May 2023
CP 839
Fraud Strategy: Stopping Scams and
Protecting the Public
Presented to Parliament
by the Secretary of State for the Home Department
by Command of His Majesty
May 2023
CP 839
© Crown copyright 2023
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Contents
Foreword 1
Executive summary 3
The harm fraud causes 7
Pillar 1: Pursue fraudsters 14
Pillar 2: Block fraud 26
Pillar 3: Empower people 37
Enhance key international and domestic capabilities 43
Delivery: how we will make this happen 48
Annexes 51
Annex 1: Links with other government strategies 51
Annex 2: Geographic scope 54
Annex 3: Cost of fraud methodology 56
Glossary 64
The Fraud Strategy
1
Foreword
The publication of this strategy marks a fundamental shift in our
approach to tackling fraud. Fraud causes severe harm to the
economy, places enormous stress on families and businesses, and
ruins people’s lives. Fraud also funds other serious crimes. This
Government will not tolerate the barrage of scam texts, phone calls,
adverts, and emails that causes misery to millions and makes up
over 40% of all crime. This strategy sets out a plan to stop fraud at
source and pursue those responsible wherever they are in the
world.
Most importantly, victims must know that the police will do something about their crime.
Fraud now accounts for over 40% of crime but receives less than 1% of police resource. I
am changing this by setting up a new National Fraud Squad (NFS) dedicated to pursuing
the most sophisticated and harmful fraudsters, with over 400 new specialist investigators,
and making tackling fraud a priority for police forces in England and Wales.
I also want victims to get the help they need. With money such a concern for so many,
ensuring that victims get their money back quickly is vital. We will soon have the powers to
make sure that payment service providers are treating customers fairly. We are replacing
Action Fraud, the fraud and cyber reporting service, to ensure that victims can report
The Fraud Strategy
2
frauds to the police more easily, get more support and information about their case, and to
provide police forces with better information to catch more fraudsters.
Industry can do more to protect its customers, our citizens and businesses. The financial
sector has worked with us for a long time on fraud. Whilst I welcome their continued
efforts, I challenge them to go further. But it is other industries, especially online
technology giants, who should do more to stop criminals exploiting their services and
should never profit from online crime. We will publish information about which platforms
are the safest and ensure that companies are properly incentivised to combat fraud,
exploring all avenues to do this. The Online Safety Bill will also ensure that internet users
are better protected from fraud online - and I encourage companies to start acting now to
prepare for the new regime.
Fraud is not only a problem in the UK. Working with allies abroad, we will pursue
fraudsters across the globe. I will hold a summit next year to set up a new international
partnership to stop frauds wherever we can. To further drive our response, Anthony
Browne MP has been appointed into the new role of the Prime Minister’s Anti-Fraud
Champion.
I would like to thank the Public Accounts Committee; Treasury Select Committee; Justice
Select Committee; Lords Fraud Act and Digital Fraud Committee; and the National Audit
Office for their considered reports, which provided insightful and constructive
recommendations that have helped shape this strategy.
Government, law enforcement, and industry must now come together and do all we can to
show fraudsters that their time is up and that together we can beat fraud.
Rt Hon Suella Braverman KC MP
Home Secretary
The Fraud Strategy
3
Executive summary
Fraud poses a significant threat to the people, prosperity, and
security of the UK. It is by far the most common crime and now
accounts for over 40% of all offences in England and Wales.
1
This
strategy will tackle fraudsters head on and cut fraud by 10%,
protecting the British people’s hard-earned cash from criminals and
putting more fraudsters behind bars.
1. Predatory criminals take money out of the pockets of hard-working people,
businesses, and organisations – callously targeting the most vulnerable,
online and in their own homes. And fraudsters are becoming more devious –
we see many more victims who have been emotionally manipulated to lower
their defences. The high volume and severity of the fraud risk threatens our
national and economic security, enabling terrorism and organised crime, as
recognised by the Government’s 2021 Integrated Review of Security,
Defence, Development and Foreign Policy. The Integrated Review Refresh
2023 recognises the importance of the Fraud Strategy in stopping the
exploitation of the UK’s financial systems and economic openness for
criminality and corruption.
2. It is imperative we take urgent action to crack down on the ruthless criminals
behind these cold-hearted crimes. Bank accounts can be emptied in minutes
and life savings lost – victims reported losing £2.35 billion in 2021.
2
Fraud
also causes enormous emotional harm and, in some heart-rending cases,
results in people taking their own lives.
3. This strategy sets out how government, law enforcement, regulators, industry,
and charities will work together to cut fraud incidents by 10% from 2019 pre-
Covid levels by the end of this Parliament. We will put protecting people at the
heart of our response.
1
As of the year ending December 2022. Crime in England and Wales: Appendix tables - Office for National
Statistics (ons.gov.uk): Table A1.
2
National Fraud Intelligence Bureau (NFIB) Annual Assessment: Fraud crime trends FY 2020-2021.
The Fraud Strategy
4
4. We have already started by committing £100 million of new money to bolster
law enforcement in the fight against fraud as part of a wider £400 million
investment in tackling economic crime.
5. We will stop fraudsters from trying to make victims of us all. We will:
▪ Ban cold calls on all financial products so fraudsters cannot dupe people
into buying fake investments.
▪ Ban SIM farms which are used by criminals to send thousands of scam
texts at once.
▪ Review the use of mass text aggregators and explore next steps to stop
fraudsters from being able to send scam texts in bulk messages.
▪ Stop more scam calls by making it harder for fraudsters to ‘spoof’ UK
numbers to make it look like they are calling from a legitimate UK
business.
▪ Stop people from hiding behind fake companies and create new powers to
take down fraudulent websites.
6. We will make it much easier to report scams. We will:
▪ Replace Action Fraud with a state-of-the-art system for victims to report
fraud and cyber crimes to the police.
▪ Work with industry to make sure that intelligence is shared quickly with
each other and law enforcement and that action is taken early to stop
frauds.
7. We will ensure victims of fraud are reimbursed and supported. We will:
▪ Change the law so that more victims of fraud will get their money back.
▪ Overhaul and streamline fraud communications so that people know how
to protect themselves from fraud and how to report it.
8. We will improve the law enforcement response to fraud. We will:
▪ Launch a new National Fraud Squad with over 400 new specialist
investigators, and make fraud a priority for the police.
▪ Deploy the UK Intelligence Community and lead a new global partnership
to relentlessly pursue fraudsters wherever they are in the world.
▪ Put more fraudsters behind bars through better investigation and
prosecution processes for fraud and digital offences.
9. We will make sure every part of the system is incentivised to take fraud
seriously. We will:
▪ Make the tech sector put in place extra protections for their customers and
introduce tough penalties for those who do not through the Online Safety
Bill.
▪ Ensure large tech companies make it as simple as possible for users to
report fraud on their platforms, within a few simple clicks.
The Fraud Strategy
5
▪ Shine a light on which platforms are the safest, making sure that
companies are properly incentivised to combat fraud.
10. There are also key cross-cutting themes we will tackle, including working
internationally, improving data sharing across and beyond government, and
tackling the problem of money mules (a type of money laundering used by
fraudsters).
11. Key actions in the Strategy are below:
The Fraud Strategy
6
The Fraud Strategy
7
The harm fraud causes
In the year ending December 2022, 1 in 15 adults were victims of
fraud.
3
18% of those victimised became victims more than once.
4
The sums of money involved are staggering. The total cost to
society of fraud against individuals in England and Wales was
estimated to be at least £6.8 billion in 2019-20.
5
This includes the
money lost by victims, the cost of caring for victims, and the costs of
recovery, investigation and prosecution of fraudsters. Further detail
on the cost of fraud can be found at Annex 3.
12. In the year ending March 2021, Action Fraud received victim reports totalling
a loss of £2.35 billion.
6
Industry reporting suggests average personal losses
for authorised frauds (these are frauds where the victim has approved a
payment) could be almost £3,000.
7
In some instances, victims can lose
hundreds of thousands of pounds. When people become victims of fraud
multiple times their losses escalate rapidly. The Crime Survey for England
and Wales (CSEW) also provides a view of the value individuals lost to fraud
seen in figure 1 below.
13. There is also considerable cost to business and enterprise. UK Finance, the
trade body for the banking and finance industry, reported that in 2021 its
members lost over £1.3 billion to fraud, increasing costs for everyone who
uses banking services. We also know from the Economic Crime Survey
8
that
in 2020 around one in five businesses had been a victim of fraud in the
previous three years (18%).
3
Crime in England and Wales: Appendix tables - Office for National Statistics (ons.gov.uk): Table A3.
4
Crime in England and Wales: Annual trend and demographic tables: D7
5
The Economic and Social Costs of Crime 2022. This figure estimates wider costs to society including
preventative spending, emotional harms and the law enforcement response to fraud committed against
individuals. Please refer to Annex 3.
6
Action Fraud. Fraud Crime Trends 2020-21. Fraud and cyber crime national statistics | Action Fraud
7
UK Finance Annual Fraud Report 2022 (p47 taking Value/Volume)
8
Economic Crime Survey, Home Office, 2020.
The Fraud Strategy
8
14. Figure 1 shows 36% of fraud incidents lead to no financial loss (as the fraud
has been attempted, but has not been successful), however many result in
high value losses. Over 250,000 incidents (6%) lead to losses above £1,000.
9
Total fraud losses are largely driven by high value incidents. Despite losses
above £10,000 only making up 0.5% of incidents, they are estimated to make
up 29% of total financial losses from fraud.
9
CSEW Nature of Fraud & Computer Misuse, YE Mar 22
Figure 1 – Distribution of fraud losses, England & Wales
Figure 2 – Estimated change in proportion of authorised/unauthorised frauds
The Fraud Strategy
9
15. Figure 2 shows the nature of fraud is changing.
10
Historically the main form of
fraud was unauthorised fraud, which is predominantly bank and credit card
related, where money is taken from victims’ bank accounts without their
authorisation or knowledge. Now, as banks have improved their technology to
prevent this type of fraud, the criminals are adapting. As shown above in
Figure 2, in the last two years there has been a significant swing towards
authorised fraud, where victims are persuaded by the fraudster to authorise a
payment themselves – common examples include retail scams, romance, and
investment fraud, but there are many other forms.
16. The harms experienced by victims go beyond just financial loss. According to
the CSEW, in the year ending March 2020 almost three quarters of victims
experienced some sort of emotional impact.
11
Action Fraud deal with over
300 calls a year where someone is judged to be at risk of suicide.
17. The volume of fraud, its capacity to undermine public confidence in the rule of
law, and its potential negative effect on the UK’s financial reputation, means it
should be considered a national security threat. Correspondingly, the
importance of tackling fraud to stop the exploitation of the UK’s financial
systems was recognised in the 2023 refresh of the Integrated Review of
Defence, Security and Diplomacy. The Royal United Services Institute has
also identified evidence that fraud has funded terrorist activity. For example,
militants have committed frauds on UK victims to fund their participation in the
Islamic State in Syria.
12
18. There is also evidence showing direct links between fraud and other serious
and organised crime, such as modern slavery, human trafficking and drugs.
One study found two-thirds of organised crime groups focussed on frauds are
also involved in other criminal activities.
13
What is fraud?
19. A fraud involves an act of dishonesty, normally through deception or breach of
trust, with the intent to either make a gain or cause a loss of money or other
property. The term ‘fraud’ is an umbrella term for crimes that vary in nature. In
England, Wales, and Northern Ireland most offences come under the Fraud
Act 2006. In Scotland most frauds are common law offences.
10
CSEW data was used to approximate the proportion of authorised and unauthorised frauds. The following
fraud types were classified as being indicative of unauthorised frauds: Consumer phone fraud, Cheque,
plastic card and online bank accounts (not PSP), Dishonestly retaining a wrongful credit, Other fraud (not
covered elsewhere)
11
Nature of crime: fraud and computer misuse. YE March 2020 (most recent year this data was collected)
12
RUSI: The Silent Threat
13
Michael Levi, ‘Organized Fraud’, in Letizia Paoli (ed.), The Oxford Handbook of Organized Crime (Oxford:
Oxford University Press, 2014), p. 462
The Fraud Strategy
10
20. Fraud is the largest crime type and levels have grown in recent years. In the
year ending December 2022, there were an estimated 3.7 million incidents of
fraud in England and Wales – over 40% of all crime. Fraud levels spiked
during the Covid pandemic, growing to over 5 million incidents in the year
ending December 2021.
14
14
Crime in England and Wales - Office for National Statistics (ons.gov.uk) Appendix Table 2
Figure 3 – Fraud as a proportion of all crime in 2021/22
Figure 4 – Incidents of Fraud 2016/17 to 2021/22 from Crime Survey England and Wales
The Fraud Strategy
11
Technology-driven increase
21. The UK is already an attractive target for fraudsters. City of London Police
(CoLP) estimates that over 70% of fraud either originates abroad or has an
international element.
15
The financial sector has advised that UK individuals
and businesses are a more attractive target for fraud because of our relative
wealth, the universality of the English language, our rapid adoption of online
technology such as internet banking and online shopping, and the fast and
frictionless nature of our payment systems.
22. It is this adoption of new technologies by consumers, businesses and
fraudsters that is almost certainly the main driver of recent increases.
23. Advances in technology provide fraudsters more access to victims and data:
▪ As more and more data is held online, large scale data breaches enable
fraudsters to access and use stolen personal information to commit their
frauds.
▪ Availability of bulk communications, such as text messaging services,
allow fraudsters to target thousands of people at once. Number ‘spoofing’
allows fraudsters to impersonate a legitimate UK number or business and
trick people into answering calls they might otherwise ignore.
▪ The emergence of new artificial intelligence large language models such
as ChatGPT and clever machine learning tools allows fraudsters to target
and tailor their scams to be more effective.
24. Consumers and citizens are spending more time online and online business
models are proliferating. Whilst there have been revolutionary opportunities
for our economy afforded by this shift, these have also been seized upon by
fraudsters. Most frauds are now perpetrated – or facilitated in part – online,
with online platforms (such as social media) and messages being the most
common form of contact by fraudsters.
16
25. Fraudsters are likely to become ever more adept at harnessing technology
and identifying vulnerabilities, making frauds much harder for victims to spot.
