publication on the Action Fraud website and the NFIB dashboard.
Ministry of Justice
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21
Accepted
Para 82
Fraud receives disproportionately low police funding and officer allocation despite prevalence.
Recommendation
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 …
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Government Response Summary
The government accepts the need for sufficient resourcing, allocating £400 million over three years for economic crime and dedicating 725 police uplift posts to serious organised crime including fraud. It is also expanding fraud investigation teams across all Regional Organised Crime Units and increasing capacity in CoLP and the NCA.
Ministry of Justice
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22
Accepted
Para 82
Government funding and police resourcing for fraud response remain insufficient.
Recommendation
The Government needs to put in place sufficient funding and police resourcing to bring about a step-change in the response to fraud.
Government Response Summary
The government accepts the need for a step-change in resourcing, allocating £400 million over three years for economic crime and dedicating 725 police uplift posts to serious organised crime including fraud. It is also expanding fraud investigation teams across all Regional Organised Crime Units and increasing capacity in CoLP and the NCA.
Ministry of Justice
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24
Acknowledged
Police training needs review to reflect evolving technology-exploiting crime landscape.
Recommendation
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 …
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Government Response Summary
The government is supportive of the College of Policing's (CoP) desire for high standards of learning and notes CoP is already working with City of London Police to review policing arrangements for fraud. It acknowledges more work is needed and continues to support CoP's collaborative plans, while detailing current training provisions.
Ministry of Justice
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26
Accepted in Part
Para 101
Pilot establishment of dedicated economic crime courts in collaboration with the Judiciary.
Recommendation
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.
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Government Response Summary
The government rejects piloting economic crime courts nationally due to capacity concerns but highlights the planned City of London Law courts, opening in 2026, which are expected to focus on high-level fraud, cyber, and economic crime.
Ministry of Justice
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27
Acknowledged
Para 109
Application of disclosure rules is problematic in digital fraud cases, requiring clearer guidelines.
Recommendation
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 …
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Government Response Summary
The government acknowledges the complexity of disclosure, particularly with digital material, noting past revisions to guidelines and ongoing work. It states the forthcoming fraud strategy will detail aims for the disclosure regime in complex fraud cases.
Ministry of Justice
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28
Deferred
Para 109
Review current disclosure guidelines to introduce specific guidance for digital fraud cases.
Recommendation
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.
Government Response Summary
The government acknowledges the complexity of disclosure, noting past reviews and revisions to guidelines. It states that future work may be needed for complex crime and confirms that the forthcoming fraud strategy will detail its aim to ensure the disclosure regime meets the needs of complex fraud cases.
Ministry of Justice
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31
Deferred
Sentencing guidelines require amendment to consider emotional and psychological harms of fraud.
Recommendation
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
Government Response Summary
The government states that the independent Sentencing Council is responsible for developing sentencing guidelines and confirms it has shared the report with them for their consideration.
Ministry of Justice
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33
Accepted
Para 133
Upcoming Fraud Action Plan needs clear roles for public and private sectors.
Recommendation
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 …
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Government Response Summary
The government agrees on the need for a unified public and private sector response to fraud, citing ongoing collaboration through the Joint Fraud Taskforce. It commits to shortly publishing a new strategy that will detail its ambitions, methods, and partnership approach to combatting fraud.
Ministry of Justice
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34
Accepted
Para 137
Tech and telecom companies show insufficient engagement preventing fraud on their platforms.
Recommendation
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 …
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Government Response Summary
The government agrees with the recommendation and intends to launch a tech and online charter with industry next year to drive down fraud and improve collaboration, with further details in the upcoming Fraud Strategy.
Ministry of Justice
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36
Accepted
Para 138
Establish charters with social media and tech companies to ensure fraud accountability.
Recommendation
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 …
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Government Response Summary
The government agrees with the recommendation and confirms the Home Office intends to launch a tech and online charter with industry next year. This charter will include public and private actions to tackle fraud and will be further outlined in the upcoming Fraud Strategy.
