This week parliament presented a new paper on their Fraud Strategy to stop scams and protect the public. The paper confirms that Fraud now accounts for “over 40% of crime but receives less than 1% of police resource.” The newly announced National Fraud Squad (NFS) is to be dedicated to pursuing sophisticated and harmful fraudsters in order to assist victims. 

In recent years, businesses and individuals who have fallen victim to fraud have been forced to pursue the fraudsters via civil remedies.  This usually consists of applying for a freezing injunction to preserve stolen assets and subsequently having to follow a gruelling and expensive court process to pursue the fraudsters and recover the assets. Whilst expensive, this has proved to be a quick and effective way to freeze stolen assets to secure a recovery. 

For example, the civil route to recovery has commonly been deployed where victims of cryptocurrency fraud are concerned, although fraudsters are usually based outside the jurisdiction which can make tracing and tracking more difficult. Similarly, in cases of fraud caused by ransomware or phishing scams, the money obtained by the fraudsters is almost immediately transferred outside the jurisdiction and offshore. 

Due to evolving technologies, fraud has become borderless, with most involving multiple jurisdictions. The government’s new publication hopes to tackle this issue by making fraud a priority on the “international political stage, starting with a global fraud summit in 2024.”

The paper also touches on data sharing and cross-government capabilities to try and tackle the issue of international fraud. The new Economic Crime and Corporate Transparency Bill (ECCT) looks to introduce provisions to disapply civil liabilities.  As an example, if this was applied, it would mean an AML regulated firm, could not be held liable for breach of confidence if they shared customer information for the sole purpose of prevention and detection of economic crime. 

Most importantly, the paper gave assurances to victims of fraud. A press release issued by the government acknowledged that fraudsters were taking advantage of new technology to prey on victims, hiding behind untraceable and “fake” numbers. The paper ensured reimbursement and support, including a change in the law so that more victims of fraud could get their money back. It is unclear whether this includes further changes to the law or was a reference to those laws which are already making their way through parliament, such as the ECCT and Online Safety Bill. 

An interesting development is the potential requirement of tech companies to block fraud with the government claiming they will “hold tech companies to account to reduce online fraud and issue significant fines for those who do not, by passing and implementing the Online Safety Bill.” 

It was also acknowledged that funds fraudulently obtained have been connected to Organised Crime Groups and terrorism. 

The publication is the start of a supposed shift in the UK’s approach to fraud. Fraud has, in our experience, had a detrimental impact upon individuals and businesses, with some businesses having to declare themselves insolvent following an event of fraud. 

The strategy is phased across 3 years and should be in place by 2025. The aim is to return fraud to pre-pandemic levels and cut fraud by a further 10% from the level it had reached in 2019.  

We will be continuing to provide updates on the UK’s Fraud Strategy and Economic Crime Plan.