Technological advances, such as deep-fakes
17
and increasingly immersive
online environments,
18
can leave users more vulnerable and give rise to new
types of fraud-related threats by presenting fake people or information in a
way that is impossible to distinguish from the real thing.
15
International Fraud Offending Recorded on Action Fraud: Professional estimation of international
fraud offending by NFIB February 2022
16
Fraud Crime Trends. According to Action Fraud over 83% of reported fraud is cyber enabled. Social
media and encrypted messaging services as an enabler is increasing throughout all aspects of fraud.
17
See Glossary
18
See Glossary
The Fraud Strategy
12
26. There are new dimensions to the threat. The US Federal Bureau of
Investigation have seen North Korea’s state-backed hackers attempt to
acquire cryptocurrency through fraud and cyber crime.
19
With the proliferation
of complex cyber crime technologies, this overlap between national security
and criminal threats will only increase.
Scope of this strategy
27. This is a cross-government strategy that covers fraud where the victims are
members of the public or businesses. The response to fraud against the
public sector is led by the Public Sector Fraud Authority (PFSA) who work
with fraud professionals across government departments and public bodies to
prevent fraud, reduce harms and ensure public services go to those most in
need. Their Mandate can be found on GOV.UK. The PSFA will publish a
Four-Year Functional Strategy that will set out central government's response
to fraud against the public sector. We are coordinating these strategies and
work closely together, sharing data and techniques to reduce the threat to the
public, businesses and the public purse.
28. In 2019, the Government and the private sector agreed an Economic Crime
Plan (ECP), setting out actions across both the public and private sectors to
tackle the growing threat to national security from economic crime. The
second ECP was published this year, setting out the whole-system response
to tackle all economic crime including money laundering and illicit finance. It
set out the overarching approach, under which this strategy sits, as well as
the commitments made through the recent review of the UK’s Anti Money
Laundering and Counter-Terrorism Financing regulatory and supervisory
regime. The Government is also developing a successor to the national Anti-
Corruption Strategy 2017-2022, which will address broader economic crime
related corruption.
29. Fraud intersects with other policy areas including cyber crime and security,
digital policy, identity policy and many more. The relationships between this
strategy and other related strategies are set out in Annex 1.
Geographic scope
30. This strategy will have material positive outcomes for all four nations of the
UK. Both the UK government and the devolved administrations are committed
to combatting fraud. We will continue to ensure that collective issues are
addressed collaboratively to maintain the resilience of the UK against fraud. A
breakdown of geographic scope can be found in Annex 2.
19
Three North Korean Military Hackers Indicted in Wide-Ranging Scheme to Commit Cyberattacks and
Financial Crimes Across the Globe | OPA | Department of Justice
The Fraud Strategy
13
31. Fraud does not respect national borders and this strategy sets out how we will
build international consensus for greater action to tackle fraud, as well as to
drive forward operational activities with key partner countries to clamp down
on fraudsters.
Our new approach to stopping fraud and scams
32. A new approach is needed to keep the public safe and reduce the national
security threat. We will take an end-to-end approach to cut fraud by 10% by
the end of this Parliament, with three key elements:
▪ We will pursue fraudsters, disrupting their activities and bringing them
to justice more often and quicker.
▪ We will block frauds at source by dramatically reducing the number of
fraud and scam communications that get through to the public.
▪ We will empower the British people to recognise, avoid and report
frauds and equip them to deal easily and appropriately with frauds that
do get through.
The Fraud Strategy
14
Pillar 1: Pursue fraudsters
The criminal justice system must ramp up the focus it gives to fraud.
Modern technology has made it increasingly easy to commit fraud
from overseas, frustrating traditional policing methods and impeding
our ability to bring fraudsters to justice. We must counteract this,
taking on fraudsters more swiftly and putting more of them behind
bars. We are investing £100 million to improve the law enforcement,
intelligence community and criminal justice system response,
preventing over 300,000 more frauds by the end of this Parliament
through Pursue interventions alone.
33. As the sophistication and complexity of fraud has increased, prosecuting
fraud has become correspondingly much more challenging. Multiple external
reviews of the police response to fraud have emphasised the difficulties that
the police face. Recent crime statistics show that we continue to see a
marked decrease in the number of defendants taken to court for fraud.
20
The
UK is not alone in this as similar trends are reported by international
partners.
21
We are reprioritising and increasing our investment in how we
tackle fraud to deliver better outcomes for victims.
34. We must focus our efforts on disrupting the frauds, fraudsters and enablers
that have the greatest impact. To do that we must use all the resources at our
disposal, including deploying our highly capable intelligence community and
international relationships, investing £100 million in our law enforcement
response over the spending review period (Y/E 24/25). We must also make
sure that the law keeps up with fraudsters, who exploit any loophole they can
to get away with their crimes. We will base this on the clear division of
responsibilities that are already in place:
▪ Home Office are the overall policy and strategic system lead on fraud
against individuals and businesses.
20
MOJ Outcomes by Offence Tool, Criminal Justice System statistics quarterly: June 2022 - GOV.UK
(www.gov.uk)
21
International criminal justice statistics: Australia, United States of America, Canada, New Zealand
The Fraud Strategy
15
▪ The National Crime Agency (NCA), through the National Economic
Crime Centre (NECC), are the operational system lead working across
UK law enforcement, the intelligence community and industry.
▪ The City of London Police (CoLP) lead and coordinate the efforts of
Regional Organised Crime Units (ROCUs) and 43 police forces in
England and Wales (in their role as the National Lead Force for fraud).
▪ Local police forces across the UK and ROCUs in England and Wales
will continue to be responsible for the vast majority of fraud
investigations in the UK, as well as leading on support for victims and
businesses in their local areas.
▪ The Serious Fraud Office (SFO) will continue to use their specialist
investigatory structures and powers to tackle highly complex frauds.
Figure 5 – the law enforcement response to fraud
The Fraud Strategy
16
Create a National Fraud Squad
▪ Launch a new National Fraud Squad that will investigate and disrupt more
fraudsters targeting individuals and businesses, with over 400 new specialist
investigators across NCA, CoLP and ROCUs.
▪ Make fraud a priority for police forces through the Strategic Policing
Requirement.
▪ The NECC and CoLP will launch a new People Strategy to improve
recruitment and retention in fraud law enforcement.
▪ Home Office and the College of Policing (CoP) will review overall police
training in digital skills.
▪ Bring expertise together, across sectors, to define practices, standards and
develop capability of those working to counter fraud, through the
development of and alignment to the Counter Fraud Profession.
▪ Undertake a review of fraud law enforcement, assessing the impact the
additional posts have made and whether more substantial structural reform is
needed.
▪ Deliver additional powers to seize and recover criminal crypto assets through
the Economic Crime and Corporate Transparency Bill.
Boost resources
35. We are boosting the wider law enforcement response by establishing a new
National Fraud Squad (NFS). The Squad will take a proactive intelligence-led
approach and focus on high-end frauds and organised crime. The Squad will
work alongside the Serious Fraud Office (SFO) and collaboratively with the
wider fraud ecosystem, to ensure that complex fraud cases are investigated
by the most appropriate agency.
36. The NFS will be made up of over 400 new posts across policing and the NCA
by 2025 alongside existing resources. Jointly led by the NCA and CoLP, the
NFS already has 300 new and existing investigators in post. A further 100 will
be in post by January 2024, followed by another 100 by 2025. The NFS will
use covert and overt intelligence gathering capabilities to identify and target
the worst offenders domestically and overseas. This is an improvement on
current reactive approaches based on victim reporting, which makes it difficult
to identify and deal with the key perpetrators. New teams in the NECC, CoLP
and UK Intelligence Community (UKIC) will work together to share intelligence
in real-time to drive enforcement action across government and the private
sector.
37. This is the first significant investment to address fraud since 2008. The NFS
will transform how we identify, disrupt and prosecute fraudsters. Alongside a
new fraud targeting cell in the NCA, every ROCU will have a dedicated fraud
The Fraud Strategy
17
investigations team. CoLP, as the national lead police force for fraud, will
increase its view across wider policing’s activity on fraud, disseminating
intelligence, promoting best practice and holding forces to account for
delivery. Given the rapidly growing and complex threat that fraud poses, it is
critically important there is a whole-system response.
38. There are other key steps that the Home Office will take. We will increase
ministerial oversight of policing on fraud and raise the priority of fraud in key
strategic policing documents. The new Strategic Policing Requirement (SPR),
which sets the capabilities the Home Secretary wants forces to have, gives
greater prominence to fraud, which is captured within the serious and
organised crime threat. For the first time, it specifies the capabilities that each
force should have in place to tackle fraud. The document outlines how forces
can better use NCA capabilities and capabilities offered by CoLP as the
National Lead Force, Action Fraud and the Economic Crime Academy. The
SPR will focus resourcing and efforts to tackle fraud and maximise the output
of existing resourcing, especially at local force level.
39. Local Police and Crime Commissioners are putting greater focus on fraud.
For the first time, every Police and Crime Plan that sets local priorities in
England and Wales mentions fraud. We are also reviewing how police forces
report outcomes against crimes to the Home Office. We want to recognise the
disruptive and preventative activity forces carry out with enablers (such as
social media sites) and victims (to prevent them falling victim again) that
reduce the ability of fraudsters to operate.
40. We will continue to ensure that all government levers that can tackle fraud are
available to law enforcement. There are many different organisations in the
public and private sectors that play a crucial role in tackling fraud, with
differing responsibilities in how they respond to the fraud threat. The SFO, the
Financial Conduct Authority (FCA), National Trading Standards (NTS) and
other enforcement bodies can provide crucial interventions to stop fraudsters
themselves and work with police and the NCA on their investigations.
Building digital skills and capabilities for the future
41. Police and investigators need the digital skills and capabilities that will deliver
as criminals get better at exploiting technology to commit fraud on a large
scale. This starts with the fundamentals provided by the CoP to all police
officers and investigators. CoLP and the NECC are developing a People
Strategy. As well as immediate recruitment and retention challenges, it will
address longer term issues by offering new and innovative routes into
economic and cyber crime roles. This will include education and enhanced
use of Special Constables and Police Support Volunteers.
The Fraud Strategy
18
42. We are also exploring avenues to draw on the counter-fraud skills contained
within the broader public sector, as well as the private sector. We will look for
opportunities to exchange people and skills through the CoLP/NECC People
Strategy. We will also build on the success of the Government Counter Fraud
Profession, launched in 2018, with c.7,000 members across 59 organisations
including the SFO, HMRC and CoLP. The Public Sector Fraud Authority,
which the Profession operates from, will introduce a licence to operate model
for members to assure the skills and knowledge of those working to counter
fraud.
More intelligence-led disruption
▪ Deploy the UK Intelligence Community, through a new fraud focused unit, to
better understand the international threat and utilise global partnerships to
stop fraudsters wherever they are in the world.
▪ Establish a new multi-agency fraud targeting cell in the NCA.
43. CoLP estimate that over 70% of fraud experienced by UK victims could have
an international component - either offenders in the UK and overseas working
together, or fraud being driven solely by a fraudster based outside the UK. In
2016, almost half of reported fraud and cyber crimes were estimated to be
committed by organised crime groups.
22
44. New investigative capabilities will be driven by better intelligence to identify
serious organised crime groups carrying out fraud. Using their world-leading
capabilities and international relationships, UKIC will build an understanding
of the threat, identify novel interventions for public and private partners, and
work with law enforcement to disrupt fraudsters anywhere in the world who
target UK citizens, stopping frauds from reaching them.
45. The NECC will establish a multi-agency fraud targeting cell that draws on all
source data to improve system-wide understanding of the threat and produce
high quality intelligence packages. As a result, collective resources will be
directed to where they will have greatest impact.
46. As well as diplomatic and multilateral efforts, we are looking at where we can
make a practical difference by joining up with partners worldwide. This
includes building relationships with operational partners in countries that,
because of their lack of opportunity, infrastructure or global connections,
enable the most fraud in the UK.
22
Police Foundation Organised Fraud in Local Communities Briefing (police-foundation.org.uk)
The Fraud Strategy
19
Case study
In November 2022, a multi-agency and international law enforcement operation took down
a facility that fraudsters had used to target 200,000 victims in the UK alone. This was the
UK’s biggest fraud operation to date and an example of the sort of operations of which our
strategy will deliver more.
Led by the Metropolitan Police Cyber Crime Unit - working with international law
enforcement, including the National Crime Agency and authorities in the US and Ukraine -
the iSpoof website was taken down. This website was used by fraudsters to impersonate
genuine banks to acquire personal information to carry out fraud. At one stage, almost 20
people every minute of the day were being contacted by scammers posing as
representatives of the largest high street banks and building societies including Barclays,
Santander, HSBC, Lloyds, Halifax, First Direct, NatWest, Nationwide and TSB.
In the 12 months until August 2022, around 10 million fraudulent calls were made globally
via iSpoof, with around 3.5 million of those made in the UK. The average loss from those
who reported being targeted is estimated to be £10,000. Police have arrested more than
100 people in the UK, including the suspected organiser of the iSpoof website.
Replace Action Fraud
▪ Make it easier for victims to report fraud, and for law enforcement to take
action on victims’ reports, through a new, state-of-the-art national fraud and
cyber crime reporting service.
47. Victims must have confidence that the police take the crimes that they have
endured seriously. Action Fraud, run by CoLP, is the place most victims go
first, as the UK’s centralised fraud and cyber crime reporting service. A
centralised service that covers both these crime types offers significant
advantages to victims and the police, providing access to specialist services
for victims and comprehensive intelligence for law enforcement action.
48. However, reviews of Action Fraud have repeatedly identified shortcomings
and the Home Office, the City of London Corporation and CoLP are
committed to improving this vital service. For this reason, the Home Office
has committed to spend over £30 million across three years, alongside
contributions from the City of London Corporation, to replace and improve the
service.
49. This new service will provide a wide range of benefits to victims and other
users. As part of the upgrade a new reporting website will be launched to
make it easier for victims to report their crimes online and access advice on
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20
how to protect themselves. Anyone reporting to the new service will also be
able to track the progress of their report and receive far more timely updates.
