It is no surprise there are plans for a full scale review of the UK’s fraud laws for the first time in 40 years. The risk of fraud in the UK is at an all-time high. Currently 40% of crime in England and Wales – an estimated 3.7 million incidents – is fraud in one form or another.
Why do we need to review the UK’s fraud laws?
In addition to the huge percentage of crimes fraud accounts for in England and Wales (which has increased by 12% since 2017), it also requires an enormous amount of legal resource to investigate and progress incidences of fraud through the courts. This is at a time when the courts are already full and struggling to cope.
Fraud is also having a hugely damaging effect on the UK’s economy which is another reason our fraud laws need review.
It costs the UK economy an estimated £219 billion annually. Estimates suggest losses to the public sector alone could be as high as £81 billion. And it is not only organisations and state that are affected. Because of the rise in cases, a significant portion of the population is being affected by fraud, with some individuals reporting losses of £1,000 or more. This could add up to costing individuals as much as £6.8 billion in total every year.
The most common types of fraud are identity fraud, online fraud, and APP (Authorised Push Payment) scams. Online fraud is arguably our major concern, with nearly 80% of APP fraud cases starting online.
Given how much fraud is damaging both our population and its businesses, it is no surprise that the government – with the full support of law enforcement and the financial services industry – are working hard to find ways to prevent not only the disruption fraud causes but also the likelihood of continued growth if preventative efforts aren’t ramped up.
An independent review of the UK’s fraud laws looks to tackle Britain’s biggest crime
Jonathan Fisher KC has begun work on part 2 of his Independent Review of Disclosure and Better Protections for the British public against fraud. It is the first large scale review of fraud legislation in the UK since 1986 and, as we’ve said, the types and scale of fraud have changed massively since the last review. The primary goal of this review will be to introduce much tougher enforcement for fraudsters.
In 1986 Lord Roskill’s review focused mostly on the serious fraud committed by corporate entities. Over the last 40 years the targets have shifted towards small businesses and individuals. Its perpetrators have also changed. Today fraud is committed by highly organised criminal gangs, many of whom are based overseas. The current fraud laws do not reflect this change.
Technology is another key factor that needs to be considered. Fraud has been transformed immeasurably by technology since the UK’s current fraud laws were introduced. The increasing use of artificial intelligence to create scambots and deepfakes is one threat. Meanwhile, creating websites to impersonate established businesses and public authorities may not be new but the way technology has been used to make these sites more realistic has definitely been abetted by improved technology and the ease with which fraudsters can access new platforms and design options.
Thanks to technology, gangs now have the ability to target tens of thousands of UK residents every hour via social media and smartphones. Email is still being used but to a far lesser extent given the warnings we have all received about phishing emails. That said, why would you rely on an email ‘middleman’ if you can go direct to source and hook a target at source, persuading them to click through as they use the internet and social media? Given the huge number of us that are online at all times, a fraudster only needs to snare a tiny percentage to make millions of pounds.
Technology was an area Mr Fisher specifically targeted when he spoke at the launch of Part 2 of his review of the UK’s fraud laws:
“With the advances in digital technology, it has become much easier for fraudsters to avoid detection, and indeed prosecution, outright.”
What will the review of the UK’s fraud laws entail?
The Home Office has taken all these emerging threats into consideration and plans to use the findings as the core of a new, expanded fraud strategy which they claim will be published later this year. However, they have also said the results from Mr Fisher’s independent review will also be inputted into the government’s strategy, a strategy that is also likely to include a huge international element as various countries look to tighten cooperation to tackle fraud on a global scale.
The bulk of Part 2 of the Fisher Review of the UK’s fraud laws will examine the largest challenges to bringing fraudsters to justice in England and Wales at each stage of a fraud’s life cycle:
- Detection and reporting
- Disruption
- Investigation
- Prosecution and offences
- Courts
- Penalties
- Rehabilitation
Like Part 1, their findings will culminate with a range of recommendations that will, it is hoped, modernise the current system in line with the current threat profile and look to free up more enforcement time for all involved.
The government’s Fraud Minister, Lord Hanson, is in full support of the second review of the UK’s fraud laws:
“Fraud is a crime which can devastate lives, and I am determined to do everything possible to bring these criminals to justice. I welcome Jonathan Fisher KC’s review which will help us expand our knowledge base about how to better detect, disrupt and deter fraudsters and deliver a swifter justice for the victims, as part of our Plan for Change. The government is determined to continue our fight against this appalling crime, and I look forward to the outcome of this important review.”
Attorney General Lord Hermer KC is equally as supportive:
“Fraud is one of the most pernicious crimes. The criminals driving these schemes are using ever more sophisticated tactics to scam their victims. It is crucial that our criminal justice system keeps pace. Fraud doesn’t discriminate against age, gender or sex and it leaves victims suffering financial loss and emotional distress. I welcome this independent review of fraud and look forward to considering any findings as part of our Plan for Change.”
Fraud is an area of crime Westgate Chamber’s criminal team have experience in. If you or a client are involved in a fraud case and would like to discuss the details with one of our specialists, please contact us today.