'Govt fraud strategy must be flexible to get ahead of scammers'

The government's recently announced fraud strategy was desperately needed to set out a structured approach to combatting fraud in the UK.

Statistics show that the cases of fraud have escalated in recent years and now fraud is 40 per cent of all crime committed in the UK.

That statistic is likely to be understated, given that some victims of fraud do not report their cases to the police or at all. Their reluctance to report may be due to being embarrassed or worried about reputational damage or thinking that nothing will be done. 

Before getting into the specifics of the fraud strategy, it is worth noting that there are different types of fraud.

Fraud can be grouped into three main categories: scams (romance, investment, authorised push payments); financial statement and reporting fraud; and asset misappropriation/theft. 

The increasing incidence of fraud can be attributed, at least in part, to the low conviction rates for such crimes.

Most of the government's fraud strategy is focused on taking action to shut down scams and protect victims of those scams.

While this is an area of fraud that has been increasing, there have been increases in all types of fraud in recent years and there are different drivers for the different types of fraud.

There are separate steps being taken to combat these other types of fraud, including the 'failure to prevent' offence as part of the economic crime bill, which is currently making its way through parliament. 

Taking aim at scams does make sense as the proceeds of scams earned by the fraudsters are now in the billions annually.

Increasingly, scams are being committed by organised criminal gangs. Those gangs then use the proceeds of those scams to finance further fraud schemes as well as other more serious crimes, including terrorism and modern slavery.

The increasing incidence of fraud can be attributed, at least in part, to the low conviction rates for such crimes. This has created an impression that engaging in fraud is a lucrative endeavour, further fuelling its proliferation.

Many of these gangs operate from outside the UK but target UK-based victims.

Therefore, it is often difficult for UK law enforcement to identify those perpetrators and pursue those fraudsters to bring them to justice without a strong partnership with international partners to both share information and work together.

The fraud strategy does not go nearly far enough.

Another factor fuelling this rise is the ease with which a company can be established in the UK. It only takes a few minutes to register a company with Companies House without the person registering it providing any proof of who they are.