50. Improvements to the existing service are already underway to enhance the
victim reporting experience and the quality and timeliness with which cases
are sent to police forces for action. Recent improvements include:
▪ Using automation to increase effectiveness through improved technology.
▪ Increasing the number of staff in the call centre and introducing a new
chat bot for the website to handle greater volumes of reports.
▪ Sending cases to forces faster so they can consider whether an
investigation can take place.
▪ Web reports are now analysed to identify vulnerable victims so their cases
can be prioritised for immediate assessment and one-to-one support.
▪ The National Economic Crime Victim Care Unit (NECVCU) service that
some victims are referred to by Action Fraud has already been rolled out
to 41 forces.
51. The full replacement service will launch within a year. For victims this will
mean a totally new reporting service, including an upgraded call centre that
will reduce waiting times, as well as the new portal for victims to get updates
on the progress of their report.
52. Crucially, swifter action will be taken on victims’ reports, resulting in more
fraudsters being disrupted. The National Fraud Intelligence Bureau (NFIB),
the body responsible for assessing victims’ reports and passing those that are
actionable to investigators across law enforcement, will have access to new
and advanced analytic capabilities as well as much more data. This will allow
them to act more quickly, reducing the time it will take to pass intelligence
packages onto police forces to investigate crimes, or to identify criminal gangs
for the NFS to target. They will also be able to take more rapid action with
industry, identifying opportunities for banks to stop money from reaching
fraudsters, or to take down suspicious websites that are attracting large
numbers of victims. More information on these steps will be provided to
victims, increasing their confidence that something is being done.
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Improve the criminal justice response and put more fraudsters behind bars
▪ Conduct a new independent review into the challenges of investigating and
prosecuting fraud, considering:
▪ Modernising the disclosure regime for cases with large volumes of
digital evidence.
▪ Whether fraud offences and the Fraud Act 2006 meet the challenges
of modern fraud, including whether penalties still fit the crime.
▪ Creating civil orders and penalties to prevent fraudsters reoffending.
▪ Making it easier for individuals to inform on associates in criminal
fraud networks.
▪ Embed use of the UK-US Data Access Agreement.
▪ Carry out a full evaluation of the entire life cycle of a fraud case from
reporting an offence through to case disposal at court. We will use this
evidence base to consult on solutions to increase the volume and speed of
such cases.
▪ Make Serious Crime Prevention Orders more effective tools for tackling
fraudsters by increasing their use and improving the ongoing monitoring and
enforcement.
▪ Explore opportunities for increasing recovery of victims’ money through civil
powers.
▪ Introduce a new Failure to Prevent Fraud offence in the Economic Crime and
Corporate Transparency Bill.
▪ Legislate to make it easier to prosecute corporates for crimes committed by
their senior managers, by improving the way decision-makers of the
corporate are identified by law.
Swift and successful prosecutions
53. Due to the nature of fraud cases and the often large volumes of complex
evidence they generate, it can require significant time and resource to
undertake a thorough investigation and bring a prosecution to court. As the
Government launches the NFS, and other measures to increase the law
enforcement response capacity, we also plan to remove barriers to justice to
ensure that more fraudsters pay for their crimes.
54. There has not been an independent review of fraud since 1986.
23
As such, we
will be launching an independent review into the challenges faced when
investigating and prosecuting fraud and announcing a lead for the review
shortly. The first phase of the review will consider how the disclosure regime
can be streamlined for cases with large volumes of digital material, reducing
the significant burden on law enforcement and prosecutors. This will include
23
The Roskill Report on Fraud Trials, 1986
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22
looking at international comparators on disclosure for any lessons we can
learn.
55. Effective disclosure is critical to a fair trial and supports public confidence in
the administration of justice. However, the volume of digital material can
vastly increase the length of time that investigations can take. A modern
disclosure regime that reflects the realities of our digital age will make it easier
for law enforcement and prosecutors to bring fraudsters to court more quickly.
56. To better target serious organised crime groups committing fraud, the
independent review will also consider how provisions under the Serious and
Organised Crime Act 2005 can be better used to persuade criminals to bring
down associates and fraud networks by giving evidence for the Crown.
57. It has been difficult and time-consuming for investigators of all crimes to
acquire data from US-based tech companies. This is particularly true of fraud
investigations which rely on large volumes of digital data. We are making it
easier for prosecutors to access the digital evidence needed to detect and
investigate fraud and secure prosecutions. The UK-US Data Access
Agreement, which entered into force last October, permits UK public
authorities to obtain data directly from US-based companies, for the purpose
of preventing, detecting, investigating, and prosecuting serious crime,
including fraud.
58. The Agreement will fundamentally change the way we are able to fight
serious crime in the UK by allowing access to more data, more quickly than
ever before. The Agreement is already in use and UK and US agencies have
made over 3,000 requests which have already resulted in arrests and
intelligence breakthroughs including for critical Counter Terrorism operations.
We are rolling-out access to all covered agencies over the next 12 months.
Bringing more fraudsters to court
59. Currently, for every 1000 estimated frauds committed there is one successful
prosecution.
24
We know that not all fraud is reported to law enforcement.
There has also been a huge surge in digital evidence
25
as well as many
offenders being based internationally. This sadly means most victims do not
see justice done, and most fraudsters are not punished for their crimes.
24
Calculated taking the ratio between number of sentences (MoJ, YE June 2022 = 3,411) and estimated
incidents (CSEW, YE June 2022 = 3,819,000). Does not account for offenders committing multiple
frauds or multiple offenders being prosecuted for the same fraud.
25
An inspection into how well the police and other agencies use digital forensics in their investigations - His
Majesty’s Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS) – Home
(justiceinspectorates.gov.uk)
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Increasing successful prosecution of fraudsters relies on joined-up action
across the criminal justice system.
60. The legacy of the pandemic has increased the backlog of cases going
through the courts in a timely manner. The Government recognises the
impact delays have on victims, witnesses and defendants, and is taking steps
to reduce the overall Crown Court backlog which will have the effect of
speeding up all types of cases, including fraud. As well as removing limits on
the total number of sitting days in the Crown Court for a second year in a row,
we are recruiting around 1,000 judges across jurisdictions and taking specific
action with the judiciary to increase judicial capacity in the criminal courts with
the largest caseloads. We will recruit around 2000 new magistrates by 2025.
61. We will carry out a full evaluation of the entire life cycle of a fraud case from
reporting an offence through to case disposal at court. We will use this
evidence base to consult on solutions to increase the volume and speed of
cases reported to Action Fraud, and the volume and speed that they go
through the criminal justice system.
62. We are continuing with the planned construction of the City of London Law
Courts, which are scheduled to open in 2026. This will add additional Crown
Court capacity in London. This increase will allow up to 550 additional
complex fraud, cyber crime and economic crime cases to be heard each year.
63. Judges and magistrates hearing fraud cases receive specific training under
the Judicial College on how best to deal with long and complex cases. This
training is regularly reviewed to reflect both changes in the law and the nature
of the cases coming before the courts. Working with the judiciary and the
Judicial Office, we will ensure the court system is equipped for the unique
challenges posed by fraud and the evolving nature of the crime.
64. To ensure that less serious fraud cases are dealt with at the right level and do
not unnecessarily add to Crown Court caseloads, the independent review will
also consider if the Fraud Act 2006 can be updated to increase the number of
fraud cases that are heard by Magistrates’ Courts.
65. We will also review the support that is available to jurors hearing complex
fraud cases. Guidance and support for jurors during a trial is provided by the
judge, but there are also practical considerations, such as provision of
technology, which prosecutors already make use of, to enable jurors to
engage with evidential material more easily.
66. Improving the disclosure regime will also reduce the risk of cases collapsing
during trial and increase the chance of successful prosecution. Police and
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prosecutors are working more closely together and at an earlier stage of
investigations, to build robust cases and prevent fraudsters evading justice.
Proportionate punishment and reoffending
67. A post-legislative review of the Fraud Act 2006
26
found that it remains a sound
piece of legislation. Some useful suggestions were made on how the wider
fraud framework could be improved. Recent reports produced by the House of
Lords
27
and House of Commons
28
noted that there are aspects of the Fraud
Act 2006 that merit rethinking. Therefore, the second phase of the
independent review of fraud will assess the effectiveness of fraud offences to
understand whether they meet the challenges of modern fraud, ensuring the
penalties for fraud match the severity of the crime, and its financial and
emotional impact on victims.
68. We are looking at alternative ways of tackling fraud through civil powers and
preventative orders. The Home Office is consulting on expanding the use of
existing Serious Crime Prevention Orders (SCPOs). SCPOs are a powerful
tool for preventing and disrupting the activities of the highest-harm criminals
involved in serious crime such as fraud, including those who have not been
convicted of an offence.
69. We are proposing to make SCPOs more accessible and easier to impose,
giving law enforcement more tools to restrict the activities of serious and
organised criminals including fraudsters. The Government’s response to this
consultation will be published in June. The independent review will also
consider the scope of further civil powers to tackle fraud, including exploring a
fraud-specific order.
70. CoLP are also working with the private sector on a limited pilot to explore
whether civil debt recovery and other powers can recover more of victims’
money. As this pilot develops, we will review whether there are further civil
enforcement powers that could be applied to fraud.
71. Corporate criminal liability must be reformed to ensure companies can be
better held to account. We will use the Economic Crime and Corporate
Transparency Bill to introduce a new corporate offence of Failure to Prevent
Fraud, where a large organisation can be prosecuted when an employee
commits a fraud which benefits the company, and which the company did not
have reasonable procedures in place to prevent. This will drive a major
cultural shift encouraging companies to do more to prevent fraud, creating
26
Post-Legislative Assessment of the Fraud Act 2006 – June 2022
27
Lords Fraud Act & Digital Fraud Select Committee Report – November 2022
28
Justice Select Committee Report – Fraud and the Justice System - October 2023
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liability for organisations that do not do enough to prevent fraud committed by
employees. This will provide additional protection for the public as companies
put measures in place to stop them being targeted.
Case study
Frederick Diji, a prolific romance fraudster, used online dating sites to con 80 victims out of
over £400,000 between 2005-2021. Using fake online profiles, he targeted vulnerable
people based on their sexuality, age or poor health. After initially gaining a victim’s trust,
he would lie and emotionally manipulate them to loan him money. One victim had been
defrauded over a period of 14 years, during which they gave Fred more than £100,000.
Police investigators worked hard to uncover the scale of Fred’s crimes and together with
the Crown Prosecution Service, successfully built a strong case against Fred, who pleaded
guilty and was sentenced to eight years' imprisonment.
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Pillar 2: Block fraud
We must stop the barrage of scams plaguing our country and stop
fraudsters trying to make victims of us all. According to Citizens
Advice, 2 in every 3 adults are targeted by online fraud, and Ofcom
research indicates that over 40 million adults in the UK were
targeted by at least one suspicious scam text or call in just three
months in 2022.
29
We can stop this by tackling fraud at source and
ensuring every part of the system is incentivised to take fraud
seriously, including industry.
72. It is unreasonable to expect the public to be on a constant state of high alert
against fraud. Our best defence is to stop fraud attempts from reaching
people and businesses before the criminals behind them can cause harm to a
victim.
73. Fraudsters use technology and communication methods that are ubiquitous in
everyday life. As well as scam texts, phone calls and emails, tactics include
emotionally manipulating people through social media, false advertisements
and creation of fake websites that impersonate known and trusted brand
names or utility services. Not only do we lose money to fraudsters, their
actions cause us to lose trust so that we start to question genuine
communications, making it harder for legitimate services and businesses to
contact us.
29
New Ofcom rules to fight fake number fraud - Ofcom
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Case study
Sarah*, a teaching assistant going through a divorce, met a man on a social networking
site in January 2022. This man said he was American and a highly paid employee of a
multi-million-pound multinational corporation. He claimed to be around the same age as
Sarah, to be the same star sign and to have been adopted, like Sarah was.
Communication then moved onto email, and a number of accounts on instant messaging
services, and Sarah tried to transfer £9,000 to those targeting her. Sarah’s bank froze
the transaction whilst they investigated, but the fraudsters persuaded Sarah to make the
transaction through other means.
*Name has been changed
74. The range of methods that a fraudster will use to defraud the public means a
coordinated response from government and industry is required, and every
part of the system must be incentivised to act. Telecommunication companies
and technology firms often provide the infrastructure or service where first
contact is made between fraudster and victim, and where they are persuaded
to make payments. The financial sector operates the accounts and payment
systems that facilitate money loss. We have therefore focused our activity on
these three sectors.
Industry action
▪ Appoint Anthony Browne MP as newly created Anti-Fraud Champion to drive
delivery and increase industry collaboration.
▪ Publish new regular data on patterns of fraud to help inform consumers.
▪ Measure the impact of industry in preventing fraud through the Joint Fraud
Taskforce (JFT) and set new voluntary targets for companies to reduce fraud.
▪ Agree a new charter with tech companies by the end of Summer 2023.
▪ Work with tech firms to introduce a simple, seamless and consistent fraud
reporting mechanism.
▪ Implement existing Fraud Sector Charters by the end of 2023.
▪ Agree new charters with the insurance and other sectors by early 2024.
75. Industry, government, law enforcement and regulators must continue to work
together to make it as difficult as possible for fraudsters to operate.
Companies are in a unique position to protect their customers from fraud.
76. Industry have taken action to prevent fraud and there are examples where
this has had a positive effect. The Banking Protocol has prevented many of
those who are in the grip of an authorised bank fraud from transferring funds
to criminals. The introduction of SMS filtering solutions, agreed through the
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Telecommunications Charter, a voluntary agreement signed by the sector
(see more information about charters below), has prevented many fraudulent
texts from reaching the public. Some large tech companies have brought in
checks to ensure that firms advertising financial investments must be
registered with the Financial Conduct Authority (FCA).
77. But these successes do not go far enough. While industry can prevent harm
on a voluntary basis at the same time as strengthening consumer confidence
in their respective markets, changes are not happening in lockstep and some
industries have done more than others.
An Anti-Fraud Champion
78. Working with all partners including industry is a key foundation in our efforts to
fight fraud. It is incredibly important that this collaboration is effective and
seamless.
