Partner Richard Cannon writes in The Times on the shortcomings within the UK Government’s new fraud strategy.
Richard’s article was published on 11 May 2023 in The Times, and can be read here.
The publication last week of the government’s much-vaunted fraud strategy confirmed fears that it would be insufficient to tackle the UK’s rising fraud levels. While the measures outlined are a step in the right direction, the stark lack of firepower offered by the plans in both regulatory and financial terms provides scant protection to consumers, and falls short of matching ministers’ tough talk on combating economic crime.
The stated aim of the strategy is to reduce fraud by 10% on 2019 levels by 2025, which is currently estimated by the government to cost Britons £7bn annually in personal losses. However, per its Economic Crime Plan published in March, overall fraud costs the country a staggering £190bn per year, meaning that a response of similarly gargantuan scale is required.
Instead, the government has introduced plans for a mere 475 new financial crime investigator posts, and will replace the parlous Action Fraud with a ‘state-of-the-art system’ for victims to report fraud. But the reporting of fraud is meaningless unless is it going to be property investigated and enforcement action taken. It is also interesting that there is no mention of the Serious Fraud Office in the 90-page document, despite recent high-profile failures.
The focus of the plans appears to be a weak cure rather than prevention, with significant emphasis placed on reporting crimes once they have occurred. Given that fraudsters are now able to target the public more easily than ever before over the internet, the government’s plans should perhaps focus more on targeting criminals before they strike, rather than closing the stable door after the horse has bolted with somebody’s life savings in tow.
An estimated 77% of fraud emanates from online platforms, but the government watered down earlier-mooted proposals to make tech companies liable for fraud originating on their sites. Instead, the final strategy simply proposes “voluntary agreements” between industry and government, abrogating them of responsibility to reimburse victims.
Despite investment scams being responsible for a vast amount of fraud, the closest the strategy comes to tackling the issue is the outlawing of cold calls peddling financial products. Unfortunately, this measure will likely have little impact, given that fake investment schemes proliferate online due to a lack of regulation and the ease by which criminals target the public via social media.
The UK has long been a jurisdiction of choice and opportunity for fraudsters and cyber criminals, who operate with relative impunity and rake in ever-growing sums. The government’s strategy will be of little consolation to fraud victims, and the plan is unlikely to convince the public that authorities are winning the fight against criminals. The fraud epidemic will not be cured without more meaningful action from the government, and a pledge of £400m – half of it from the private sector – over 3 years is just not going to cut it.
15 Feb 2024
Partner Richard Cannon comments on the SFO and whistleblowers in The Times, City A.M. and The Law Society Gazette
09 Feb 2024