Helena Wood is Head of Public Policy at Cifas.
In May 2023, the Government launched its first-ever Fraud Strategy – and not before time. As pointed out by Simon Fell, on this platform earlier this year, fraud is the most common crime in the UK, representing over 41 per cent of all crime.
Crime of this scale not only has significant implications for individuals and businesses, but also comes at a significant cost to the UK economy. Recent research by the University of Portsmouth and Crowe LLP, a consultancy firm, suggests that the UK’s fraud problem may be costing the economy upwards of £219 billion per annum.
Furthermore, a report by the Global Anti-Scam Alliance, supported by Cifas, my own organisation which specialises in not-for-profit fraud prevention, suggests that 1 in 10 UK citizens may have fallen victim to a scam in the last year alone.
With voters and the business community feeling the pain of this growing crime epidemic, there are votes to be gained from focusing on measures that could protect citizens, the public purse, and businesses from a multi-billion-pound problem. As parties begin drawing up manifesto pledges, where might a future government build on the existing measures in the Fraud Strategy to take the fight against fraud to the next level?
First, we need to get a grip on the role the online realm plays in facilitating fraud. According to Cifas data, 86 per cent of identity fraud occurs through online channels . Our partners at UK Finance recently published research showing that 78 per cent of social engineering scams begin online.
Although the Fraud Strategy commits to developing a new ‘Tech Charter’ to increase the role played by technology and social media companies, it is unclear how willing the biggest firms are to become part of the solution rather than part of the problem, beyond forthcoming regulatory requirements in the Online Safety Bill.
There is a case to be made for those companies who profit most from the UK’s £14 billion digital advertising market to contribute to the cost of cleaning up the system. As succinctly put in 2022 by Anthony Browne MP, the recently appointed Anti-Fraud Champion, ‘those who profit from fraud should pay the costs’.
With the banks and other large firms already contributing to an ‘Economic Crime Levy’ to invest in tackling money laundering, applying a ‘Fraud Levy’ to the largest tech and social media companies seems a proportionate policy response.
Second, while parties of all hues appeared keen to push media-friendly soundbites calling for visible community policing, the nature of the fraud problem is, without doubt, an issue less in need of ‘more bobbies on the beat’, than ‘more geeks in the suite’. The skills needed to investigate fraud, especially the online variety, go far beyond that of a warranted officer.
Future responses must include a commitment to invest in building the specialist counter-fraud capacity and capabilities for the future. The specialist skills needed to tackle the problem – data science, digital forensics, and financial investigation – are in short supply in the UK. Pathways into the counter-fraud profession are not always obvious to those setting out on their career. I
Cotinuing to focus solely on uniformed, analog policing in the public narrative does not equip the UK well to tackle the digital future of crime.
Beyond this, with the alarming growth in criminals co-opting generative AI to evade fraud controls and to improve targeting of victims via social media, there is an opportunity for the UK to become a world leader in the development of counter-fraud technologies – AI to beat AI – within the Prime Minister’s strategy to position the UK a global leader in artificial intelligence.
Third, while there is a need to improve the enforcement response to fraud, it would be naïve to suggest that we can deal with a crime of this scale through arrests and prosecutions. The current Fraud Strategy’s focus on preventative measures to stop criminals from reaching victims in the first place is the right one.
However, this effort needs to go further and faster. It is here that the adage ‘it takes a network to defeat a network’ should be our watchword.
As we in the counter-fraud community know, fraudsters are highly flexible and adaptable and will simply shift from sector to sector as we shut down existing routes to the ‘market’. All parts of the system – public, private, and third sectors – must collaborate to share data, and intelligence and learn about the who, how, and where of emerging fraud threats.
At Cifas we see the value and impact of multi-sector data and intelligence-sharing on fraudulent conduct daily. With the right protections in place to safeguard privacy and security, data and knowledge are our best weapons against fraudsters.
Some of these collaborative data-sharing efforts are already in train. There are currently multiple avenues for data-sharing across the public and private sectors. We now need to connect and rationalize this landscape, increase cross-sector collaboration, and industrialise counter-fraud data-sharing.
In sum, the Fraud Strategy has gathered troops from the public, private, and third sectors. We now need to ensure we build the battalion, march in time, and place a united front against a common foe.