79. We have therefore appointed Anthony Browne MP to drive collaboration, with
UK based and global businesses, to ensure that all key partners are playing
their part. As the Anti-Fraud Champion, Anthony will have the authority to
position the UK as a leader on the international stage in tackling fraud and
ensure the delivery of key strategic aims. As the previous Chief Executive
Officer for the British Banking Association, and current member of the
Treasury Select Committee, Anthony has the experience and knowledge of
fraud and industry to drive this work forward.
Incentivising Action
80. By shining a light on where consumers encounter fraud, we will incentivise
those platforms and services which are being abused by fraudsters to do
more to protect consumers. We will ask banks to report specified data on
authorised fraud rates to the Payment Systems Regulator. Working with
regulators and across government, we will publish regular data on patterns of
fraud to help inform consumers and ensure that all firms as well as banks are
held accountable for preventing fraud from happening in the first place. The
Government will ask the new Anti-Fraud Champion to work with industry,
including social media and telecommunications firms, to ensure that
companies are properly incentivised to combat fraud and explore all avenues
to do so.
Joint Fraud Taskforce
81. The Government partners with industry to prevent fraud through the Joint
Fraud Taskforce (JFT). This is chaired by the Security Minister and brings
together leaders from government, law enforcement, regulators, industry and
civil society who are committed to work together to prevent fraud. This was
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relaunched in October 2021 and governs the Fraud Sector Charter
programme. The JFT works at board and official level across several
workstreams including comms, online fraud and victims. Minutes of meetings
are available at: www.gov.uk/government/collections/joint-fraud-taskforce.
82. In November 2022, the JFT agreed to work together to measure the impact of
the work of industry in preventing fraud. Once a baseline is established, we will
set voluntary targets for companies to reduce fraud.
Fraud Sector Charters
83. Fraud Sector Charters are voluntary agreements between industry and
government to improve counter-fraud efforts. Through the charters they
undertake specific projects, pilots, policy reviews and research to better
understand and prevent fraud in signatory sectors. There are already charters
with the retail banking, accountancy and telecommunications sectors.
84. Our priority is to agree a new Online Fraud Charter with technology
companies. This is vital because of the growing threat from online fraud, and
from criminals abusing cutting-edge technology to commit fraud. Just one
recent example is the developments in Artificial Intelligence large language
models like ChatGPT, Bing and Bard, which can allow fraudsters to create
ever more persuasive fraudulent communications, email and voice calls. As
part of our continued engagement with the tech sector we intend to work
closely with providers to ensure that fraud prevention remains a priority.
85. The Government is already working with the tech sector on the new Online
Fraud Charter that will be delivered by the end of summer 2023. We have
asked industry as part of this charter to:
▪ Improve data sharing with government and other private sector
partners to identify and block frauds.
▪ Ensure all advertisers of financial promotions are cross-referenced
against the FCA authorised list before being published. Following
engagement with government, LinkedIn have agreed to use the FCA
authorised list alongside other companies like Google, who have seen
close to a 100% reduction in paid-for scam advertising for financial
services products since using the FCA list.
▪ Set out what more they can do to support law enforcement's efforts to
tackle online fraud such as investing in a specialist online fraud unit in
law enforcement.
▪ Streamline and boost counter-fraud education to the public to help
them better spot and avoid frauds and seek support when needed.
86. We want to make it as simple as possible for users to report fraud they see
online. This includes scam adverts, false celebrity endorsements and fake
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user profiles. In discussion with government, many of the largest tech
companies have committed to making this process as seamless and
consistent as possible. This means, regardless of what social media platform
or internet site you are on, you should be able to find the ‘report’ button within
a single click, and then able to select ‘report fraud or scams’. This information
is sent directly to tech companies to investigate and swiftly remove any scam
content which has evaded detection, preventing more users falling victim to
scammers in the first place. For example, TikTok and SnapChat already offer
quick and seamless reporting for ads, but have committed to extending this to
other types of content.
87. The Government is working with TechUK to encourage other tech companies,
as well as advertising intermediary services, to follow suit. We will closely
monitor progress and consider mandating that all tech companies must offer a
simple, seamless, and swift reporting mechanism if voluntary progress
towards this is insufficient.
88. There are three current sector charters:
▪ The retail banking industry, represented by UK Finance, agreed a
charter focused on preventing authorised fraud. Actions included
building a shared evidence base on where fraud attempts originate,
developing a shared approach to counter the threat of money mules
and measures to improve victim support.
▪ The accountancy charter focused on building the intelligence picture of
fraud affecting the sector. Actions focused on providing a law
enforcement assessment of risk in the sector, increasing awareness
and changing customer behaviour.
▪ The telecommunications charter sets out how, working with government
and regulators, the sector will carry out an ambitious programme of
work to prevent telecommunications-enabled fraud. This includes
blocking scam texts. The sector has already introduced firewalls that
detect and stop scam texts from reaching customers. The firewalls also
monitor and stop “FluBot malware” used by criminals to infect and take
over a victim’s phone to steal credit or debit card details. The firewalls
have stopped 600 million scam text messages since January 2022. As
fraudsters find new ways to attempt to reach customers, telecoms
operators continue to work to improve these filters further. The
telecommunications charter also includes measures to stop suspicious
calls, tackle identity theft, and prevent SIM-swap scams.
89. The Government will secure agreement on charters with other key sectors in
the fraud ecosystem, including the insurance sector by early 2024.
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Regulate to prevent criminals abusing technology
▪ Hold tech companies to account to reduce online fraud and issue significant
fines for those who do not, by passing and implementing the Online Safety
Bill.
▪ Extend the ban on cold calls to cover all financial and investment products.
▪ Ban SIM farms to make it as difficult as possible for criminals to send scam
texts and make scam calls.
▪ Review the use of mass text aggregators and explore user registration of
these services.
▪ Together with Ofcom, disrupt more telephone-enabled scams by stopping
more spoofed calls.
▪ Deliver the Online Advertising Programme to ensure that UK-facing online
advertising is safe from fraud and other harms.
90. We will root out fraud on social media platforms. User-to-user platforms will
be required, by law, to put in place systems to prevent fraudulent content
appearing on their platforms. This includes scam adverts and fake celebrity
endorsements. We will do this through the Online Safety Bill and work
towards making the UK the safest place in the world to be online.
91. Through the Online Safety Bill, internet users will be better protected from
fraudulent adverts and scams online. The Online Safety Bill will require ‘user-
to-user’ platforms, such as social media, as well as search services, to put in
place systems and processes to tackle fraud where it is facilitated through
user-generated content or via search results. The largest in-scope platforms
will also need to prevent fraudulent adverts appearing on their services,
including where criminals impersonate celebrities or companies to peddle
fake financial investments. Robust Codes of Practice, prepared by Ofcom, will
set out how in-scope services can comply with these duties. Taken together,
these are significant new duties on internet platforms, compelling them to take
fraud seriously to make it harder for fraudsters to use these services to scam
the UK public, or face substantial fines if they do not take sufficient action.
92. Under the new regime, super-complaints will allow for concerns about
systemic issues with particular services to be raised with the regulator, who
will be required to respond publicly to them.
93. We will extend the ban on cold calling to cover all financial products. Under
the Financial Guidance and Claims Act 2018, this Government has already
banned cold calls from personal injury firms and pension providers (unless the
consumer has explicitly agreed to be contacted). But we want to do more to
stop people being exploited by the practice of cold calling and we will consult
on a wider ban on cold calls by the summer, with implementation to follow as
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32
soon as possible, so that fraudsters cannot dupe people into buying fake
investments or financial products. This means that the public will know that
cold calls about financial products are a scam and should have the
confidence to hang up should they receive one of these calls.
Case study
In February 2023, a married couple were sentenced to nine years in prison for a cold
calling investment scam where victims lost over £2.7 million. Clint Canning and Eleise
Wallace ran Base 2 Trade, which claimed to offer fixed odds betting on the trading
performance of a business. The company approached elderly or inexperienced investors
via cold calls using an internet portal to show apparent profits so many victims invested
more.
When investors tried to withdraw their money, they were fobbed off by the company,
ignored, or told they could not. The portal would then show massive losses on the
investments and that their accounts had zero money left. The money had been secreted
to accounts abroad.
94. We will ban SIM farms. Used by criminals to send out thousands of scam
texts in seconds, these are electronic boxes which can hold hundreds of SIM
cards. While most frequently used for fraudulent texts we know that they are
also used to send drug marketing texts and fuel organised crime. They are
currently easy and legal to buy online but we have identified no legitimate use
for SIM farms in the UK. We will ban SIM farms and we have launched a
consultation on the best way to do this with the intention to legislate when
parliamentary time allows. This will be strongly welcomed by the
telecommunication industry in particular, whose networks are abused through
SIM farms and who lose money as a result.
95. We will review the use of mass text aggregators and explore user registration
of these services. While there are many legitimate uses for mass texting
services, like restaurant bookings, appointment reminders and delivery
updates, there is some evidence to suggest that these services are being
abused by criminals. We are working with law enforcement to build a threat
assessment and to understand the role these services play in the fraud
ecosystem. We will conclude a rapid review of the market by the summer and
take swift action on the back of this.
96. We will disrupt fraudsters’ ability to spoof UK telephone numbers. Criminals
frequently falsify or ‘spoof’ their numbers to hide their identity when calling
and texting potential victims in order to pose as a legitimate organisation,
such as our banks or a government agency. In May, new strengthened rules
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come into force that will require all telephone networks involved in transmitting
calls – either to mobiles or landlines – to identify and block spoofed calls,
insofar as current technology permits. Ofcom have also set out clear
expectations on the steps that phone companies should take, in accordance
with their obligations, to prevent valid numbers being misused, and expect the
companies to have a process for responding to reports of potential misuse.
97. We recognise that these measures will not stop all spoofed calls, and that
scammers will continue to adapt their tactics. Ofcom will monitor the impact of
these measures and will keep all options under review to clamp down on
spoofed calls. To that end, Ofcom launched a consultation in April to consider
the introduction of Calling Line Identification (CLI) authentication technology
(and other measures) so that phone companies can certify that the number
used for a call is legitimate. Measures like this will offer a more
comprehensive solution to spoofed calls.
98. The Online Advertising Programme will build on the fraudulent advertising
requirements in the Online Safety Bill. It will seek to strengthen the existing
regulatory framework for paid-for online advertising to reduce harms, such as
fraudulent and malicious advertising. The Department for Culture, Media and
Sport (DCMS) is committed to tackling the most concerning harms facilitated
by online advertising, including fraud, through a package of ambitious
legislative and non-legislative reforms.
Financial firms will better protect their customers
▪ Enable payment service providers (PSPs) to adopt a new risk-based approach
to provide additional time for potentially fraudulent payments to be
investigated.
▪ The FCA will undertake assessments of financial firms’ fraud systems and
controls.
99. Customers and businesses have enjoyed many benefits from banking online
and from being able to make payments quickly. At the same time, fraudsters
have sought to exploit the ease of making payments to defraud individuals
and businesses and rapidly move money to avoid successful repatriation of
lost funds.
100. In response to this, under the supervision of regulators, the financial sector
has invested in resourcing and new technologies to better identify and block
suspicious payments. Key initiatives that have been taken forward to help
prevent fraud are:
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▪ Strong Customer Authentication – when customers buy something or
make a payment online, the Payment Services Regulations 2017 mandate
that all PSPs should verify their customers’ identity. This helps to prevent
fraudsters making unauthorised payments with someone else’s details.
▪ Confirmation of Payee – a verification service that means a payer can
see if the name of a payee matches the account details of the person they
think they are sending money to. The Payment Systems Regulator (PSR)
has issued several directions to extend the reach of Confirmation of Payee
across industry to over 400 firms.
▪ The Banking Protocol – an industry initiative led by UK Finance, where
bank staff are trained to spot when a customer is about to fall victim to an
authorised fraud and work with the police to convince them not to make
the payment.
101. Government, regulators and industry are working together to identify
opportunities for greater information sharing to better tackle fraud ‘up stream’.
The PSR has called for shared standards on flagging risky payments to make
data comparable. They have also set up an industry working group, including
Pay.UK and UK Finance, to agree what data could be shared. As well as this,
there are ongoing industry initiatives to share data. The Government and
financial regulators welcome the action that is being taken to share relevant
information and to use this data to stop fraud from happening in the first
place.
102. While in the vast majority of cases data-sharing should enable suspicious
payments to be identified in real-time, the Government and financial
regulators recognise that in a small number of cases it may be beneficial for
payments to be held beyond the usual timescales established in legislation in
order to better protect customers. The Government is looking at how
legislation might need to change in order to achieve this and has recently
consulted on the best way to allow PSPs to adopt a risk-based approach to
inbound and outbound payment processing. Such an approach would provide
additional time for potentially fraudulent payments to be investigated, and for
customers and even law enforcement to be engaged before a payment is
executed. This will be done while minimising impacts on legitimate payment
flows.
103. Tackling financial crime and, more specifically, Authorised Push Payment
(APP) fraud continues to be a priority for the FCA and they continue to
proactively consider a range of potential policy initiatives to tackle the scale
and impacts associated with this type of crime, both for victims and the firms
that they regulate.
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104. In addition to their policy work, since January 2020, the FCA has been the
anti-money laundering supervisor for crypto asset firms and the rules that
apply to these firms have recently been updated, including to align with
strengthened international standards.
105. The PSR is delivering a broad package of measures to help tackle the threat
of authorised fraud, including measures to increase transparency by requiring
the twelve largest PSP groups in Great Britain and the two largest in Northern
Ireland to provide data on their performance in relation to APP fraud.
Secure people online at scale
▪ NCSC will continue to prevent fraudulent material and attacks from reaching
people while investigating further opportunities with industry to reduce the
number of scams reaching the public.
▪ NCSC’s new national “Share and Defend” hub will stop millions of fraud
attempts from ever reaching consumers.
▪ Consult on creating new powers for law enforcement agencies to seize
control and take down criminal, fraudulent websites.
106. We will take down more fraudulent websites by expanding the National Cyber
Security Centre’s (NCSC) remit to work with financial institutions and tech
companies. Currently, the NCSC works with internet service providers and
mobile network operators to scour the internet for malicious websites and
shares these with industry in real time so they can be removed. The NCSC
will now share their findings with financial and tech companies to eliminate
more fraud.