Ministry of Justice
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38
Accepted in Part
Para 146
A 'failure to prevent fraud' offence could hold companies accountable for platform fraud.
Recommendation
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.
Government Response Summary
The government is actively considering the Law Commission's review on corporate criminal liability, including the creation of a failure to prevent fraud offence. Separately, the Online Safety Bill will introduce a duty for social media and search engine companies to implement systems to prevent fraud on their platforms.
Ministry of Justice
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39
Accepted in Part
Para 154
Concern exists regarding perceived GDPR restrictions on data sharing for fraud prevention.
Recommendation
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 …
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Government Response Summary
The government is taking steps to support information sharing for economic crime prevention through the Data Protection and Digital Information Bill, which will provide greater assurance for sharing under GDPR, and the Economic Crime and Corporate Transparency Bill, which will enable easier sharing by disapplying civil liability. It continues to consider the SAO regime.
Ministry of Justice
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40
Accepted in Part
Provide update and proposals to broaden data sharing for effective fraud combatting.
Recommendation
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 …
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Government Response Summary
The government is supporting data sharing for economic crime prevention through the Data Protection and Digital Information Bill and the Economic Crime and Corporate Transparency Bill, which aim to ease information sharing and disapply civil liability. It continues to consider next steps for the Specified Anti-Fraud Organisation regime.
Ministry of Justice
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43
Accepted
Plan a national awareness campaign to raise public awareness of fraud prevention measures.
Recommendation
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 …
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Government Response Summary
The government acknowledges the importance of public awareness for fraud, stating it will be a key part of the forthcoming fraud strategy and mentioning a new public engagement team. However, it primarily highlights numerous existing awareness campaigns already run by various organisations and states it continues to support these.
Ministry of Justice
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Conclusions (23)
1
Conclusion
Accepted
Para 9
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 …
Government Response Summary
The government states that tackling fraud is a priority, with the Security Minister providing leadership and oversight, and highlights the successful relaunch of the Joint Fraud Taskforce to combat fraud.
2
Conclusion
Deferred
Para 12
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.
Government Response Summary
The government focused on victim support rather than adapting enforcement/prosecution, committing to expanding National Economic Crime Victim Care Units (NECVCU) across England and Wales from 2023, with specific force coverage targets by April 2023.
3
Conclusion
Deferred
Para 20
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.
Government Response Summary
The government described Action Fraud's 2022 campaign activities and stated it would set out further details of its approach in an upcoming fraud strategy, rather than addressing the ministerial portfolio.
4
Conclusion
Deferred
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 …
Government Response Summary
The government deflected the recommendation about ministerial portfolio, committing instead £30 million over three years to upgrade Action Fraud, replacing it in 2024, and launching a new reporting tool and website in 2023.
5
Conclusion
Acknowledged
Para 27
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 …
Government Response Summary
The government committed to improving call centre capacity with new suppliers, launching a new reporting tool and website next year, and implementing automated SMS and a chatbot to ease reporting, but did not specify how support would be targeted to the most vulnerable.
6
Conclusion
Acknowledged
Para 31
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.
Government Response Summary
The government agreed victims need support and allocated £30 million for Action Fraud upgrades, aiming to refresh the service by 2024 with a new reporting tool in 2023, but did not commit to a national standard for victim care or all 43 forces working with units by end of 2023.
8
Conclusion
Deferred
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 …
Government Response Summary
The government deflected the recommendation about making reporting clearer to victims, explaining existing inter-organisational structures for tackling fraud and stating further details would be included in its upcoming Fraud Strategy.
11
Conclusion
Deferred
Para 43
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.
Government Response Summary
The government deflected the recommendation about Action Fraud call centre staffing, focusing instead on police professional training and development for fraud investigation, outlining existing training programs and support for the College of Policing.
12
Conclusion
Deferred
Para 43
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.
