Select committee inquiry
Progress combatting fraud
Closed
What the inquiry looked at
“Fraud against both businesses and individuals is a serious and growing problem in the UK. The Home Office and the National Crime Agency (NCA) are responsible for delivering many of the government’s objectives on combatting fraud. The Home Office is also developing a new Fraud Action Plan. The Committee will question senior officials at the Home Office and National Crime Agency as well as Angela McLaren, Commissioner of the City of London Police, on the effectiveness of the government’s activity to combat fraud. This includes: the government’s level of understanding of the scale and threat of fraud; government’s response to date and how appropriate this is to the threat; and how effective the Home Office’s future plans are likely to be. If you have evidence on these issues including the findings of the NAO report underlying this inquiry and call for evidence , please submit here by Sunday 20 November at 18:00.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of Forty-Third Report - Progress combatting fraud ↗
Fraud against businesses and individuals is a significant and growing problem. Since we last looked at this issue in 2017, fraud appears to have been everyone’s problem but no-one’s priority. Combatting fraud is ultimately the responsibility of the Home Office.
Fraud now accounts for 41% of all crimes committed in England and Wales, with 3.8 million incidents of actual or attempted fraud in the year to June 2022. We are deeply disappointed in the slow progress made by government in the last five years. Many of the same issues remain and there is still no sign that government has a grip on fraud or an adequate strategy to address it. Meanwhile, victims of fraud are left to pay the price. The Home Office’s most recent estimate of the cost of fraud to individuals is £4.7 billion, and it still cannot quantify the potential cost of fraud to businesses. Becoming a victim of fraud can be deeply distressing for many people and in some cases can cause lasting psychological damage. We are concerned that victims feel lost in the system, with poor communication leading to missed opportunities to prevent further harm and potentially undermining public trust in law enforcement.
Law enforcement is not set up to tackle the challenges presented by fraud. The volume and complexity of fraud currently overwhelms the capacity of both Action Fraud and local police forces, who lack the training and resources they need to pursue the hundreds of thousands of cases reported every year. We are also concerned that police morale is being undermined by the time it takes to investigate and prosecute fraud and the relatively short sentences handed out when prosecutions are successful.
The Home Office is not doing enough to influence those who are instrumental in combatting fraud. The Department is dependent on the banking, technology, telecoms and retail sectors to fight fraud, but its approach will continue to be sluggish and outmanoeuvred if it relies on purely voluntary charters with these sectors. The majority of frauds are also suspected to have an international element, but relationships with overseas criminal justice agencies are immature and threatened by the UK’s lack of domestic capacity.
We are disappointed given the pervasive and damaging effects of fraud on business, individuals, and society that the Government is still not able to fully grasp its extent let alone reduce its prevalence or harms. We will therefore continue to monitor both good and poor practice across government in this area.
What the government said
The government responded on 27 June 2023. The deadline was 31 May 2023.
Summary written by Accountability Index from the government's response.
The government states that it "agrees with" each of the Committee's recommendations on progress combatting fraud, and reports that the Fraud Strategy has been published.
- On Action Fraud, the government is providing £30 million to City of London Police to support the upgrade by 2024, with the full replacement service due to launch in 2024 (target date: spring 2024).
- On police capacity, the Fraud Strategy announces a National Fraud Squad, which "will include over 400 new posts across policing and the NCA by 2025".
- On the justice system, an independent review will consider whether fraud offences "meet the challenges of modern fraud"; sentencing remains "a matter for the independent Sentencing Council and the courts". A Failure to Prevent Fraud offence has been tabled, with guidance to be published before it comes into force.
- On voluntary charters, the government "will publish further charters, including with the insurance sector by early 2024", and on international work it aims to agree an action plan at a Global Fraud Summit in 2024.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 31 October 2022 to its close on 27 June 2023. The dashed mark is the deadline Parliament records for the government's response.
- Oral evidence 1 Dec 2022
- Report 31 Mar 2023
- Government response 27 Jun 2023
- Correspondence 4 letters
What it recommended 12 recommendations · 10 conclusions
2Despite fraud being the most common crime in England and Wales, government’s communications with the...