107. The internet has provided new opportunities for criminals and national
security threat actors, but it also offers opportunities to keep the public safe.
The NCSC, a part of the Government Communications Headquarters
(GCHQ), is leading government’s work to secure citizens and organisations
online – at scale and in real time. This is a key commitment within the
National Cyber Strategy and will significantly reduce the security burden on
the public to act, making them more resilient while living and working online.
108. NCSC scours the internet for malicious websites and attacks, then works with
industry to either remove them or, if they cannot be removed, enables them to
be blocked from public reach. In the year 1 September 2021 to 31 August
2022, the NCSC identified and removed a total of 2.1 million malicious cyber
campaigns.
109. Another way fraudsters reach people is through fraudulent emails. Spam
filters have played an important role in reducing the volume of fraudulent
emails reaching the public, but not all are caught. As of March 2023, NCSC
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had received more than 19 million reports of suspicious emails and websites
from the public, leading to the removal of more than 120,000 scams across
220,500 URLs since the service launched in April 2020. We recognise the
harm associated with fraud from mass emails and will work with NCSC and
industry to further investigate opportunities to reduce the number and impact
of fraudulent emails reaching people’s inboxes.
110. The NCSC continues to develop ways to protect the public online through the
development of its Share and Defend capability. Launched last year, Share
and Defend enables NCSC to share malicious websites with industry in near
real time to protect the public at scale. Already half of all internet service
provider (ISP) customers are able to benefit from this service, and by the end
of this year, 80% will be covered.
111. At present, members of the sharing platform are the biggest UK ISPs and
mobile network operators (MNOs) in the market. Our ambition is to expand
this service to financial institutions and technology companies in the coming
year. Alongside this, NCSC will continue to deliver their work to:
▪ Identify and remove malicious websites and attacks at scale.
▪ Enhance repatriation of stolen customer credentials (e.g. credit cards) to
providers.
▪ Undertake initiatives to improve the security of the internet by working with
industry to improve security practices.
▪ Secure consumer accounts and devices by default through various
initiatives with industry.
112. While the work of NCSC is invaluable in stopping frauds from reaching UK
citizens, more needs to be done to enable the swift removal of domain names
and IP addresses in cases where voluntary agreements do not work. We are
consulting on the creation of new powers to enable law enforcement agencies
to seize control and require the takedown of domain names and IP addresses
where there is a suspicion of criminality, including fraud.
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Pillar 3: Empower people
Fraud is not a victimless crime. Millions of people and businesses
are targeted by fraudsters across the UK each year. Too many
victims lose money and confidence. Some suffer health problems
as a result. To stop people becoming victims and help them
recover, we must empower them with the tools and knowledge to
keep themselves safe and most importantly ensure they get their
money back as quickly as possible.
Case study
Harry*, a barrister in his forties, got a call from a person claiming to be his bank’s fraud
prevention department about an attempt to hack his account earlier in the week. This
rang true because he had received a suspicious message from a delivery firm requiring
bank details for unpaid delivery costs that week. Harry was rushing as he was late to get
home and was distracted. His immediate reaction was relief that the bank had picked up
the issue and contacted him.
The caller said that there were suspicious transactions appearing on the account and
described them. Harry had not made these payments and the caller said that to cancel
the transactions he would need to read out the one-time passcode code he was being
sent. Harry followed these instructions, and this continued a number of times until he
became suspicious and hung up the call. The callers were fraudsters attempting to get
around Harry’s bank security measures. As Harry had given them the one-time
passcode, they were able to access his account and transfer out £10,000.
*Name has been changed
113. Despite the prevalence of fraud, there is a widely held misconception that the
victims of fraud are elderly or vulnerable. The reality is very different. Those
most likely to be victims are between the ages of 45-54, although it is
common across all age ranges.
30
Those in higher income brackets and those
in managerial or professional occupations are a higher relative proportion of
30
CSEW Nature of fraud and computer misuse in England and Wales Appendix Tables: Table 7
The Fraud Strategy
38
fraud victims.
31
Similarly, those with no qualifications represent a lower
proportion of victims than those who have them.
114. Despite our increasing efforts to stop fraud, it is unfortunately inevitable that
some fraud attempts will still reach the UK public. Fraudsters will adapt and
continue to look for weaknesses and vulnerabilities to exploit. The nature of
these frauds will change as rapidly as technology does.
Better communications
▪ Overhaul public anti-fraud communications by streamlining and amplifying
them across law enforcement, government, non-profits and industry, and
launching a simple cross-government campaign.
▪ Improve awareness and increase support by creating a new dedicated police
PROTECT network, aligned with the Cyber PROTECT network.
▪ Ensure young people have key anti-fraud and cyber security skills by
equipping teachers to deliver new anti-fraud lessons.
115. The mistaken belief that only the vulnerable are at risk of fraud can lead to
misplaced confidence, making some people less likely to take steps to protect
themselves. Even when the danger is understood, ruthless fraudsters can
emotionally manipulate victims into a state of panic to lower their defences.
116. There are numerous sources of anti-fraud communications across the private,
public and voluntary sectors, such as campaigns from Action Fraud, Cyber
Aware, ScamSmart, Friends Against Scams, and the UK Finance run Take
Five to Stop Fraud. Although these have helped raise awareness of the
threat, the proliferation of voices may have led to confusion about what to do.
People do not always take action to protect themselves and others, and
reporting rates remain low. Government, law enforcement, industry and civil
society must unite behind clear, technically accurate and timely messaging so
that the public know how to protect themselves from fraud and how to report
it. Delivering clear, consistent and effective messaging at key touch points will
enable millions more to act on protect advice, stopping fraudsters in their
tracks.
117. We will launch a simple cross-government anti-fraud public awareness
campaign to further unite messaging. This will make it easier for people to
avoid fraud, and to know how to respond and recover if they have been
scammed. This will help them protect others and reduce harm to
themselves. We will also work in schools and communities to deliver the right
messages to those at risk. The NCSC will continue to provide actionable,
31
CSEW: Property Crime Tables: Table 11 March 2020
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39
technically accurate and timely advice and guidance on online security for the
public.
Bolster victim support
▪ Enhance and streamline how victims report fraud, starting with replacing
Action Fraud with a state-of-the-art new system.
▪ Implement consistent support for victims across England and Wales by
expanding the National Economic Crime Victim Care Unit and National
Trading Standards’ Multi-Agency Approach to Fraud.
118. This Government is determined that all victims will get the support they need
when they need it most. Simplifying the ways victims report fraud to the
police, via Action Fraud, is integral to this. For too many, reporting fraud is a
difficult process to navigate, with victims often unsure about how or why to
report their experiences or having to repeatedly relive traumatic events. The
same is true of recovering or protecting their identity when it has been stolen.
119. Action Fraud's National Economic Crime Victim Care Unit (NECVCU) reaches
out to provide a tailored advice service to all victims referred to them. The
NECVCU aims to assist victims to feel confident to cope and recover.
Research has found that victims were satisfied with the service provided and
felt safer, more aware of fraud and cyber crime, and more confident in the
police’s ability to respond to these crimes. The more vulnerable the victim, the
higher the level of service they receive.
120. We are also keen to see vulnerable victims receiving more tailored support at
a local level. Driven by the National Trading Standards (NTS) Scams Team,
the national rollout of Multi-Agency Approach to Fraud (MAAF) within England
and Wales is creating local hubs to bring key partners together to identify
victims and ensure they get the support they need, from those best placed to
provide it, including NTS, police, social workers or local charities.
121. With the SFO as law enforcement lead, we have established a Victims of
Fraud Working Group (VFWG) that brings together leading organisations
including NTS, Victim Support, Age UK and Cifas to encourage better system
join up.
122. Improving victim support will help prevent re-victimisation, significantly
reducing the volume and harm of fraud. The 18% of fraud victims who are
repeat victims each year account for 35% of all fraud.
32
By exploring what
works best to help those most at risk, and reducing the number victimised
again, we will improve outcomes for victims and reduce the harm of fraud.
32
CSEW calculation based on Appendix tables and Demographics tables
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Improved victim support via the expanded NECVCU and MAAF will ensure
more people get the help they need to avoid revictimisation, whilst the new
Action Fraud service will encourage more victims to report the crime to
access support and break the cycle.
Case study
Following a report to Action Fraud, an NECVCU victim advocate reached out to Alastair*, a
retired engineer in his seventies with mental health issues. He had been caught in a
sophisticated cryptocurrency scam. Initially investing a small amount in a seemingly
legitimate company, he eventually lost £45,000 of savings. The fraudsters also took
advantage of a bout of ill-health to persuade Alastair to give them control of his computer
and rapidly applied for a loan of £25,000 in his name from a high-street bank, before
transferring this to themselves via another high-street bank.
The NECVCU advocate, Sarah*, gradually built Alastair’s trust. The victim was ashamed to
discuss what had happened with his family. He reported feeling ‘destroyed, even suicidal’
from having lost his life savings and part of his pension. With continued encouragement
from Sarah, he took advice from the police and organisations such as Mind and Victim
Support. The victim agreed for Sarah to work with his daughter to put in place further
preventative measures such as changing passwords, registering with Cifas and obtaining
a credit report. They applied to the banks for reimbursement under the Contingent
Reimbursement Model. In addition to this, Sarah arranged for his local police force to
provide some advice and reassurance.
The banks have since refunded most of the money he’d lost and cancelled the loan. As a
result of this, and NECVCU support, Alastair is feeling much better, more confident in
spotting scams and feels he can now move on. Alastair told Sarah, “Just as you said
would happen - the scammers keep getting back in touch… I admit to being rather rude to
some of them who hold on long enough to feel the full force of my contempt!”
*Names have been changed
123. We are also supporting NTS to identify those most in need and provide
effective interventions to prevent further re-victimisation. This includes
supplying doorstep cameras to reduce the chance of victims being defrauded
in their homes.
124. Learnings will be drawn from domestic abuse and coercive control to
understand how to best support victims of fraud and eradicate the sense of
shame they too often feel. This will include creating a toolkit to support
practitioners in better assisting victims of fraud.
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Protect identities from fraud
▪ Establish a trusted and secure digital identity market in the UK through
continued work by the Department for Science, Innovation and Technology
(DSIT).
▪ Ensure victims of identity theft get the support they need to repair their
identities and introduce an identity checklist outlining the steps needed to
recover and secure a stolen identity.
▪ Explore new legislation to restrict creating and selling identities and the
handling of data copied or obtained through unauthorised access.
▪ Stop people hiding behind fake companies by improving the validity of the
information in the companies register and making greater use of it.
125. Frauds can be extremely sophisticated and difficult for victims to spot.
Phishing attempts have become a daily fact of life, with people being
bombarded with fraudulent emails and messages. With rapid technological
change continuing and fraudsters evolving their techniques, it is harder for the
public to spot the genuine from the fraudulent. Many of these scam texts,
emails and messages are just a way of harvesting data on individuals.
126. According to Cifas, the UK’s largest cross-sector fraud information sharing
database, around two thirds of fraud reported to them involves identity fraud.
Criminals stealing personal information, more commonly known as identity
theft, drives an industry where identities are stolen and sold for fraud. People
who have had their identities stolen are often left unsupported to take action
to repair their identities and reduce the impact of any frauds committed in their
name.
127. New technology and legislation aimed at disrupting those stealing and selling
data will make the internet a more hostile place for identity fraudsters. The
Government is also working to enable the widespread use of trusted and
secure digital identities, to help tackle identity enabled frauds.
128. Fraudsters also abuse the UK’s framework for company registration and filing
to commit crime. This includes through the creation of companies specifically
to perpetrate fraud and the use of an individual or business’s personal details
or address without their consent, including to obscure ownership and control
of a company.
129. The Economic Crime and Corporate Transparency Bill, which is currently
before Parliament, will tackle these issues through greater powers for
Companies House. New powers to check, challenge and decline dubious
information, supported by stronger analytical and intelligence sharing
capabilities, will make frauds easier to spot. Individuals whose addresses or
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identities have been hijacked will no longer have to suffer further through
lengthy administrative or court processes to rectify matters.
Change the law so more victims get their money back
▪ Make sure more victims of authorised fraud get their money back by
legislating to enable the Payment Systems Regulator (PSR) to require
reimbursement by all PSR regulated payment service providers (PSPs).
▪ Evaluate and determine the next steps on ensuring a consistent framework
for repatriation of fraud funds to victims.
130. We are going to take measures to ensure more victims get their money back,
while providing greater incentives to PSPs and other industries to prevent
these frauds in the first place.
131. As criminals become ever more adept at persuading and grooming their
victims to part with their money, it is becoming harder and harder for the
public to spot real from fake. Under current regulations, victims of
unauthorised fraud are entitled to be reimbursed by their bank within 48
hours. However, no such legal provision is in place for victims of authorised
fraud, a fraud type that has grown significantly in recent years.
132. In 2019, nine firms voluntarily signed up to the “Contingent Reimbursement
Model Code”, developed under the direction of the PSR. This code introduced
a requirement on signatory firms to reimburse their customers when they had
been tricked into handing over their money, where the customer could not
reasonably have been expected to identify the fraud.
133. However, under this voluntary code, reimbursement rates are inconsistent
(averaging around 50% of victims getting their money back), and the process
can be protracted and at times difficult. To resolve this, the Government is
legislating to enable the PSR to use its regulatory powers to require
reimbursement by all PSR-regulated PSPs in relation to the Faster Payments
System, where 97% of Authorised Push Payment (APP) frauds currently
occur. The Government believes it is right that action is taken to place
reimbursement on a mandatory footing without delay. This will be achieved
via the Financial Services and Markets Bill.
134. There is currently no obligation for PSPs to attempt to repatriate money to
fraud victims. Where firms seek to return funds to victims and originating
banks, it can be difficult to identify a victim and there is competing precedents
as to the approach to be adopted. Some firms however have higher risk
appetites than others, which leads to inconsistent outcomes for victims. We
will evaluate and determine the next steps on ensuring a consistent
framework for repatriation of fraud funds to victims both in the UK and abroad.