Government Response Summary
The government did not commit to specific staffing for Action Fraud or its successor service's victim updates, instead highlighting broader efforts to improve overall court efficiency, recruit judges, and construct new courts, including one expected to focus on economic crime by 2026.
13
Conclusion
Deferred
Para 48
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 …
Government Response Summary
The government's response discussed reforms to the disclosure regime in the criminal justice system and the Attorney General's guidelines, rather than addressing improvements to the customer experience of Action Fraud's replacement service.
14
Conclusion
Deferred
Para 49
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 …
Government Response Summary
The government deflected the recommendation, stating that the independent Sentencing Council is responsible for sentencing guidelines and that the report has been shared with them, without addressing staffing or victim support for Action Fraud's successor service.
16
Conclusion
Accepted
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 …
Government Response Summary
The government agreed on the importance of further charters and committed to the Home Office launching a tech and online charter with industry next year to drive down fraud and improve collaborative working.
17
Conclusion
Deferred
Para 63
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 …
Government Response Summary
The government's response addressed corporate criminal liability and the Online Safety Bill, which are unrelated to the committee's observation about confusion in policing chains of command for fraud cases.
19
Conclusion
Deferred
Para 73
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 …
Government Response Summary
The government's response focused on raising public awareness on fraud through a forthcoming strategy and a new public engagement team, rather than addressing fraud as an investigative priority for police or the inclusion of fraud statistics in performance data.
23
Conclusion
Accepted
Para 88
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 …
Government Response Summary
The government supports the College of Policing's (CoP) efforts to ensure police professionals have access to appropriate training for fraud, detailing existing training programmes and ongoing reviews with the City of London Police.
25
Conclusion
Accepted
Para 101
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. …
Government Response Summary
The government recognises the impact of delays and clarifies that dedicated courts alone would not increase capacity. However, it confirms the planned construction of the City of London Law courts, opening in 2026, which is expected to focus on high-level fraud, cyber, and economic crime cases.
29
Conclusion
Not Addressed
Para 116
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 …
Government Response Summary
The government agrees that victims of fraud need support and advice and will work with the City of London Police to expand National Economic Crime Victim Care Units across England and Wales from 2023 for victims whose cases are not investigated by the police.
30
Conclusion
Deferred
Para 122
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.
Government Response Summary
The government states that the independent Sentencing Council is responsible for developing sentencing guidelines and confirms it has shared the report with the Office of the Sentencing Council for their consideration.
32
Conclusion
Accepted
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 …
Government Response Summary
The government agrees on the need for a unified public and private sector response to fraud and will shortly publish a new strategy detailing how it will stop fraud attempts, empower victims, and prosecute fraudsters through collaboration with various partners.
35
Conclusion
Accepted
Para 138
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.
Government Response Summary
The government agrees with the vital role of tech and social media companies in preventing online fraud. It intends for the Home Office to launch a tech and online charter with industry next year, outlining public and private actions to drive down fraud in these sectors.
37
Conclusion
Acknowledged
Para 146
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.
Government Response Summary
The government recognises the limitations of current corporate criminal liability laws and is considering the Law Commission’s paper from June 2022 to strengthen the law, including the creation of a 'failure to prevent fraud' offence. It also highlights the Online Safety Bill's new duty on companies to prevent fraud on their platforms.
41
Conclusion
Accepted
Para 158
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.
Government Response Summary
The government confirms the Online Safety Bill will, for the first time, create a duty on social media and search engine companies to implement systems and processes to prevent fraud on their platforms, with Ofcom having extensive enforcement powers.
42
Conclusion
Accepted
Para 163
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 …
Government Response Summary
The government recognises the importance of raising public awareness for fraud prevention, which will be a key part of its forthcoming fraud strategy. It has established a new public engagement team at the NECC/NCA to coordinate anti-fraud communications across sectors and improve messaging, in addition to existing campaigns.