Recommended (the committee's words)
Despite fraud being the most common crime in England and Wales, government’s communications with the public are still not effective. Fraud accounts for 41% of all crimes committed in England and Wales. Yet public recognition of the government’s fraud awareness campaigns is worryingly low. NCA identified 13 campaigns running at the time of our evidence session. Of these, most are recognised by less than 10% of the public. In 2017, we reported that a lack of co-ordination and consistency in education campaigns can confuse the public and reduce impact, and little progress has been made since then. Despite us raising concerns five years ago about the effectiveness of the flagship “Take Five” awareness campaign, the campaign is still not effective. Although the NCA has performed some evaluation, it is unable to measure the campaign’s overall impact. The NCA is analysing the experiences of victims of fraud to identify where it can best intervene to prevent fraud and it is working to develop an awareness campaign that resonates better than Take Five. Recommendation 2: The Department should set out, as part of its Treasury Minute response, how it will use the results of the National Crime Agency’s (NCA’s) research to improve the coherence and impact of its public awareness campaigns on fraud and how it will measure the impact of future campaigns.
3Victims of fraud are being failed by Action Fraud, which risks undermining public trust in...
Recommended (the committee's words)
Victims of fraud are being failed by Action Fraud, which risks undermining public trust in the police. We are seriously concerned that the failures of Action Fraud in supporting victims of fraud has earned it the nickname “Inaction Fraud”. Many victims feel lost in the system as there is often no response when they make a report to Action Fraud. More than 300,000 victims report their case directly to Action Fraud each year, and a further 600,000 reports come to Action fraud from businesses and industry. But less than 1% of cases received by Action Fraud result in a criminal justice outcome, where an offender is charged or prosecuted for the crime. 6 Progress combatting fraud We are worried that for many people, reporting a fraud may be their only contact with the police, and negative experiences of reporting fraud risks undermining public trust in the police more generally. The Department plans to improve the experience of victims and the level of support provided through a new Action Fraud system, and City of London Police claims it has put victims at the centre of designing the new system. However, this is not expected to be in place until 2024. Recommendation 3: The Department should set out, as part of its Treasury Minute response, how Action Fraud’s replacement in 2024 will improve the way it engages with victims of fraud and updates them about their case and any plans it has to make improvements in the interim.
4The Department has failed to support police forces to build the capacity or skills they...
Recommended (the committee's words)
The Department has failed to support police forces to build the capacity or skills they need to tackle fraud effectively. Despite making up 41% of all crime in the year to June 2022, only around 1% of police personnel are dedicated to fraud. In April 2022, we reported on the Department’s Police Uplift Programme which aimed to recruit 20,000 new police officers. However, only 380 of these 20,000 officers (around 2%) will specialise in fraud. Although fraud is now mentioned in all Police and Crime Plans, police forces are still not prioritising fraud. Many front-line police officers do not know enough about fraud and have not been given the training they need. Forces find it difficult to recruit and retain civilians with the specialist skills needed to tackle fraud as they are also highly desirable to the private sector. Of around 27,000 cases per year sent to local police forces for investigation, less than 5% result in an offender being charged or prosecuted for the crime. Recommendation 4: The Department should outline, as part of its Treasury Minute response, how it will increase both the priority of tackling fraud within territorial police forces and the capacity of police forces to investigate cases. The Department also needs to step up its support to police forces to ensure they can tackle fraud more effectively.
5The criminal justice system’s current approach to penalising and sentencing fraudsters is insufficient to prevent...
Concluded (the committee's words)
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.
6The Department’s reliance on voluntary charters does not produce a strong enough incentive for industry...