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Enhance key international and domestic
capabilities
There are a number of cross-cutting issues and capabilities that
must be explored and developed to enable delivery of the strategy.
These include work with international partners, data sharing, and
addressing money mule networks.
International capabilities and cooperation
▪ Drive global action on fraud by making tackling it an internationally
recognised priority for governments around the world, including by hosting a
global fraud summit in the UK, chaired by the Home Secretary.
▪ Work bilaterally with key countries to strengthen their efforts to tackle fraud,
agreeing new actions across government, including law enforcement and
Foreign, Commonwealth and Development Office (FCDO) and its networks.
▪ Bolster our law enforcement presence in key source countries to build
greater capability in those countries and work closely with upstream partners
to disrupt more fraudsters.
135. Fraudsters operate across borders, causing billions of pounds in losses
annually for the UK and posing a significant threat to global economic
prosperity. Yet so far, we have found that fraud is under-prioritised globally,
with the UK having one of the most advanced and comprehensive responses.
This new strategy cements our position as a world leader on fraud.
136. Our goal is to create a comprehensive and sustainable international approach
to combatting fraud, that will help protect the global community from its
devastating effects and promote greater prosperity and security for all.
137. We know this will be difficult. Many countries do not understand the impact
fraud has on their economy or international standing. Some may even be
financially benefitting from it. Over this coming year, we will work in
collaboration with key partners to develop a systematic and evidence-based
approach.
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A fraud summit to build the international consensus for action
138. It is vital that we make every country see they have a part to play in tackling
fraud. Currently, there is no multilateral, co-ordinated, policy level response to
fraud against individuals and businesses. The UK is recognised as a leading
partner placing us in the strongest position to lead a multilateral response.
139. We will raise the priority of fraud on the international political stage, starting
with a global fraud summit in 2024. We will create a new international
consensus to tackle fraud, as we have done on other threats, such as child
sexual abuse and exploitation, learning from the collaborative approach taken
on illicit finance between international industries and governments, especially
with the Five Eyes countries.
Case study
Singapore, a key partner of the UK, established their domestic Anti-Scam Command
(ASCom) in March 2022. The ASCom partners - and on occasions co-locates with -
local and foreign banks, card security groups, non-bank financial institutions, Fintech
companies and cryptocurrency houses, as well as remittance service providers in
Singapore. Through these partnerships, the ASCom and its partners have been able to
swiftly freeze accounts, recover funds and reduce losses suffered by victims. For
example, on 2 May 2022, the ASCom worked with DBS Bank to seize US$10 million.
140. Our first step towards this has been to establish an international working
group, the first of its kind. We will also raise fraud at multinational fora
including the Roma-Lyon Group (G7) at Hiroshima in May and at the United
Nations.
141. Our global summit will bring together leaders from governments, law
enforcement, and the private sector, to announce the ambition to deliver a
comprehensive and coordinated approach to tackling fraud over the next 5
years. The outcomes of the summit will include a shared understanding of the
nature and scope of the fraud threat, the identification of best practices for
preventing and responding to fraud, and the proposal to develop a
coordinated action plan to dismantle fraud networks.
142. We are committed to taking a leadership role in this effort, and we will work
closely with our international partners to achieve this.
Drive action in key countries of risk
143. The fraud threat to the UK is varied, with some international jurisdictions more
commonly reported as connected to certain types of fraud than others.
Romance fraud is still commonly seen from countries in West Africa, whilst
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call centre enabled fraud is commonly linked to South Asia. Investment frauds
can emanate from the UK, but are also reported from across different parts of
Europe and as far as South East Asia.
Case study
A joint operation between the UK and Ghana into romance fraud resulted in the
conviction of a number of criminals in Ghana and the repayment of stolen money to UK
based victims. Following investigation in the UK by local and national investigators, and
working with the NCA International Liaison Officer and Ghanaian police, 28 victims were
identified. Local UK forces provided victim care and advice, while the Ghanaian courts
allowed £195,000 to be repatriated to victims. This has led to a strengthened partnership
in combatting romance fraud between Ghanaian and UK law enforcement.
144. We will assess with the NCA and FCDO both where frauds may be coming
from, and those countries that can help us have the greatest impact on
tackling it. Based on these assessments, we will agree across government
the actions required to support top jurisdictions of risk to do more to tackle
fraud and work with our overseas networks to deliver this. These actions will
cover multi-year, long term aims aligned to the Fraud Strategy. These include:
Pursue fraudsters
▪ Strengthening our understanding of source countries where fraudsters, or
infrastructures used for fraud, are located.
▪ Developing intel-led country action plans to cover the highest priority
countries, focusing on proposals such as building law enforcement
capacity, victim support capabilities, cyber security responses and asset
recovery processes.
▪ Building on successful law enforcement operational activity in source
countries by partnering with relevant agencies to effectively combat fraud
and replicate success in other countries.
Block fraud
▪ Driving forward an international public-private partnership to make
coordinated asks of global companies to do more to tackle fraud online,
e.g. the tech sector.
▪ Harmonising legal frameworks and regulations across countries to ensure
that fraudsters cannot take advantage of loopholes or inconsistencies.
▪ Promoting the use of secure payment methods in other countries to
reduce the risk of fraud and protect personal and financial information.
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Empower people
▪ Sharing best practice and expertise in developing awareness campaigns
to educate individuals and businesses about the dangers of fraud and how
to recognise and avoid scams.
▪ Providing training and capacity building programs for law enforcement
agencies and civil society organisations in other countries to enhance their
ability to prevent and respond to fraud.
▪ Supporting the development of fraud reporting and victim support systems
in other countries to ensure that people who have been targeted by
fraudsters have the access to the help and support they need.
Data sharing and cross-government capabilities
▪ Government will continue to work with all sectors and partners to maximise
data sharing mechanisms, including through legislation.
▪ Support the Public Sector Fraud Authority by sharing data and threat
assessment insight.
145. Government is addressing some of the legal challenges to information
sharing raised by industry partners. The Economic Crime and Corporate
Transparency (ECCT) Bill will introduce provisions to disapply civil liability –
in particular, for breach of confidentiality – for anti-money laundering (AML)
regulated firms who share customer information with each other for the
purposes of preventing, detecting and investigating economic crime. The
provisions will allow direct sharing of information between two businesses in
the AML regulated sector, as well as indirect sharing through a third-party
intermediary for businesses in the financial sector. Government will continue
to work with all sectors and partners to maximise data sharing mechanisms.
146. In the second Economic Crime Plan (2023-2026), government has committed
to develop and implement a Public Private Economic Crime Data Strategy by
mid-2024
33
that enhances the exploitation of available data across the
ecosystem to better prevent, detect and pursue economic crime. The strategy
will encompass the governance, prioritisation, and technical changes
necessary to manage data better across the system.
147. We will also forge closer engagement between those responsible for
preventing fraud directed at the public sector, and those responsible for
preventing the defrauding of private individuals and businesses. Broader
33
Economic Crime Plan 2 2023-26 (publishing.service.gov.uk)
The Fraud Strategy
47
collaboration across the public sector fraud response is led by the Public
Sector Fraud Authority.
Addressing money mule networks
▪ Publish a new cross-sector money mules action plan to disrupt money mule
activity and protect the public.
148. Fraudsters rely on networks of ‘mule’ accounts to extract and move the
money taken from victims. Transactions can pass through financial
institutions, or be turned into cash or cryptocurrencies, to disguise the trail
before delivering the proceeds to the criminal group. Money mule networks
play a significant and growing role in enabling fraud. In 2022, banks identified
over 39,000 accounts indicative of mule activity.
34
There is also a risk to the
public, who are recruited to supply the mule accounts, and may be lured into
crime through promises of low risk, easy cash fake ‘jobs’. People are taken
advantage of by criminals, and sometimes children are exploited in this way.
149. We will disrupt this crucial money laundering technique and protect the public
by delivering a co-ordinated response from government, regulators, law
enforcement, industry and organisations working with young people. This will
bring together campaigns and education to raise public awareness of the risks
of getting involved, innovation by the financial sector to identify mule networks
and freeze funds, law enforcement work to target the mule recruiters and
controllers, and action by social media companies to close down recruitment
routes, balancing deterrents and safeguarding for identified money mules.
34
CIFAS: Fraudscape 2023
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48
Delivery: how we will make this happen
Delivery of the strategy will require close working, coordination and
cooperation with partners across the system; utilising the unique
capabilities of every partner, each of whom will play a specific and
vital role.
Delivery of the strategy is phased over a 3-year programme of work to the end of 2025, led
and governed by the Home Office. The Home Office and Home Secretary will have overall
accountability for delivery of programme outcomes, with delivery partners responsible for
implementing specific elements of the programme. Each relevant Secretary of State has
accountability for delivery of the elements within their department’s remit, with the Security
Minister responsible for leading cross-partnership engagement and delivery, including
leadership of cross-sectoral industry engagement through the Joint Fraud Taskforce (JFT).
Programme delivery activity for all actions in the strategy is either currently being mobilised
or already in progress.
Our delivery partners
150. This strategy will be delivered in close partnership with three stakeholder
groups:
1. Cross-government partners, agencies and regulatory authorities
including:
▪ Home Office
▪ The UK Intelligence Community (UKIC)
▪ HM Treasury (HMT)
▪ Department for Science, Innovation and Technology (DSIT)
▪ Department for Culture, Media and Sport (DCMS)
▪ Department for Business and Trade (DBT)
▪ Ministry of Justice (MoJ)
▪ The Foreign, Commonwealth and Development Office (FCDO)
▪ Crown Prosecution Service (CPS)
▪ HM Courts and Tribunals Service (HMCTS)
▪ The Financial Conduct Authority (FCA)
▪ The Payment Systems Regulator (PSR)
▪ Ofcom
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▪ The Public Sector Fraud Authority
2. Law enforcement partners:
▪ The National Economic Crime Centre (NECC)
▪ The National Crime Agency (NCA)
▪ The Serious Fraud Office (SFO)
▪ The City of London Police force (in its role as lead police force for
fraud)
▪ Regional Organised Crime Units (ROCUs)
▪ Local police forces
3. Partners across industry and the private sector.
151. The Security Minister is responsible, including through leadership of the Joint
Fraud taskforce (JFT), for cross–government and industry partnerships
necessary to deliver the departmental commitments of this strategy, with
Secretaries of State accountable for the elements of the Strategy within their
Department’s remit.
Governance and oversight
152. A programme board has been established to steer and govern delivery of the
strategy, monitor progress, oversee the outcomes and manage key risks
relating to reform. The board is chaired by the Home Office Director General
for Homeland Security with representation from all delivery partners across
government and law enforcement. The programme board is overseen by the
JFT.
153. This will be supported by local governance infrastructures set up by delivery
partners and will work alongside operational governance bodies. Sitting on
the JFT and working multilaterally, the Anti-Fraud Champion, Anthony Browne
MP will operate between these structures to drive collaboration.
Figure 6 – Governance to deliver the Fraud Strategy
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50
How we will measure success
154. Fraud has returned to pre-pandemic levels as shown in the figure below.
Based on the latest figures available from the Office of National Statistics
(ONS), in the year to December 2022 there were 3.7 million frauds estimated.
Our ambition is to cut fraud by 10% from 2019 levels, down to 3.33 million
frauds by the end of this Parliament. We will prevent over 300,000 frauds
through Pursue interventions alone.
155. The Home Office will continue to engage with industry, academic experts and
stakeholders to strengthen the data and measures to track progress. An
outcomes framework will be developed in line with action 43 of the Economic
Crime Plan 2 to (‘develop an outcomes framework for the Economic Crime
Plan 2’)
35
and will track progress against our aims.
156. The Home Office will begin work on an Evaluation Strategy as a key analytical
product to help build the evidence base around fraud and the interventions
that work to combat it. This will include a clear articulation of the theory of
change underlying the fraud strategy which sets out how and why a desired
change is expected to happen, exploration of the current landscape of
evaluation, an assessment of what evaluation methodologies could be used
at this time and a road map setting out what is needed to build evaluation
capability.
35
Economic Crime Plan 2 2023-26 (publishing.service.gov.uk)
Figure 7 – Incidents of Fraud 2016/17 to 2021/22 from Crime Survey England and Wales
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51
Annexes
Annex 1: Links with other government strategies
This strategy sits alongside a range of other government strategies
and plans that address fraud and other key threats. This section
outlines our dependencies across these different strategies.
Economic Crime Plan
The Economic Crime Plan (ECP) 2019-22, published in 2019, agreed a set of public-
private sector actions to strengthen our response to economic crime. As part of the March
2021 Statement of Progress we set out short-term goals to kick-start our push on fraud. A
new plan was published in 2023. It is the overarching economic crime policy document
and summarises the approach of the Fraud Strategy, as well as setting out our approach
to tackling wider economic crime including money laundering, kleptocracy and sanctions
evasion, and to increase asset recovery from criminals. Within the refreshed Economic
Crime Plan are cross-cutting, complementary approaches to driving down fraud, such as
tackling money mule network recruitment and use, cryptocurrency and general overlapping
illicit finance, and economic crime capabilities and programmes.
National Cyber Strategy
The National Cyber Strategy (NCS) 2022-25, published in December 2021, signals a shift
to a more comprehensive national cyber approach, drawing together our capabilities inside
and outside government. The strategy is guided by the 5 pillars on strengthening our cyber
ecosystem, building resilience, investing in technology, advancing global leadership, and
disrupting our adversaries in cyberspace. By improving our resilience to cyber threats, and
our ability to respond to them, delivery of the NCS will have a significant impact on cyber
facilitated fraud.
Beating Crime Plan
The Beating Crime Plan (BCP), published in 2021, sets out the Government’s overall
approach to tackling crime and keeping the public safe. It outlines the key means by which
it will do this, including by building capability and capacity to deal with fraud and online
crime. It previews the Fraud Strategy, indicating our intent to restrict opportunities for
fraudsters, protect victims and prosecute the criminals that have committed these harmful
crimes. The Fraud Strategy provides the details by which this will be achieved.
