Government Response to House of Lords firmly saying more needs to be done to combat fraud
On 12 November 2022 the House of Lords Fraud Act 2006 and Digital Fraud Committee published their report “Fighting Fraud: Breaking the Chain” (the “Report”). The Report can be downloaded here.
Arun Chauhan of Tenet was one of the witnesses giving evidence to the Committee in his role as a trustee of the Fraud Advisory Panel. Arun says that the Report should be the wake up call the Government need to realise how damaging fraud is for consumers and businesses.
The Detail
A link to Tenet’s article on the key points of this report can be found here.
This article discusses the Government’s response on the Report’s proposals which was published on 9 March 2023. The full response can be downloaded here.
The Government confirmed that the report had highlighted several important areas for attention and how it intended to address these issues. The responses to the 6 key issues highlighted in the Report are detailed below.
| Key Recommendations in Report | Government response to key recommendations | |
| 1. | To establish a new cabinet-level subcommittee to tackle fraud | Highlighted the Joint Fraud Taskforce. The Security Minister chairs the Taskforce which brings together all relevant government departments, law enforcement partners, charities, regulators and private sector stakeholders |
| 2. | Fraud to be written into the Strategic Policing Requirement (SPR) | The Home Office had worked with policing partners to shape a revised version of the SPR, now published, giving fraud greater prominence. |
| 3. | Introduction of a new corporate criminal offence of ‘failure to prevent’ | The current law on corporate criminal liability does not adequately hold organisations and their senior persons to account for offences and was working to determine a case for strengthening the law on corporate criminal liability. It was committed to addressing the need for a new failure to prevent fraud offence through the Economic Crime and Corporate Transparency Bill. Also highlighted the Online Safety Bill and the creation of a duty on social media and search engine companies to put into place systems and processes to prevent fraud on their platforms. |
| 4. | A single centrally funded consumer awareness campaign | Agreed with the importance of raising public awareness of the issue of fraud. Established a new public engagement team at the National Economic Crime Centre (NECC) and the National Crime Agency (NCA). Its new fraud strategy would set out how they are expecting industry to do more to block frauds in the first place. |
| 5. | Online Safety Bill to be urgently reintroduced to Parliament, with amendments on fraudulent advertising aimed at platforms of all sizes | Agreed that companies must take preventative steps to tackle fraudulent advertising. Outlined a duty contained in the bill that would be imposed on the largest social media platforms and search engines to take proactive steps to prevent fraudulent adverts on their services. |
| 6. | A delay for certain high-risk payments | Highlighted the Payment Services Regulations 2017. Under these regulations, banks and other payment service providers must ensure payments are credited to the receiving account by the end of the next working day. It was investigating amending legislation to enable payment service providers to delay payments beyond these timescales in limited, high-risk fraud scenarios. |
Furthermore, the Government published its Fraud Strategy on 3 May 2023, here in which it aims to reduce fraud by 10% on 2019 levels by December 2024.
Protecting people is at the heart of the response and it outlined a number of actions it would be taking. The Government said that it had already committed £100 mn of new money to bolster law enforcement in the fight against fraud as part of a wider £400mn investment in tackling economic crime.
Should your organisation like to understand more about the Report and the Government response and its implications for your business and how to improve your approach to preventing and responding to fraud, please do not hesitate to get in touch at hello@tenetlaw.co.uk