Recommended (the committee's words)
The Department’s reliance on voluntary charters does not produce a strong enough incentive for industry to rapidly improve its response to fraud. Industry sectors, such as banking, technology and telecoms, have a vital role to play in designing out opportunities for committing fraud. However, not enough has changed since we last looked at this five years ago. The Department is still reliant on voluntary action from industry, leading to inconsistencies for victims. For example, only around 50% of victims of authorised push payment fraud, where the victim is pressurised to authorise a payment, get their money back. The Department admits that inconsistency arises because reimbursement is on a voluntary basis and is looking at introducing mandatory reimbursement. It is possible to secure impacts through voluntary charters. For example, the Department asserts that persuading telecoms companies to block scam texts sources led to more than a 90% reduction on some operators. However, we are concerned that progress by these means is often difficult and slow, exposing people to the threat of fraud in the meantime. Recommendation 6: The Department should set out, as part of its Treasury Minute response, how voluntary charters will contribute to its fraud strategy, including what changes it expects to see as a result of the charters, by when these will be achieved and what action it will take if they are not.
7The Department has not prioritised developing relationships with international criminal justice agencies.
Recommended (the committee's words)
The Department has not prioritised developing relationships with international criminal justice agencies. Government estimates that around 70% of fraud cases have an international element, meaning that strong relationships with foreign and multinational criminal justice agencies are crucial to tackling fraud. The international dimension of fraud cases often causes long delays to investigation in securing the necessary evidence. The NCA is looking to improve multilateral co- operation to prevent and disrupt fraud. It reports that it has built good relationships with some countries, for example it has been working with counterparts in countries such as Ghana, Nigeria, and India, but it accepts there is still much more to be done. However, despite this, the City of London Police is currently scaling back its international capacity building work as it has insufficient resources to do this alongside upskilling police officers in the UK. Recommendation 7: The Department should set out, as part of its Treasury Minute response, how it will achieve a step change in the breadth and strength of its international relationships as part of its efforts to tackle fraud. 8 Progress combatting fraud 1 Government’s approach to combatting fraud
1On the basis of a report by the Comptroller and Auditor General, we took evidence...
Concluded (the committee's words)
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Home Office (the Department), The National Crime Agency (NCA) and City of London Police about progress combatting fraud against businesses and individuals.2
8We also raised concerns in 2017 about the effectiveness of the flagship “Take Five” awareness...
Concluded (the committee's words)
We also raised concerns in 2017 about the effectiveness of the flagship “Take Five” awareness campaign. Take Five was introduced by Financial Fraud Action UK (now part of UK Finance) in September 2016 and was backed by funding from the Department between September 2017 and March 2020.14 It was intended to be an overarching awareness campaign, delivering consistent messaging for the public on fraud, such as the need to have the right passwords in place and to report fraud quickly if it occurs. The NCA admitted that the messages of Take Five had “not really cut through”, although the Department said it was difficult to measure the overall impact. The NCA’s recent research concluded that the current campaigns had not changed behaviour. Take Five was ranked 6th out of the 13 campaigns running, with only 8% of the public recognising the campaign. The NCA told us that, following this research, it was analysing the experiences of those who are victims of fraud to identify where it can best intervene to prevent fraud. It told us that it was producing a “fraud communications toolkit” which was intended to provide authoritative analysis on how frauds happen and the messages that need to be communicated to protect people from fraud. It also committed to developing a new overarching awareness campaign which it hoped would resonate better than Take Five.15 11 Public Accounts Committee, Sixth Report of Session 2017–19, The growing threat from online fraud, HC 399 12 Written correspondence from Graeme Biggar, Director General of the NCA dated 15 December 2022 13 Q 57; C&AG’s Report, para 6 14 C&AG’s Report, Online fraud, Session 2017–19, HC 45, 30 June 2017 15 Qq 52, 54; Written correspondence from Graeme Biggar, Director General of the NCA dated 15 December 2022 Progress combatting fraud 11 2 Investigating and prosecuting fraud Action Fraud
9Action Fraud was launched in 2009 as the national reporting centre for fraud.