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52
Integrated Review
The Integrated Review (IR), published in 2021, focussed on positioning Global Britain to
tackle the most serious threats that affect the country’s sovereignty, security, and
prosperity. The Integrated Review Refresh 2023 updates the Government’s security,
defence, development and foreign policy priorities to reflect changes in the global context
since then. The refreshed IR recognises the importance of fraud as an issue of national
security and the importance of the Fraud Strategy in stopping the exploitation of the UK’s
financial systems and economic openness for domestic and international criminality and
corruption. It also highlights the importance of securing the cyber space and protecting the
country from transnational harms. The Fraud Strategy details how the country will develop
global leadership in tackling this threat, as well as bolstering cyber resilience to fraud
threats.
Serious and Organised Crime Strategy
The UK’s Serious and Organised Crime Strategy, published in 2018, sets out the UK
Government’s approach to tackling serious and organised crime, alongside law
enforcement, the public sector and the private sector. As a significant driver of serious and
organised crime levels and cost to the UK, tackling fraud was identified as a priority, with a
particular emphasis placed on designing out fraud from systems and processes that the
public rely on, as well as enhanced support for victims and vulnerable people. This
emphasis has been expanded as part of the Fraud Strategy but remains at the heart of our
approach.
Digital Strategy 2022
The Digital Strategy, published in 2022, is a cross government strategy which sets out the
Government’s ambitious agenda for digital policy. The Digital Foundation section, which is
aimed at strengthening the foundations of the digital economy, includes policies focussed
on enabling trusted and secure digital identities, making it easier to verify identities online
and share verified identities with trusted partners. Impersonation and identity theft is a key
means for fraudsters to commit their crimes and forms an important part of the Fraud
Strategy.
Tackling Public Sector Fraud
As set out, we will support those tackling fraud against the Exchequer. There are a number
of different government strategies and plans to improve our response to those taking
money from the public purse. DWP published its command paper, Fighting Fraud in the
Welfare System, in May 2022. It sets out government’s plans to address the challenge of
fraud, to stay ahead of evolving threats and to reduce the levels of fraud and error in the
welfare system through an enhanced front-line operation, taking new powers, when
parliamentary time allows, to strengthen government's ability to detect, investigate and
punish fraudsters, and bringing together full force of government and the private sector to
work collectively to tackle fraud. HMRC is uniquely funded by HMT to deliver the UK’s
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53
response to attacks on the tax system and tackle those that deliberately and dishonestly
set out to defraud HMRC by evading tax, stealing public funds or cheating the system in
other ways. The PSFA will publish a Four-Year Functional Strategy that will set out central
government’s response to fraud against the public sector.
Anti-Corruption
Development of a new UK Anti-Corruption Strategy is underway with publication expected
in 2023. The new Strategy will build on the progress made by the UK Anti-Corruption
Strategy 2017-2022 and outline the UK response to strengthen resilience against
corruption and illicit finance in the UK and internationally. Corruption and illicit finance
undermines national security and global stability, it impedes global prosperity and it erodes
trust in institutions while harming its victims. The new Strategy is being developed to
combat this threat.
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Annex 2: Geographic scope
There are differences in how fraud is dealt with in law across the four nations of the UK.
England, Wales and Northern Ireland are covered by the Fraud Act 2006, whereas fraud in
Scotland is predominately dealt with as an offence in common law. Policing and criminal
justice matters are devolved in Scotland and Northern Ireland.
England & Wales
City of London Police are the national lead force for fraud in England and Wales. They
coordinate the reporting, victim support and investigative response to fraud.
There is limited Welsh devolution in the fraud landscape, however, the Welsh government
continues to work in partnership with UK government on fraud, including through
attendance at the Joint Fraud Taskforce.
Northern Ireland
In Northern Ireland, the Department of Justice is responsible for devolved policing and
justice functions, including criminal justice policy, which falls within the competence of the
Northern Ireland Assembly. The Police Service of Northern Ireland (PSNI) is the single
police service in Northern Ireland and is the lead operational agency for serious and
organised crime, working closely with the NCA, HMRC and other relevant agencies. The
Public Prosecution Service for Northern Ireland is the prosecuting authority.
The Organised Crime Task Force (OCTF) is an important forum in the fight against
organised crime in Northern Ireland. The OCTF brings together law enforcement agencies
and relevant government departments and provides strategic leadership for a collective
and collaborative response to the threat posed by organised crime in Northern
Ireland. Private sector engagement is carried out under the OCTF structures. The work of
the OCTF also focuses on collective Pursue and Protect activities to tackle fraud linked to
organised crime, key priorities under the Northern Ireland Organised Crime Strategy.
36
Fraud and related cyber crime incidents in Northern Ireland are generally reported to
Action Fraud or to the PSNI in specific circumstances. Northern Ireland has an
established ‘Scamwise NI Partnership’, chaired by the PSNI, which brings together over 45
organisations with the shared ambition of combatting the threat of fraud. The organisations
involved include representatives from faith groups, youth organisations, and the charity
sector, in addition to government departments, law enforcement and private sector
stakeholders. The work of the partnership includes awareness campaigns to inform the
community about the risk and range of scams, and information sharing between
organisations.
The Northern Ireland Department of Justice attends the Joint Fraud Taskforce.
36
Organised Crime Strategy | Northern Ireland 2021-2024 (octf.gov.uk)
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Scotland
In Scotland, the Crown Office and Procurator Fiscal Service, which operates under the
authority of the Lord Advocate, is the prosecuting authority responsible for the
investigation and prosecution of crime. Police Scotland is the single police service in
Scotland, which works closely with the NCA, HMRC, the FCA and other relevant agencies
in investigating economic crime. Scotland is outside the jurisdiction of Action Fraud and
the Serious Fraud Office, unlike the rest of the UK. Fraud in Scotland is typically reported
directly to Police Scotland, who hold responsibility for fraud investigations. The Scottish
Government published a Scams Prevention, Awareness and Enforcement Strategy in
March 2021. The strategic framework, as set out in the strategy, supports both protect and
pursue activities that seek to reduce the ability of scammers to target and carry out scams
and to reduce the severity of consequences when a scam is successful. Alongside the
strategy, the Scottish Government also established the ‘Scottish Scams Strategic
Partnership’ which brings together a number of public and private partners to adopt a
shared voice and take forward collective advocacy on key issues in relation to scams
prevention, awareness and enforcement.
Scottish Government officials attend the Joint Fraud Taskforce.
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Annex 3: Cost of fraud methodology
The economic and social cost of fraud estimate helps to identify and indicate the scale of
the wider impacts of fraud offences. To calculate this, the costing framework from ‘The
Economic and Social Costs of Crime’ (Home Office, 2018) has been applied.
37
This
updated estimate captures the impact of fraud against individuals in England and Wales in
2019/20.
This annex sets out the approach taken to estimate the economic and social cost of fraud.
Although the cost of fraud can be separated from the total cost of crime, the calculation
framework means that it has been calculated simultaneously with the cost of other crime
types, for example homicide. To allocate costs to the different crime types, the
methodology at times relies on the relative severity of fraud in comparison to the other
crimes included within ‘The Economic and Social Costs of Crime’ (Home Office, 2018).
Therefore, the estimate quoted below cannot be calculated using the information provided
in this annex alone.
Scope
Various estimates exist of the cost of fraud to the UK, which differ in scope and
methodological approach. The economic and social cost of fraud estimates the impact of
fraud against individuals in England & Wales. Due to data constraints, the cost of fraud
offences committed against businesses and the public sector are out of scope of this
estimate.
The estimate is based in the financial year 2019/20. This avoids the use of cost and
volume estimates that are affected by the COVID-19 pandemic.
The estimate captures three main cost areas:
1. Costs in anticipation of fraud e.g., the fraud prevention implemented by banks.
2. Costs as a consequence of fraud e.g., the value of financial losses and emotional
harm.
3. Costs in response to fraud e.g., costs to the police of investigating a crime.
The costs are calculated from a victim-based perspective, and do not include wider
impacts on indirect victims (for example, the emotional harms experienced by friends and
family of the victim). The totality of preventative activity taken by industry against fraud has
37
Home Office (2018) ‘The Economic and Social Costs of Crime, Second Edition’
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/73211
0/the-economic-and-social-costs-of-crime-horr99.pdf
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57
also not been considered. The cost captured in this analysis is therefore partial and will be
an underestimate of the true impact of fraud on society.
Total Cost
The total economic and social cost of fraud to individuals is estimated to be £6.8 billion
(2019/20). There were an estimated 3,675,000 fraud offences in 2019/20.
38
The largest
cost area contributing to the total cost is the financial loss (~£3.1bn), followed by the
emotional harms experienced by victims (~£1.3bn). These are both categorised as ‘costs
as a consequence’ of crime.
Figure 8 – Breakdown of economic and social cost of fraud 19/20.
Methodology
Volume of Fraud Offences
The Crime Survey England and Wales provides estimates for the number of fraud offences
against individuals. In 2019/20, this was estimated at 3,675,000.
39
38
Crime in England and Wales - Office for National Statistics (ons.gov.uk)
39
Crime in England and Wales - Office for National Statistics (ons.gov.uk)
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58
Costs in anticipation
Anticipation costs are incurred prior to the incident. There are two costs estimated:
defensive expenditure and reimbursement administration.
1. Defensive expenditure is defined as money individuals and businesses spend on
crime detection and prevention. For fraud, this encompasses expenditure by banks on
anti-fraud operations to protect their customers from fraud.
40
The total cost of defensive
expenditure protecting individuals against fraud is estimated to be £0.9 billion in
2019/20.
2. The administration cost of setting up and subsequently processing crime-related
insurance and reimbursement claims is an opportunity cost of the employees (e.g.,
premises, salary, and equipment costs) when they could be engaged in other
productive activities in society.
41
It is assumed that the value of fraud claims
reimbursed is directly related to the amount of administration required. The opportunity
cost of processing reimbursements for fraud incidents against individuals is estimated
to be £0.07 billion in 2019/20.
Costs as a consequence
These capture costs borne directly after the crime has occurred. All costs are from a
victim-perspective and include the financial loss, emotional harms, lost output, health
services, and victim services.
1. Value of property loss - The CSEW publishes information on the nature of harm of
fraud offences against individuals, which includes information on financial loss suffered
by victims of fraud.
42
This data is adjusted to estimate the total financial loss
experienced by victims of fraud in 2019/20. The total financial loss due to fraud
incidents against individuals is estimated to be £3.1 billion in 2019/20. This data set
has been used in recognition that losses from recorded offences alone are likely to be
an underestimate.
2. Emotional harm - Some victims of fraud experience emotional harms, as per The
Economic and Social Costs of Crime (Home Office, 2018) a Quality Adjusted Life
Years (QALY) approach is applied to monetise the emotional impacts of anxiety,
depression, and fear on victims. The CSEW publishes information on the number of
victims experiencing specific emotional harms as a victim of fraud.
43
The total
40
UK Finance (2020) ‘Written evidence submitted by UK Finance’.
https://committees.parliament.uk/writtenevidence/18646/pdf/
41
Fraud reimbursement pay-outs are ignored as they do not represent a cost to society; pay-outs are a
transfer of money between an individual and business, and vice versa. The financial loss of fraud is
captured in the ‘Costs as a consequence’ section.
42
ONS (March 2020), Nature of crime: fraud and computer misuse - Office for National Statistics
(ons.gov.uk)
43
ONS (March 2020), Nature of crime: fraud and computer misuse - Office for National Statistics
(ons.gov.uk)
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59
emotional harm caused to direct victims of fraud is estimated to cost £1.3 billion in
2019/20.
1. Health Services - Treatment for the emotional harms incurred by victims of fraud
may be required, and therefore if fewer people were harmed through crime, the
resources used to treat them could be used in alternative activities. This cost
estimate aims to reflect the health service cost by considering the probability of
experiencing the harm
44
alongside the cost to the NHS to provide treatment such as
counselling. The total cost of treating direct victims of fraud is estimated to be £0.5
billion in 2019/20.
2. Lost output - There may be a reduction in economic activity as a result of an
individual being a victim of a crime. To estimate this cost, a similar approach to The
Economic and Social Costs of Crime (Home Office, 2018) is applied, updating
inputs where possible e.g. salary and hours worked. The total lost output from direct
victims of fraud is estimated to be £0.4 billion in 2019/20.
3. Victim services - To estimate a total cost, the total expenditure on Victim Services
is derived from Ministry of Justice (MoJ) funding for the Police and Crime
Commissioners to commission victim services and funding for the Citizens Advice
to deliver the National Witness Service. This is split into expenditure targeted at
different crime types, including fraud, using the relative proportion of total emotional
costs attributed to each crime type (as estimated in the physical and emotional
harms section above). The total victim services cost to victims of fraud is estimated
£3 million in 2019/20.
Costs in response to crime
Fraud offences can result in a cost to law enforcement agencies. This cost depends on the
number of offences investigated and charged. The cost is split into two areas of response:
Police and other Criminal Justice System (CJS) costs.
1. Police costs are incurred when the Police deal with and investigate crimes. The
total 2019/20 central Police budget is split out into different activities the Police
perform (both crime and non-crime) using ‘activity-based costing’ (ABC) data
provided by Police Forces (2006/07). These activities include a breakdown of the
estimated cost of dealing with different crime types, including fraud, and associated
overheads. The budget does not include the cost of agencies outside of the Police
that will investigate fraud incidents (e.g. National Crime Agency, Serious Fraud
Office, Financial Conduct Authority). The police budget allocated to dealing with
fraud incidents is estimated to be £0.2 billion in 2019/20.
44
ONS (March 2020), Nature of crime: fraud and computer misuse - Office for National Statistics
(ons.gov.uk)
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60
2. The CJS (excluding police) cost captures areas relating to charging and
prosecuting, which are described below. The total cost to the CJS is estimated at
£0.3 billion in 2019/20.
2.1 Crown Prosecution Service (CPS)
The CPS is responsible for prosecuting criminal cases that have been investigated
by the police and other investigative organisations in England and Wales. The
resource required to deal with the CPS caseload is costed using the CPS Gross
Operating Expenditure.
2.2 Court and Jury
All court cases start in the Magistrates’ court with the most serious cases being
subsequently escalated to the Crown court where a jury will hear the case. The
Crown and Magistrates cost is estimated using the cost per sitting day of a case
and volumes of court cases, and – for Crown court cases – the opportunity cost of
jurors.
