Driving the next generation of fraud reforms

With a General Election announced for 4 July, now is the perfect time for a stock take on the progress made over the past decade in relation to tackling fraud. For the most part, this was a decade in which fraud felt like the Cinderella of the criminal justice system; a crime neglected by politicians and police alike while other crime types received the bulk of political attention and, by extension, resources.

However, to extend the analogy, the past 12 months have felt like the year in which Cinderella was finally taken to the ball. This was particularly evident when, in March 2024 – during three days of high pomp in London’s Lancaster House – the government held the first Global Fraud Summit, an event which marked the delivery of one of the key commitments in the UK’s  Fraud Strategy launched in May 2023. This event displayed, at least at a rhetorical level, political recognition of the scale of the problem.

However, as the carriages pulled away from the Summit and Cinderella departed the ball, the question could be posed, how much has the UK Fraud Strategy really achieved in its first year? And what should the next government prioritise as they focus on the next generation of fraud reforms?

To answer the first question, well arguably quite a lot on paper. In the past year, as regards the legislative framework for tackling fraud, we’ve seen the introduction of draft legislation banning possession of SIM farms, a consultation on regulations to ban cold calling for financial products, and the outline of forthcoming mandatory authorised push payment fraud reimbursement requirement.

Regarding the policy sphere, amongst other things, we’ve seen the launch of the Online Fraud Charter, setting out voluntary counter-fraud measures with social media and tech companies, and a high-profile ‘Stop! Think Fraud’ public information campaign. Combined with measures to bolster policing and reboot the Action Fraud victim reporting service, the measures to date certainly do more in 12 months than, arguably, the previous 12 years.

However, these long-overdue measures are just the starting point in reversing the growth of fraud during a ‘lost decade’ of counter-fraud progress, in which time technological and societal changes have led to an unchecked explosion of the problem. Will fraud be more of a ballot box criminal justice issue than ever before? And what should parties be including in their manifestos to show that they mean business when tackling fraud?

Introducing the Cifas Fraud Pledges 2024

To inform that debate, on 16 May we launched the Cifas Fraud Pledges 2024 – a set of proposals for the next generation of fraud reforms, informed by our unique position as the UK’s leading not-for-profit fraud prevention service for over 700 members across the public, private and third sectors. In these proposals, we set out how a future government could build from a strong set of foundations in the Fraud Strategy 2023 to drive forward a meaningful response to fraud in the future.

Pledge 1: Provide cross-government leadership in the response to fraud

First and foremost, it is essential that fraud – and wider economic crime – has the proper leadership across government that it deserves to prevent it being everybody’s problem, but nobody’s priority. While the creation of the position of Anti-Fraud Champion has been a catalyst for change, the role has its limitations. Creating a non-departmental Minister for Economic Crime with authority to push cross-departmental reforms is the only way to secure fraud’s position at the top table of policy making. 

Pledge 2: Improve the policing response to fraud

Second, recent investment in a new ‘National Fraud Squad’ is welcome, but the creation of 400 new posts across policing and the National Crime Agency should be seen as a starting point. The scale of the problem requires a much more coordinated response and a ring-fenced policing budget. It also needs to be implemented alongside a better plan for harnessing the disruptive capabilities of the private sector via systemic data and intelligence sharing.

Pledge 3: Enhance support to victims of fraud

Third, recent efforts to improve the response for individual victims are welcome. However, the fraud strategy fails to put in place a plan for responding to fraud against business victims. With the growth of criminal groups targeting of businesses, particularly small and medium-sized enterprises (SMEs), tackling business fraud should be core to a future Fraud Strategy.   

Pledge 4: Make the criminal justice response fit for tackling 21st Century fraud

Fourth, it is a truism that the law and criminal justice system is ill-set up to respond to the modern face of organised fraud, particularly that which is perpetrated through online channels. To respond to this, it is important that the independent review into disclosure and fraud offences finds a solution which adequately balances the need for a fair and just criminal justice response, with the terabytes of data and complexity of the modern face of organised frauds. It’s also important to ensure that the act of identity theft through online data harvesting is effectively criminalised in practice rather than in name.

Pledge 5: Require social media and online platforms to join the multi-sector response to fraud

Finally, there is a need to properly tackle the role of the social media and Big Tech firms in propagating fraud. While the Online Fraud Charter is a reasonable starting point, it is essential that measures proposed in the Ofcom Illegal Harms Consultation are strengthened and that consideration is given to how to better share the cost burdens of fraud more equitably across the private sector.

In summary, the Fraud Strategy 2023 was the Fairy Godmother who managed to take Cinderella out of servitude for an evening. A future response under an incoming government should aim to be the Prince Charming.