'Govt's fraud strategy welcomed but resources boost is crucial to success'

Its ambition is clear and laudable: to cut fraud by 10 per cent before December 2024, by “tackling fraudsters head on, protecting the British people’s hard-earned cash from criminals and putting more fraudsters behind bars”.

Without doubt, strong and effective enforcement action is necessary, but two immediate questions spring to mind for experienced observers in this space. Do the plans make sense? And, if so, will they be properly funded?  

Fraud is not just a widespread problem but a multi-faceted one, ranging from online mass-marketing scams to billion-pound, international corporate scandals. 

Any strategy that intends to tackle it must therefore be both broad enough to encompass the whole spectrum, and detailed enough to make a tangible difference.

The strategy’s proposed solutions are the right ones: build more courts, recruit more judges, provide more assistance, and improve the disclosure regime.

Most importantly, it must be backed up by sufficient resources for those plans to stand a chance of succeeding.   

The playoffs between breadth, detail and resources can be seen throughout the strategy. For example, the much-maligned Action Fraud reporting service will be replaced, with the intention to refer more cases for investigation more quickly, but this will only shift the problem further down the line should the police be inadequately resourced to deal with the additional workload. 

The strategy also introduces a national fraud squad boasting 400 investigators, but whether this is a redistribution of existing resources or a genuinely new and dedicated task-force is unclear.  

With the ambition of bringing more fraudsters to court, the strategy’s proposed solutions are the right ones: build more courts, recruit more judges, provide more assistance for jurors in complex cases, and improve the disclosure regime that has bogged-down the Serious Fraud Office for long.

But, as it acknowledges, this runs straight into the wall of backlogged Crown Court cases following the pandemic.

All of these changes will take time and money, both of which are in short supply.

Some funding could be raised by another initiative, like the increased use of civil recovery tools to recover the proceeds of fraud, including crypto assets, although quite rightly the focus is on returning the money to victims rather than the Treasury.

Will law enforcement have sufficient resources to deal with the data effectively and fairly?

One particularly interesting plan is to expand the use of the US-UK Data Access Agreement, enacted in the UK as the Crime (Overseas Production Orders) Act 2019 but only in force since October 2022. 

The agreement allows UK law enforcement agencies to obtain a court order from a UK judge, which compels a US data host to hand over any electronic evidence that is “likely to be of substantial value” in an investigation.  

Previously, access to electronic evidence stored overseas was only possible through the slow and cumbersome use of mutual legal assistance.

Overseas production orders, or OPOs, as they are known, hugely simplify and accelerate the process, bringing potentially vital evidence within easy reach. It is not unusual for individuals and companies to store all of their data – emails, files, documents, business records – with cloud-hosting providers based in the US.

However, this once again raises the question of resourcing. Will law enforcement have sufficient resources to deal with the data effectively and fairly? The average length of an SFO investigation is currently four years.

The strategy acknowledges the problem, stating “it can require significant time and resource to undertake a thorough investigation and bring a prosecution to court”.  

However, the strategy goes on to say that “the volume of digital material can vastly increase the length of time that investigations can take” and that the disclosure regime needs to be improved to “reduce the risk of cases collapsing during trial and increase the chance of successful prosecution.”

The problem is obvious: scooping up vast troves of digital material means longer investigations and a higher likelihood of disclosure failures, unless the SFO and other agencies have the resources and tools to deal with all of that data.    

Ultimately, the strategy appears to have correctly diagnosed the problems with tackling fraud and has prescribed much of what is needed to solve them. 

The question is whether we have the money to pay for these prescriptions.

Nick Vamos is head of business crime at Peters & Peters