Concluded (the committee's words)
Action Fraud was launched in 2009 as the national reporting centre for fraud. Victims can report to Action Fraud if they have been scammed, defrauded or experienced cyber crime in England, Wales and Northern Ireland. In 2019, the media reported that victims were being misled and mocked by Action Fraud staff. In 2021, the City of London Police settled a 3-year legal dispute with the service provider due to the service “not fulfilling its expected function in line with the contract”.16 We raised concerns that Action Fraud has been nicknamed “Inaction Fraud” and was seen as a black hole by many victims, who feel lost in the system. We also raised concerns that for many people, being a victim of fraud may be their only touchpoint with the police, and if this is a bad experience, this can affect their perception of how effective police forces are overall. The Department agreed this was a “huge issue” and acknowledged that Action Fraud’s performance had not been good enough. It told us it is investing significantly in Action Fraud as the main interface between individual members of the public who are, or think that they might be victims of fraud, and the policing system.17
10More than 300,000 victims report their case directly to Action Fraud each year, and a...
Recommended (the committee's words)
More than 300,000 victims report their case directly to Action Fraud each year, and a further 600,000 reports come to Action Fraud from businesses and industry. But less than 1% of cases received by Action Fraud result in an offender being charged or prosecuted for the crime, .18 City of London Police told us that one of the challenges with investigating reports received through Action Fraud was the level of information received from victims. For example, a victim may report a romance fraud where the fraudster claims to be a fictitious soldier serving in the American military and phoning from the US. However, in reality, the name and location given to the victim are not the real name and location, leaving law enforcement with very little information upon which to base their investigation. City of London Police asserted that the solution to this was both a combination of getting better information from victims, and bringing in intelligence from the private sector, technology companies and law enforcement to build a better understanding of how offenders were committing these crimes.19
11The Department and the City of London Police are currently in the process of procuring...
Recommended (the committee's words)
The Department and the City of London Police are currently in the process of procuring a new Action Fraud system. We questioned them about their plans for the new system and how it will address the current issues. They told us that they were putting victims at the centre of the procurement of the new system and had been getting input from victims to help test the design. They also told us they were creating a user dashboard so victims can track where their case is in the system. City of London Police told us that whilst not all cases are investigated, they often lead to other actions such as taking down a website. It hoped to be able to attribute outcomes to cases as part of the new dashboard to reassure victims that some action had been taken as a result of their report.20 However, the procurement process was ongoing at the time of our evidence session, and the new Action Fraud system was not expected to be in place until 2024.21 16 C&AG’s Report, Figure 10 17 Qq 32, 112 18 Q 46 19 Q 101 20 Qq 32–33, 103 21 Qq 49 12 Progress combatting fraud The capacity of police forces to tackle fraud
12Despite making up 41% of all crime in the year to June 2022, only around...
Recommended (the committee's words)
Despite making up 41% of all crime in the year to June 2022, only around 1% of police personnel are dedicated to fraud. In 2017, we raised concerns that fraud was not mentioned in all Police & Crime Commissioners’ police and crime plans.22 The NCA told us that fraud is now mentioned in all police and crime plans but that this will “take some time to feed into how police direct their activity”.23 The Department also told us there was the possibility of government setting police direction by including fraud in the strategic policing requirement—a document which sets out the Home Secretary’s view of the national threats and the policing capabilities required to counter them—and that this was something that Ministers were considering. City of London Police told us that around 27,000 fraud cases a year were sent from Action Fraud and the National Fraud Intelligence Bureau, a centralised intelligence function within the City of London Police, to policing and law enforcement for investigation. Of those, around 5% result in a criminal justice outcome, where an offender is charged or prosecuted for the crime. The NCA told us that the historic approach of collecting thousands of reports from victims and trying to investigate these had not worked, and the government was now looking to take a more proactive approach to prevent fraud.24 The Department explained that it was allocating £400 million over the next spending review period to enhance the capabilities of law enforcement and intelligence organisations to respond to fraud. City of London Police told us that part of this funding was intended to build 10 proactive fraud investigation teams around the UK, who will work with local and regional policing to identify and disrupt fraudsters before a fraud is committed.25The NCA gave an example of recent work by the Metropolitan police in identifying and taking down a website which was enabling criminals to make spoof phone calls to individuals, posing as their bank, the NCA or a
13The Department acknowledged that the current police resourcing levels for fraud needed to increase.
