Rishi Sunak has revealed government plans to “take the fight” against scammers and fraudsters, as he explained that “the time has come to put the fraudsters out of business”. At a time when fraud accounts for over 40 per cent of crime in the UK, what do the new measures cover, and are they enough?
Fraud costs people in the UK a total nearing £7billion a year. Most people in the UK have received calls or texts from fraudsters impersonating banks or organisations, trying to get access to their money. Authorised Push Payment (APP) fraud has also been especially prevalent. In 2021 the cases increased by 39 per cent, with losses surpassing £583million for APP fraud alone.
With fraud remaining prevalent and causing so much disruption in the country, questions remain about whether the new government measures are far-reaching enough to make a significant difference.
What are the new measures?
Sunak revealed plans to launch a new taskforce: the ‘National Fraud Squad’, which will be led by the National Crime Agency and the City of London Police. 400 new specialist investigators will form the squad in an effort to tackle fraud at its source.
The government also explained that it will enhance its work with international partners and make greater use of the UK’s intelligence community to identify and disrupt more fraudsters overseas.
Another method used to crack down on fraud will be working closely with Ofcom to reduce the number of ‘spoofing’ cases, where scammers impersonate UK numbers and trick people into thinking they’re speaking to banks, telephone companies or other legitimate businesses.
In recognition that reporting fraud can be difficult in some cases, a £30million investment into a new reporting centre was also revealed. In a government release, it is explained that the centre will be operational in the year. Work is also being done with technology companies to make it easier to report fraud online. Regardless of which social media platform you use, it should become possible to find the ‘report’ button with a single click.
One final consideration concerns giving banks more time to process payments, which may enable them to investigate a greater number of suspicious payments and reduce successful cases of fraud.
A ‘welcome’ change
Nick Kerpe, head of customer relations at FCA-regulated authorised payment institution, Monevium, explained how the fraud strategy introduced could have a big positive impact against fraud:
“The growing misuse of messaging services in order to attempt to dupe unsuspecting members of the public into parting with funds by making them think they are investing in a legitimate financial service or product by fraudsters has been a serious problem in the United Kingdom recently.
“This move by the government is very much a welcome one and will serve to protect the public as well as ensure a good market presence for the provision of genuine financial products by bona fide firms who will be able to provide valuable information to customers on new products without customers having to worry whether it is genuine or not.
“Of course, there will always be the occasional miscreant who will attempt to use overseas numbers to do this from, but these are much easier spotted by the public and distinguished as scams.”
Cooperation and collaboration are key
Zoe Newman, regional managing director, EMEA and global co-head of the Financial Investigations practice at Kroll, a risk and financial advisory solution provider, discusses how the strategy is a positive starting point – but improvements need to be made on past efforts to prevent fraud.
“The government’s new strategy proposal, and particularly the launch of a dedicated ‘National Fraud Squad’, is a significant development to combat fraud in the UK. Organised crime groups are just that, organised, nimble and international and as such we are witnessing large-scale fraud attacks that are not only targeting individuals but also corporates.
“However, if the new National Fraud Squad is to succeed, it will need to find a way to build fast and effective international cooperation with other organisations, sharing intel with partner enforcement agencies. Tackling organised international crime requires an organised international response and this is something which unfortunately has been lacking in the past.”
‘We need to embrace the benefits of a fully digital identity verification process’
Colum Lyons, CEO of identity verification provider ID-Pal, explained that organisations and the government cannot afford to sit still with much more to be done in the fight against fraud:
“Having a definitive strategy is commendable – however, it will take more than a policy change. There needs to be a concerted cross-sector effort to ensure organisations are doing all they can to protect themselves, each other and consumers.”
“Embracing AI-powered fraud prevention technology is central to this. As fraudsters develop ever-increasing ways of committing fraud and financial crime, businesses have a responsibility to ensure that they are using the most secure, advanced tools to verify their customers as part of their Know Your Customer (KYC) obligations and to safeguard their personal information at all times.”
“Targeted efforts to mitigate fraud in financial services specifically, such as the widespread adoption of Confirmation of Payee (CoP) by over 400 payments service providers and the introduction of the long-awaited Failure to Prevent Fraud (FTP) offence, are steps in the right direction but there also needs to be a fundamental cultural shift across not only financially regulated sectors to prioritise how to securely capture, verify and store customer identity documents but the same shift is needed amongst providers of fraud prevention technologies too.”
“The technology now exists, through firms like ID-Pal, to enable biometric, document and database checks that don’t compromise user experience but actually enhance it. Solutions that are designed with security at their core, in order to prevent fraud at source. We need to embrace the benefits of a fully digital identity verification process. Otherwise, organisations will leave themselves with a fraud prevention strategy that is not fit for purpose. By not having a unified approach across all channels, sectors and providers, we’re allowing fraudsters to win.”