Government launch inquiry to tackle 'avalanche' of fraud

Legal experts have asked whether the inquiry will lead to 'meaningful change'

Following a significant increase in reported cases of fraud, the Justice Committee has announced a new inquiry into the criminal justice system’s approach to combatting this type of crime.

During formal evidence sessions set to start in the new year, the committee will consider how fraud convictions are investigated and prosecuted in the courts and assess the likely impact of new strategies, including the Government’s fraud action plan for 2022 - 2025 and the Crown Prosecution Service’s (CPS) economic crime strategy. It will also investigate the experiences of victims and the impact fraud has had.

It is reported fraud accounts for approximately half of all crimes committed and could cost the UK over £137bn a year. Fuelled by the increased use of online platforms during the pandemic, there was a 285 per cent rise in online fraud in the first half of 2021, such as phishing and text scams.

Fraudsters often target the vulnerable and can cause serious harm to victims. Consumer champion Which? calculated 350 people a week were victims to a fraud that left them in severe emotional distress. Victims do not always get their money back and the long-term financial consequences can be severe.

The government has acknowledged that prosecuting fraud cases can be “complex, expensive and time-consuming” and that a historic lack of resources dedicated to tackling fraud means “much work is needed”. It reports that only 3 per cent of incidents reported to Action Fraud result in a charge or summons and fraud cases benefit from as little as 1 per cent of dedicated police resources.

The Justice Committee has requested written submissions on the following areas:

·       How the Justice System conducts fraud investigations and prosecutions;

·       The roles of the CPS and the Serious Fraud Office in the prosecution of fraud;

·       The experience of the impact and prosecution of fraud among those working in the legal system and victims of fraud;

·       Plans to tackle rising instances of fraud, particularly the rise of fraud facilitated online;

·       The prosecution of frauds that are not of sufficient scale to be investigated by the Serious Fraud Office;

·       Problems with evidence and disclosure in the prosecution of fraud cases;

·       What can be done to make it easier to investigate frauds conducted on the UK public from abroad;

·       Progress in relation to the Government’s Fraud Strategy and the Crown Prosecution Service’s Economic Crime Strategy.

Chair of the Justice Committee, Sir Bob Neil MP commented: "Being a victim of fraud can have terrible consequences, leaving people feeling duped and vulnerable, having lost life changing sums of money. The ever-increasing use of online platforms, particularly during the pandemic, has seen a huge increase in cases of fraud while making it easier for criminals to operate across borders.

“We have launched this inquiry to understand what more the criminal justice system can do to combat and prosecute this form of crime. We will examine if current approaches are doing enough to support victims and look at what more can be done to bring criminals to justice.”

Louise Hodges, head of criminal litigation at Kingsley Napley, has questioned whether the inquiry will lead to real change: "This new Inquiry shows the Government recognises increasing levels of fraud is a real problem requiring attention, especially those facilitated by online platforms and cybercrime. 

“Whether the call for evidence will lead to meaningful change, however, is debatable. The Action Fraud debacle highlighted the difficulties of effective response to the avalanche of reported frauds, let alone the resourcing of proper investigation and prosecution of them”. 

Hodges added: “Several different agencies have been focusing on this area in recent years and the increase in online fraud has already featured in many reports and action plans – for example, the NCA Action Plan for 2020 - 1 referred to a whole system approach to ‘reduce the harm from economic crime to individuals, the UK Economy and its Institutions, tackling fraud, money laundering and cybercrime’.  

“Yet we have seen a reduction in regional and local fraud squads with specialism in lower level of frauds lost and investment in expertise to combat online fraud not keeping pace with the reality. We can no doubt expect the proliferation of such frauds in the run up to Christmas”. 

Hodges highlighted that the call for evidence has a very short turnaround, with responses required by 17 January 2022, and that responses are restricted to 3,000 words. 

She said: “Regardless of the timeframe and depth of response, I imagine it will be a challenge to find any solutions that do not involve investment. As with all areas of the criminal justice system at the moment, quick fixes are tricky. It is sustained and meaningful investment to keep pace with the criminal community and to bring perpetrators to justice that is required.”