Recommended (the committee's words)
The Department acknowledged that the current police resourcing levels for fraud needed to increase. In April 2022, we reported on the Department’s Police Uplift Programme which aimed to recruit 20,000 new police officers.27 However, as set out in our sister Committee’s report, only 380 of these 20,000 officers (around 2%) will specialise in fraud. The City of London Police told us that forces were willing to investigate fraud but that the issue was often the availability of resources. It explained that many chief constables ask what they were expected to stop doing in order to deal with fraud otherwise they needed more resources. It told us, however, that the first step was getting more from existing resources by focusing on prevention. As our sister Committee recently reported, resourcing issues in policing can also be exacerbated by the significant amounts of time it takes to redact and disclose vast amounts of material that can turn out to be unnecessary to pursuing a case. It recommended clearer guidelines on how the legislation should operate for fraud cases with large quantities of digital material.28
14City of London Police admitted that front-line officers do not have the training they need...
Concluded (the committee's words)
City of London Police admitted that front-line officers do not have the training they need to tackle fraud. It told us that “The constable on the ground will know very little 22 Public Accounts Committee, Sixth Report of Session 2017–19, The growing threat from online fraud, HC 399 23 Q 37 24 Qq 32–33, 36, 46, 115 25 Qq 22, 30 26 Q 123 27 Public Accounts Committee, Fifteenth Report of Session 2022–23, The Police Uplift Programme, HC-261 28 Qq 36–38, 53; Justice Committee, Fourth Report of Session 2022–23, Fraud and the Justice System, HC 12 Progress combatting fraud 13 about fraud. They probably will not know about the national lead force status and, if they do, they will know very little about it. They definitely need more training”.29 It accepted that this can cause issues for police morale because officers don’t have the education and training they need to keep pace with such a fast-changing world. It also told us there were issues with the recruitment and retention of specialists as fraud specialists have skills which are very attractive to the private sector. City of London Police told us it planned to improve the level of specialist training given to police officers investigating fraud through its Economic and Cyber Crime Academy and the College of Policing. It also explained that it was in the process of launching an app for constables on the ground. It told us this will describe what Action Fraud is, how to report fraud, what City of London Police does as the national lead force for fraud, and give prevention advice which officers can pass on to the public.30
15We asked the Home Office whether police forces needed to consider fraud as a strategic...
Recommended (the committee's words)
We asked the Home Office whether police forces needed to consider fraud as a strategic objective, and be given the resources needed, so that the issues relating to fraud can start to be addressed. The Home Office told us that it had “heard that message loud and clear” and that it was hopeful that the issue would have progressed by the net iteration of the Strategic Policing Requirements. Following our evidence session, in February 2023 the Home Office published its Strategic Policing Requirement, which referenced the threat of fraud and confirmed that it would produce a fraud supplement to provide greater detail on what is expected regarding the response to fraud.31 The criminal justice response
16Under the current sentencing guidelines, fraud carries a maximum sentence of 10 years imprisonment, or...
Concluded (the committee's words)
Under the current sentencing guidelines, fraud carries a maximum sentence of 10 years imprisonment, or for crimes where the financial loss is less than £5,000, a maximum of one year. However, the majority of those found guilty of crimes with a loss under £5,000 receive a fine or community order instead of the one year prison sentence available.32 The Department acknowledged that the maximum sentence permissible for crimes with a loss over £5,000 is only used “very rarely” and needed to be used more. The NCA told us that law enforcement can often spend longer investigating a fraud than the convicted criminal is sentenced to, and there can be a feeling of “hopelessness” in investigating and prosecuting fraud cases. It told us that police were now trying to ensure statements provided by victims of fraud captured not only the financial loss incurred but also the impact of that loss on the individual and the potential psychological damage it may have caused to help judges take informed decisions on sentences.33 The NCA also told us that one of the reasons there was so much fraud in the UK compared with other countries, was that there was not much chance of being caught. Of around 900,000 frauds reported each year in the England and Wales, currently less than 1% result in a criminal justice outcome. The NCA argued that forming an effective deterrent for criminals is not only about the length of sentences but also the likelihood of being caught, and recognised that both needed to be addressed.34 29 Q 114 30 Qq 31, 41, 114 31 Q115 & Home Office, The Strategic Policing Requirement, February 2023 32 Justice Committee, Fourth Report of Session 2022–23, Fraud and the Justice System, HC 12 33 Qq 53, 64 34 Qq 46, 65 14 Progress combatting fraud
17In October 2022, our sister Committee published its report, Fraud and the Justice System.
