Fraud and the Justice System – House of Commons Justice Committee, Fourth Report of Session 2022-23

Summary

• Not enough is being done prevent fraud, investigate it, prosecute it, nor support victims.
• The current systems have been described as confusing – both for victims of fraud in knowing where to go and who to report to, but also for the police in understanding who has responsibility for what.
• The police themselves are hugely under resourced and under-skilled when it comes to dealing with investigating fraud. Action Fraud has not proved itself to be fit for purpose; it is under resourced and under staffed.  It is due to be replaced in 2024 but its replacement focuses on the technology and needs to focus improvements for the victims’ experience.
• The court system also requires more specialist courts, and specialist judges to help clear the considerable backlog of cases, and changes to the rules of disclosure (in criminal cases), along with sentencing guidelines which take account of the psychological and emotional damage caused to victims, would help deliver better justice, quicker.
• Telecoms giants probably can, and should, do more to prevent and deter fraud, especially around fraudsters procuring victims through paid-for advertising. A ‘failure to prevent’ fraud offence would help hold companies accountable and promote better corporate behaviours.

Key highlights from the report:

Victims

• The current system is confusing for victims, with no clear path of where to go and what to do, if they want to report a fraud. When fraud is reported, those receiving the reports are often not adequately trained to provide the support victims need.  This all adds to an already stressful time for victims.
• Reporting needs to be made easier. By the end of 2023, all 43 police forces in England and Wales should have dedicated victim care units, providing effective support, to a minimum national standard, for victims of fraud.
• Action Fraud has not proven itself to be fit for purpose and is not sufficiently resourced to meet the growing and varied challenges. The Government will replace Action Fraud with a new service in 2024 but at the moment that service has been focussed on improving the underlying technology and analytical tools rather than improving customer experience which needs to be addressed.
• There is a wariness around simply compensating victims because this might give criminal carte blanche to commit their crimes because the victim can be reimbursed. This would still cost the UK economy and millions of banking customers significant loss.  The main focus should be on fraud prevention and education.

Investigating Fraud

• Fraud accounts for 40% of all crimes yet receives only 2% of police funding, and out of 20,000 police officers only 380 are planned to be deployed in the response to fraud. Fraud investigation is under staffed, under resourced and under funded.
• There is confusion between the investigating bodies, over who does what. The Government should ensure that agreements are in place between the City of London Police and the National Economic Crime Centre (who are responsible for the overall approach to combatting fraud) and local police forces, so it is completely clear as to where responsibilities lie and what support is available to those investigating fraud.
• Training for those who deal with victims also needs to improve.

Prosecuting Fraud

• The Government should work with the judiciary to pilot the establishment of economic crime courts, to ensure specialist judges with the right skills oversee these often lengthy and complex cases.
• Consideration needs to be given to whether current disclosure rules (in criminal cases) are causing unnecessary cost and time during prosecution.
• Consideration of updating sentencing guidelines should be given as currently they do not take adequate account of psychological and emotional harm caused to victims.

Disrupting and Preventing Fraud

• Telecommunications giants are expected to be able to do more to protect their customers, particularly to prevent fraudsters using paid for advertising. They have a huge role to play in “designing fraud out of their systems”, to help prevent fraud occurring in the first place.
• Social media and tech companies should put in place a charter setting out their commitments and responsibilities and the Government should hold them to account.
• A ‘failure to prevent’ fraud offence should be brought in to help hold companies to account and promote better corporate behaviours.
• Key to prevention is public awareness and the Government needs to run a national campaign to support this.

Conclusion

More can be done, and needs to be done to prevent, investigate and prosecute fraud but there seems to be a growing appetite to explore how Government can bring about the changes needed.  It would be good to see some further focus on how the civil justice system might also play a bigger part, but that is perhaps for a different day and a different report.  This report at least feels like it is driving momentum in the right direction and pushing fraud higher up the Government agenda.

The Full report can be downloaded here.

Author: Laine Atcheson