2.3 Legal Defence
Legal assistance can provide legal advice, mediation and representation in court.
This support is provided by either Legal Aid or through private defence. The number
of cases that are supported via Legal Aid relative to private defence and the
respective cost per case is used to estimate the total cost of defence for fraud
cases.
2.4 Probation Service
Probation is a sentence that is not being served in prison. This can be community
sentences or prison release on license or parole. The cost includes probation
officers who supervise and support individuals on probation.
2.5 Prison Service
Offenders may be sentenced to prison for serious fraud offences. The cost of
incarceration is estimated using the MoJ’s annual cost per prison place and prison
statistics.
45
2.6 Youth Offending Teams
The costs of youth offenders are incorporated in the above CJS costs, except for
Youth Offending Teams. Youth Offending Teams support and supervise young
people who are arrested, charged, convicted with an offence. This is estimated
using the total Youth Offending Team budget in 2019/20.
45
MOJ (March 2020) Prison Performance Ratings: 2019 to 2020 GOV.UK (www.gov.uk) and Criminal justice
system statistics quarterly: March 2020 - GOV.UK (www.gov.uk)
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Cost Area
Cost
(£bn)
Calculation
Key inputs
Total
£6.80
Defensive
Expenditure
£0.90
Cost of Tackling Fraud
UK Finance (2020), ‘Written evidence
submitted by UK Finance’.
https://committees.parliament.uk/writtenevid
ence/18646/pdf/
Reimbursement
Administration
£0.07
Total fraud reimbursements
* Proxy for relative
administration cost to total
reimbursement ratio
UK Finance (2022), Annual Fraud Report
2022 | Policy and Guidance | UK Finance
Unpublished data provided directly by the
Association of British Insurers (ABI) for 2019
(administration costs) and 2019/20 (value of
claims).
Financial Loss
£3.10
Sum (volume of CSEW
Value of Loss band * Mid-
point of band)
ONS (March 2020), Nature of crime: fraud
and computer misuse - Office for National
Statistics (ons.gov.uk)
Emotional Harms
£1.30
CSEW fraud volume *
(CSEW likelihood of
sustaining harm * Value of a
Life Year * Reduced Quality
of Life * Duration of harm)
ONS (March 2020), Nature of crime: fraud
and computer misuse - Office for National
Statistics (ons.gov.uk)
HMT (2021), Green Book
Home Office (2018), ‘The Economic and
Social Costs of Crime, Third Edition’
Health Services
£0.50
CSEW fraud volume *
(CSEW likelihood of
sustaining harm * average
number of hours of
counselling required * cost
of a counselling hour)
ONS (March 2020), Nature of crime: fraud
and computer misuse - Office for National
Statistics (ons.gov.uk)
Curtis and Burns (2020), Unit Costs of
Health and Social Care 2020 | PSSRU
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62
Home Office (2018), ‘The Economic and
Social Costs of Crime, Third Edition’
Lost Output
£0.40
Employment rate * [(Hours
taken off work * Median
hourly salary) + [(Duration
of harm – Hours taken off
work) * Proxy for reduced
productivity * Median hourly
salary]] * CSEW volumes
ONS (March 2020), Crime in England and
Wales: Annual Trend and Demographic
Tables - Office for National Statistics
(ons.gov.uk)
Home Office (2018), ‘The Economic and
Social Costs of Crime, Third Edition’
ONS (March 2020), Earnings and hours
worked, all employees: ASHE Table 1 -
Office for National Statistics (ons.gov.uk)
ONS (March 2020), Nature of crime: fraud
and computer misuse - Office for National
Statistics (ons.gov.uk)
Home Office (2018), ‘The Economic and
Social Costs of Crime, Third Edition’
Victim Services
<£0.1
Victim Service total cost *
Relative emotional harm
and volume factor
MoJ (2019), Victim and witness funding
awards - GOV.UK (www.gov.uk)
Citizens Advice (2021), The impact of the
Witness Service - Citizens Advice
ONS (March 2020), Nature of crime: fraud
and computer misuse - Office for National
Statistics (ons.gov.uk)
Police Costs
£0.20
2019/20 Police budget *
Relative Police Activity
Based Costing for fraud in
2006/07 compared to all
Police Recorded Crime
Home Office internal Activity Based Costing
(ABC) data (2006/07)
Home Office (2018), ‘The Economic and
Social Costs of Crime, Third Edition’
Police Recorded Crime, Police recorded
crime and outcomes open data tables -
GOV.UK (www.gov.uk)
Home Office Police Funding (July, 2021),
Police funding for England and Wales 2015
to 2022 - GOV.UK (www.gov.uk)
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63
CJS Costs
£0.30
CPS
CPS expenditure *
Complexity weighting for
fraud (Fraud relative
proportion of court hearing
time * proportion of CPS
volumes)
CPS (2019/20) Bespoke data on CPS
caseload provided by CPS
ONS (July 2022), Crime Severity Score
(Experimental Statistics) - Office for National
Statistics (ons.gov.uk),
ONS (March 2020), Crime in England and
Wales: Appendix tables - Office for National
Statistics (ons.gov.uk)
Jury Service
No. of sitting days * No. of
hearings * No. individuals
on a jury * %
Employed/Unemployed *
Wage
Employed/Unemployed
ONS (March 2020), Earnings and working
hours - Office for National Statistics
(ons.gov.uk)
ONS (December 2020), Index of Labour
Costs per Hour, seasonally adjusted - Office
for National Statistics (ons.gov.uk)
Department for Transport TAG Data Book
(January 2023), TAG data book - GOV.UK
(www.gov.uk)
Courts
No. of sitting days per
hearing * Cost per sitting
day * No. of hearings
MOJ (June 2022) Criminal court statistics
quarterly: January to March 2022 - GOV.UK
(www.gov.uk)
MOJ Internal Data, (March 2020)
Probation
Fraud Probation Total Cost
(2015/16) inflated to
2019/20 prices
Home Office (2018), ‘The Economic and
Social Costs of Crime, Third Edition’
GDP Deflator, GDP deflators at market
prices, and money GDP November 2022
(Autumn Statement) - GOV.UK
(www.gov.uk)
Prison
Vol. sentenced * Av.
sentence length * Av.
proportion of sentence
served * Cost per prisoner
per year
MOJ (March 2020), Criminal justice system
statistics quarterly: March 2020 - GOV.UK
(www.gov.uk)
MOJ (March 2020), Prison Performance
Ratings: 2019 to 2020 - GOV.UK
(www.gov.uk)
Youth Offending
Teams
Relative no. of fraud
offences * Relative severity
of fraud offences * Youth
Justice service budget
MOJ (March 2020), Youth Justice statistics:
2019 to 2020 - GOV.UK (www.gov.uk)
MOJ (March 2020), Prevention and
Diversion Scoping Survey Summary – Youth
Justice Board (June 2021) - Youth Justice
Resource Hub (yjresourcehub.uk)]
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Glossary
▪ Action Fraud: The national reporting centre for fraud and cyber crime in England,
Wales and Northern Ireland. Housed within the City of London Police.
▪ Artificial Intelligence large language models: Complex technical platforms, like
ChatGPT and Google Bard, that employ deep learning and neural networks trained on
large volumes of text that to generate text or perform other tasks.
▪ Authorised fraud or Authorised Push Payment (APP) fraud: A form of fraud in
which victims are manipulated or tricked into authorising payments to fraudsters, often
through social engineering.
▪ Cifas: A not-for-profit fraud prevention service in the United Kingdom.
▪ City of London Police (CoLP): Territorial police force within the City of London. The
National Lead Force for fraud and National Police Chiefs Council (NPCC) lead for
economic and cyber crime.
▪ Cold-calling: Making an unsolicited call to sell a product – in some cases these are
legal, in others they are not (such as when making a call to someone registered with
the Telephone Preference Service or when selling certain products like pensions or
injury claims services).
▪ Cryptocurrency: A digital currency in which transactions are verified and records
maintained by a decentralised system using cryptography, rather than by a centralised
authority.
▪ Data breach: The release of secure or private/confidential information to an untrusted
environment.
▪ DBT: Department for Business and Trade, a ministerial department which was formed
in 2023 to bring business and trade into a single department.
▪ DCMS: Department for Culture, Media and Sport, a ministerial department focussed on
supporting culture, arts, media, sport, tourism and civil society.
▪ Deep-fake: A video of a person in which their face or body is digitally altered so that
they appear to be someone else, typically used maliciously or to spread false
information.
▪ Disclosure Regime: The requirement for prosecutors to disclose to the defence all
material that weakens the prosecution’s case or strengthens the defendant’s case.
▪ DSIT: Department for Science, Innovation and Technology, a ministerial department
which was established in 2023 to bring together relevant parts from the former
Department for Business, Energy and Industrial Strategy and the former Department
for Digital, Culture, Media and Sport.
▪ Fake delivery text: Texts sent by fraudsters claiming to be from a delivery firm. They
trick victims into clicking links or filling in personal details to steal personal information
or infect devices with malicious software.
▪ Financial Conduct Authority (FCA): Conduct regulator for around 51,000 financial
services firms and financial markets in the UK.
▪ Five Eyes: The Five Eyes is an intelligence alliance comprising Australia, Canada,
New Zealand, the United Kingdom, and the United States.
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65
▪ His Majesty’s Treasury (HMT): The ministerial department responsible for financial
services and for the Money Laundering and Payment Services Regulations.
▪ Home Office (UK): The UK Home Office is a ministerial department responsible for
immigration, security and law and order. As part of its responsibility for law and order it
is responsible for tackling fraud against individuals and businesses, primarily for
England and Wales (noting that this matter is devolved in Scotland and Northern
Ireland).
▪ Identity fraud: The use of personal information, stolen through criminal activity, to
obtain goods or services by deception.
▪ Identity theft: The taking of personal information.
▪ Investment fraud: Usually involves criminals contacting people out of the blue and
convincing them to invest in schemes or products that are worthless or do not exist.
Once the criminals have received payment, they cease contact with the victim.
▪ Mass texting services: Services facilitating business-to-customer SMS messaging
that usually is routed onto telecommunications networks differently to person-to-person
messaging.
▪ Money laundering: The concealment of the origins of illegally obtained money.
▪ Money mules: Mules allow criminals to use their bank accounts to store illicit funds
before transferring it to other accounts, helping to hide the dirty money.
▪ National Crime Agency (NCA): The NCA leads the UK’s fight to cut serious and
organised crime working at the forefront of law enforcement, building an intelligence
picture of serious organised crime threats and pursuing the most serious offenders.
▪ National Cyber Security Centre (NCSC): The UK’s technical authority for cyber
threats, providing a unified national response to cyber incidents to minimise harm,
helping with recovery and learning lessons for the future.
▪ National Economic Crime Centre (NECC): The NECC brings together law
enforcement and justice agencies, government departments, regulatory bodies and the
private sector, with a shared objective of driving down serious economic crime,
protecting the public and safeguarding the prosperity of the UK as a financial centre.
▪ National Economic Crime Victim Care Unit (NECVCU): A team of specialist
advocates working within the City of London Police that support vulnerable people who
have fallen victim to fraud and cyber crime, with the aim of safeguarding them and
reducing the possibility of them becoming a repeat victim.
▪ National Fraud Intelligence Bureau (NFIB): Police unit responsible for gathering and
analysing intelligence relating to fraud and financially motivated cyber crime. Part of
City of London Police.
▪ National Trading Standards (NTS): NTS is responsible for gathering intelligence from
around the country to combat rogue traders and a number of priorities including
internet scams.
▪ Ofcom: The UK’s independent communications regulator, regulating the
telecommunications, postal and broadcast industries, and - following the proposed
Online Safety Bill - online companies facilitating user-to-user and search services.
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66
▪ Organised Crime Groups (OCGs): A group which consists of three or more people,
who act together with the purpose of carrying out criminal activities.
▪ Payment Service Provider: An organisation that facilitates payments between
individuals and businesses, such as Mastercard or a bank.
▪ Payment Systems Regulator (PSR): Statutory regulator for the 8 designated
payments systems and their participants.
▪ Public Sector Fraud Authority: The Public Sector Fraud Authority (PSFA) works with
departments and public bodies to understand and reduce the impact of fraud against
the public sector.
▪ Purchase scams: Scams which offer products for sale which don’t exist.
▪ Regional Organised Crime Units (ROCU): There are 10 ROCUs across England and
Wales, which form part of the policing network. They have specialist policing
capabilities focused on tackling organised crime.
▪ Romance fraud: Involves victims being duped into sending money to criminals
purporting to be in a genuine relationship with them.
▪ Serious Fraud Office (SFO): Responsible for investigating and prosecuting cases of
serious or complex fraud and corruption in England, Wales and Northern Ireland.
▪ Serous Crime Prevention Orders: Court imposed civil orders to prevent individuals
involved in serious crime from engaging in certain activities or accessing resources.
▪ SIM farms: SIM farms are devices that can house hundreds of SIM cards, which can
send out thousands of scam texts to defraud the UK public of millions of pounds.
▪ Social engineering: The use of deception to manipulate individuals into divulging
confidential or personal information that may be used for fraudulent purposes.
▪ Software: The programs and other operating information used by a computer.
▪ Spoofing: The act of disguising a communication from an unknown source so that it
looks like it is from a trusted, known source. Spoofing can apply to emails, phone calls
and text messages, or can be more technical such as IP addresses.
▪ Strategic Policing Requirement: The Home Secretary's view of what the current
national threats are, and the national policing capabilities needed to respond.
▪ Tech sector: Large, consumer-facing companies, such as Meta, Alphabet and
Microsoft, that use online platforms to facilitate significant interaction between users.
▪ Unauthorised fraud: A form of fraud, where the victim does not authorise the transfer
of money from their account, such as when they are impersonated to their bank.
▪ User-generated content: Content on online platforms, such as social media, that is
created or shared by a user (as opposed to the platform or a business), that another
user can interact with, such as a tweet or Instagram post.
▪ Vulnerable: A person who, due to their characteristics or circumstances, is at greater
risk of harm, and where they suffer harm, may experience more severe harm.
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