Recommended (the committee's words)
In October 2022, our sister Committee published its report, Fraud and the Justice System. This examined in depth how the criminal justice system is set up to tackle fraud. It concluded that a wholesale change in philosophy and practice was needed which was more aggressive in investigation, prosecution and conviction, and much more focused on the impact of fraud on victims. It made 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. It also made recommendations around disclosure guidelines, and the introduction of a ‘failure to prevent’ offence for fraud. At the time of our session, the Department had not yet responded to the recommendations in the report.35 The Government responded to the Committee’s report in January 2023. This included its commitment to continue to work closely with partners to consider how further improvement could be made to disclosure guidance, and that the forthcoming fraud strategy would detail its aim to ensure that the disclosure regime meets the needs of complex fraud cases. Similarly, Government recognised that the current law on Corporate Criminal Law does not adequately hold organisations and their senior persons to accounts for offences committed by the corporation and their associated persons. It explained that Government was working to consider the Law Commission’s review of the issue published in June 2022 and its options for reform in order to determine a case for strengthening the law on corporate criminal liability, including the creation of an offence for failure to prevent fraud. On sentencing guidelines, the Government explained that the independent Sentencing Council was responsible for developing sentencing guidelines and it was therefore for the Council to respond to this recommendation, confirming that Government had shared
18When we last examined the growing threat of fraud in 2017, we concluded that while...
Concluded (the committee's words)
When we last examined the growing threat of fraud in 2017, we concluded that while the Department was the only body that could provide strategic national leadership, fraud had become too vast a problem for it to tackle on its own.37 Fraud has grown since then and the Department is still reliant on voluntary action from industry, including banks and retailers, to identify and design out opportunities for fraud in their systems. The voluntary approach government has taken to working with industry has delivered some successes. For example, the NCA told us that fraudulent websites now appeared far less frequently in paid-for advertising on search engines than they did two years ago. It told us this was due to hard negotiations by the Financial Conduct Authority to persuade Google and others to check that companies are regulated by the FCA before posting advertising from them.38
19In October 2021, the Department also published its first tranche of voluntary sector charters, covering...
Concluded (the committee's words)
In October 2021, the Department also published its first tranche of voluntary sector charters, covering the retail banking, accountancy, and telecoms sectors. These set out commitments from the industry sectors on actions they will take to tackle fraud and are monitored by the Joint Fraud Taskforce. The Department told us that these have yielded some positive results. For example, it told us that, following a charter commitment with the telecoms sector to introduce new software to try to reduce the number of scam text messages, some operators had seen a 90% reduction.39 However, in written evidence submitted to the Committee, UK Finance, a major representative body for the financial services sector, told us it would “encourage the Government to re-evaluate the continued focus on the Charters given the advent of the Government’s Fraud Strategy.”40
20The Department acknowledged that its voluntary approach to working with industry had caused inconsistencies for...
