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Whilst effective criminal prosecution lies at the heart of the response to those who commit fraud, law enforcement cannot simply arrest its way out of this problem, says Jonathan Fisher KC, Chair of the Independent Review of Disclosure and Fraud Offences, whose second report, ‘Fraud in the digital age’, has been released by the Home Office. In a foreword he writes: “More imaginative measures need to be taken. The thread which connects the 47 recommendations is the principle that the time for tolerating latitude towards fraud has long gone. In the battle against fraud today, zero tolerance is the name of the game.”
While he admits the authorities have ‘no silver bullet’, he adds that the recommendations made in this Review ‘will refresh the weaponry in the anti-fraud armoury and introduce new measures appropriate to fighting fraud in a digital age’. Setting out the landscape, the review describes fraud as ‘perpetrated with unprecedented speed and reach, and with minimal personal risk to the offender. Entrenched domestic obstacles, including a criminal justice system that is regrettably ill-equipped to respond with the necessary agility, only exacerbates matters. As a result, there is little to deter offenders.’ The report calls for ‘a whole-system response that combines robust enforcement with upstream prevention, corporate responsibility and international cooperation’. Otherwise, it warns of a future ‘where fraud becomes endemicโeroding public trust, undermining autonomy and prosperity, and compromising the rule of law’.
Recommendations
Among the recommendations is a new corporate criminal offence for providers of regulated user-to-user services (as defined under the Online Safety Act 2023) who fail to prevent fraud on their platforms. This offence would mirror the recently introduced โfailure-to-preventโ fraud offence under the Economic Crime and Corporate Transparency Act 2023. Other new offences proposed are of identity-based impersonation, defined as the use of another personโs personal details or identity for the purpose of committing fraud; and Deed Poll Abuseโchanging oneโs name through the deed poll process with the intent to commit a fraud. As for the UK police’s Report Fraud service (previously the much unloved Action Fraud), the review says that ‘should publicly commit to a 14-day service standard, ensuring that every victim receives a clear update on the status of their report’. The review calls for a statutory framework to intelligence sharing within publicโprivate partnerships focused on tackling economic crime. Until such a framework, the review proposes ‘a single memorandum of understanding between public bodies setting out how data and intelligence can be shared’. Fisher calls on the UK to ‘take the lead in developing a protocol to the United Nations Convention against Cybercrime, ensuring fraud is recognised as a priority’. As for the UK official โStop! Think Fraudโ public awareness campaign, Fisher asks that it be targeted ‘to better protect high-risk regions and vulnerable demographics’. A cross-Government Fraud Lead (โFraud Czarโ) is proposed, a ‘senior figure’ to ‘drive strategic coordination and accountability’.
Courts
Among recommendations to do with the court system, the review suggests a ‘fraud-specific civil protective order regime’, whereby magistrates could ‘impose tailored restrictions on individuals suspected of minor fraud’. Also suggested, a trial of restorative justice for fraud cases, ‘to be used only where it is assessed as appropriate and pursuant to clear criteria, and where both the offender and the victim provide informed consent’.
Literacy
As for preventing such crime, the review calls for ‘financial literacy’. The watchdog the Financial Conduct Authority (FCA) ‘should work with consumer banks to introduce mandatory educational learning for individuals under 18 years old before they can open an account. This could take the form of a short video or interactive session delivered via a mobile application, which explains the risks of fraud, scams, and money muling.’
Foreword
In a foreword to the 280-page document, Jonathan Fisher describes fraud as ‘the criminal scourge of our age’, that has ‘grown exponentially’ in the last 20 years. For the document visit https://www.gov.uk/government/publications/fraud-in-the-digital-age. For the first report by the review, about disclosure in the digital age, see https://www.gov.uk/government/collections/independent-review-of-disclosure-and-fraud-offences.
Call for evidence
Meanwhile the Home Office is making a ‘call for evidence’ about unauthorised fraud – defined as when fraudulent transactions are made without the victimโs knowledge or consent (unlike fraud where the victim is deceived into making the transaction).
