New Fraud Task Force – with Old Fraud Laws

cyber fraud

Recent years have seen a dramatic rise of one area of crime – fraud.

Reported incidents of fraud have risen dramatically in recent years – and that includes just those incidents that have been reported. This is especially so regarding online and cyber fraud.

Fraud was included in the official Crime Survey for England & Wales for the first time in 2015. Figures from 2915 and the beginning of 2016 indicate that average of five million frauds now occur in England and Wales every year. 2015 saw 5.1m frauds carried out, with just over half resulting in financial loss, some significant. That figure includes frauds committed over the phone, online, or involving credit or debit cards, as well as other types of fraud.

From March 2014 to March 2015 230,630 differing fraud offences were recorded by police forces in England and Wales- an increase of 9% from the previous year. A additional 389,718 fraud offences were reported by various industry bodies – an increase of 17% from 2013. A strong indicator of an increasing avenue for fraud, further figures from Financial Fraud Action UK (an agency that coordinates the financial industry’s response to fraud) revealed that losses from online banking fraud rose 48% from 2013 to 2014. Losses from fraud on credit and debit cards totalled £479m in 2014 – this is a rise of 6% from 2013’s figures, and the third consecutive year that total had risen.

Amidst such a startling increase in fraud related offences, the Home Secretary recently announced that a new force will be set up to tackle fraud. The Joint Force Taskforce (JFTF) will seek to better improve communication and cooperation between the police and government agencies, and banks and the financial sector. Amongst its representatives and members, JFTF will include the City of London Police (who always takes the lead investigative role in fraud and related cases), Financial Fraud Action UK, the National Crime Agency (NCA), the Bank of England, Cifas (the fraud prevention agency), and the CEO’s of major banks.

In announcing the formation of the taskforce, Theresa May (Con – Maidenhead) was accompanied by Bank of England Governor Mark Carney. In her speech, she critically stated that “fraud shames our financial system”.

“It undermines the credibility of the economy, ruins businesses and causes untold distress to people of all walks of life… For too long, there has been too little understanding of the problem and too great a reluctance to take steps to tackle it.”

One of the many steps the JFTF will take will be to publish and update a list of the Top Ten Most Wanted Fraudsters. It will also aim to improve intelligence and information sharing between government and the banking sector. Further, national training for bank staff to help identify victims and architects of fraud will be started by the new task force, as will raising awareness amongst the public of simple fraud prevention tactics. In addition to helping those defrauded to get refunds, the task force will also seek to identify weaknesses in IT and related systems which could be exploited by fraudsters.

Despite the very welcome renewed efforts to tackle fraud, a point to note is that fraud is increasing and is changing and evolving to meet and match modern society and technology. However, current fraud related laws are centred around the Fraud Act (2006). The Act was designed to update fraud laws and counter fraud efforts; but in reality, it overcomplicated fraud offences. Bringing a fraud case to court, already complicated in itself, was not helped by the introduction of the Fraud Act nearly ten years ago.

Further to that, the Act is unfortunately essentially now out of date in parts. Inevitably, it is a reflection of its time – the pre cyber age. When it was given Royal Assent, the digital revolution was in full swing, but not at its current stage. It is only in recent years that more services and tasks have moved online (including personal finances and banking). In 2005 and 2006, modern society was not so dependent on online services as it is in 2015 and 2016.Consequently, one of the main pillars of fraud legislation is slightly out of date in places.

The types of fraud, and the detailed aspects of fraud, as outlined in the 2006 Act are not current with modern methods of frauds. Potentially, victims of fraud could be insufficiently protected, or fraudsters could find legal loopholes to escape conviction.

In 2016, police and other investigative agencies need a stronger basis in law for their investigations, and the conduct of their investigations. Police and the relevant authorities need a greater legal basis and scope for their investigations. Essentially, fraud law and legislation needs to be updated to take into account moderns methods and tactics of fraud, to ensure better protection for the public, and to better reflect the cyber and digital age of 2016 and beyond.

Whilst the formation of the new taskforce, coming amidst greater public awareness campaigns and redoubled efforts by law enforcement and anti fraud agencies is very welcome. What is also needed is to address and update the legislation underpinning anti fraud efforts. That would be just as welcome, and just as necessary.