Recommended (the committee's words)
The Department acknowledged that its voluntary approach to working with industry had caused inconsistencies for victims and explained that it was beginning to introduce some mandatory measures. For example, it told us that only about 50% of victims of authorised push payment fraud are reimbursed by their banks because reimbursement was on a voluntary basis.41 In May 2022, Government recognised that in recent years, authorised push payment scams, where someone is deceived or defrauded into authorising a payment to a criminal, have increased both in value and volume, with many individuals suffering significant financial and emotional harm. In response, HM Treasury announced that the Financial Services and Markets Bill will include provision to make reimbursement mandatory.42 However, not all stakeholders support this approach. In written evidence, UK Finance warned that focusing on reimbursement was “too little too late” and asserted that greater efforts were needed upstream to stop fraud at its source.43 The NCA told us that provisions in the draft Online Safety Bill will also be mandatory and will have significant penalties attached. But the NCA said it would welcome a ‘failure to prevent’ offence to go 37 Public Accounts Committee, Sixth Report of Session 2017–19, The growing threat from online fraud, HC 399 38 Q 87; C&AG’s Report, para 2.19 39 Q 106; C&AG’s Report, para 2.19 40 Written evidence submitted by UK Finance dated November 2022 41 Q 62 42 HM Treasury Policy Paper, Government approach to authorised push payment scam reimbursement, 10 May 2022 43 Written evidence submitted by UK Finance dated November 2022 16 Progress combatting fraud even further in changing industry behaviour. Our sister Committee also recommended that ‘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.’44 Working with international partners
21Fraud is a global issue and criminals are increasingly using the internet to target victims...
Concluded (the committee's words)
Fraud is a global issue and criminals are increasingly using the internet to target victims from anywhere in the world. In the year to June 2022, 80% of frauds in England and Wales were enabled through computer technology, and the NCA estimates that around 70% of frauds have an international element. The NCA told us that this international element can cause significant delays to investigations as cases are complex and gathering evidence from overseas can be very time-consuming. The NCA acknowledged that a more proactive approach is needed to stop these crimes before they happen, rather than waiting until a fraud has been committed to then have to investigate a complex international crime.45
22City of London Police acknowledged that having the mechanisms to work internationally is important to...
Concluded (the committee's words)
City of London Police acknowledged that having the mechanisms to work internationally is important to allow the government to work proactively to tackle fraud. However, the NCA was admitted that government “really do have a lot more to do” when it comes to building relationships with international partners.46 Government has done some work with individual countries, for example, the NCA told us it had worked with law enforcement agencies in India looking at investment fraud, and in Ghana and Nigeria looking at romance fraud. It told us that it was also working with Five Eyes, an intelligence alliance comprising Australia, Canada, New Zealand, America, and the UK.47 However, the National Audit Office report highlighted that the Department has limited understanding of the international response on fraud, or how the UK’s response compares with other countries.48 The NCA told us that it does not have the same forums for engaging with international partners on fraud as it does with some other crimes, such as money laundering and terrorist finance. It acknowledged that government needed to do more to work with international partners and to find a better means of multinational co-operation. However, investing more resource in this will not necessarily be straightforward. For example, City of London Police told us it was in the process of scaling back some of its work to build capability on tackling fraud overseas as it does not have sufficient resources to do this alongside upskilling police officers in the UK.49 44 Qq 88–89; Justice Committee, Fourth Report of Session 2022–23, Fraud and the Justice System, HC 12 45 Qq 39–41 46 Qq 90, 98 47 Q 40 48 C&AG’s Report, para 2.21 49 Qq 90, 99 Progress combatting fraud 17
Evidence
Oral evidence sessions 1
- 1 Dec 2022Progress combatting fraud4 witnesses, listed belowparliament.uk ↗
Who gave evidence 4 witnesses
- Duncan TessierDirector of Economic Crime, Home Office
- Graeme Biggar CBEDirector General, National Crime Agency
- Matthew Rycroft CBEPermanent Secretary, Home Office
- Pete O’DohertyAssistant Commissioner, City of London Police
Correspondence 4 letters
- 12 Jan 2023Correspondence from Mark Cheeseman, Interim CEO, Public Sector Fraud Authority (PSFA), re Public Accounts Committee Response for the 9th Report of the Session held in 2021/2 on Counter Fraud, dated 19 December 2022
- 12 Jan 2023Correspondence from Matthew Rycroft CBE, Permanent Secretary, Home Office, re Progress Combatting Fraud – update, dated 15 December 2022
- 19 Dec 2022Correspondence from Matthew Rycroft CBE, Permanent Secretary, Home Office, re Progress Combatting Fraud – further update, dated 15 December 2022
- 19 Dec 2022Correspondence from Graeme Biggar CBE, Director General, National Crime Agency, re additional information – Progress Combatting Fraud, dated 15 December 2022