As far back as 2018, I voiced concerns in the FCPA Blog about the problems of rampant fraud in the UK. In a new report, the Royal United Services Institute (RUSI), a distinguished British think tank founded by the Duke of Wellington, described the fraud threat as an epidemic that is “now a national security threat.”
The RUSI report, “The Silent Threat: The Impact of Fraud on UK National Security,” states that UK law enforcement and intelligence agencies need to step-up and dig-in in response to this crisis.
This is currently a rearguard action, however, and the UK and its law enforcement agencies are being overrun in the trenches. Fixing bayonets and fighting for control is one thing, but this scourge demands a coordinated approach, and more significantly investment commensurate to the level of the threat.
My UK-based investigator is a retired fraud squad detective who also lectures on the subject at a university. He has voiced concerns repeatedly over the last decade that cutbacks have severely affected UK policing’s ability to stem the fraud menace. He explained that austerity measures have seen whole fraud squads disbanded, and the number of specialist detectives greatly reduced.
Only partial blame can be placed at the feet of police leadership. The UK government must also face up to its culpability. Why am I cutting the Chief Constables a little slack? They must ensure that emergency frontline police responders are available to the public. In the context of this obligation, fraud detectives were seen as a luxury, and we have seen their numbers dwindling to the point that one could ask: have they lost relevancy? Sadly, despite the cuts and despite the loss of specialist fraud investigators, many emergency calls are still not being answered in line with targets.
Much has been made of the British government’s pledge to recruit 20,000 new police officers. This sounds reassuring until you realize that this is a similar figure to the number of officers lost to austerity cuts: it will only result in re-establishing the historical status quo. In addition, if UK policing does decide to embrace fraud squads once again, in light of these dreadful figures it will take years to train the new officers to become specialist fraud investigators. There is no short-term fix as the horse has already bolted.
The UK’s short-sighted and inept approach to fraud is as offensive as the offenses being perpetrated. RUSI makes the point that the sheer scale of the problem is affecting global confidence in the UK as a place to do business. The UK’s reputation is in tatters, despite innumerable commentators voicing their concerns.
Fraud is the most common crime inflicted on the UK public. The scale of the problem is likely to be even more severe than the figures (an astonishing $260 billion) would indicate, as fraud is notoriously under-reported. Fraud is under-reported because victims believe that nobody will investigate the crime, and the fear that victims will be seen as unsympathetic, greedy or gullible.
The English case of R v Jones (1703) springs to mind, with the presiding judge offering this disheartening (but typical) observation to the victim of a fraud: “[T]his is an Indictment to punish one Man, because another is a Fool.”
One would think that this doubtful approach to supporting victims would have been confined to the annals of history, but it appears not. The UK’s central reporting portal for victims to report fraud (Action Fraud) has been called into question repeatedly for merely paying lip service to the problem, and moving the onus from the police to investigate each case on its merits, instead placing trust in algorithms to highlight cases that may be viable.
The popular UK consumer rights magazine, Which?, poured scorn on Action Fraud in an article titled: “Scam victims ignored by police fraud reporting system – Action Fraud branded ‘unfit for purpose’ by the very police officers who rely on it.”
The Which? article followed closely a Times of London storyhighlighting an undercover sting the paper’s team had designed to highlight not only the system’s shortcomings, but also how members of staff treated fraud victims when they tried to report crimes.
The resulting article was as damning a review as one could imagine. The embedded video that accompanied it makes for uncomfortable viewing, especially for those of us who have dedicated our professional lives to preventing or attacking fraud and understanding the havoc it reeks.
The UK government should heed RUSI’s words, as should law enforcement. It is difficult to see how anything will improve the situation, other than bringing back specialist fraud squads and investigators as soon as possible.
With thanks to Tony McClements, Senior Investigator at Martin Kenney & Co, for his assistance with this post. He served for 33 years with UK police forces and has specialized in Fraud & Financial Investigation since 1998. He is also a lecturer in these subjects at the University of Central Lancashire (UCLAN).