Why the Government is finally acting to tackle the rising tide of fraud

Right now, it can feel like there’s no escape from fraud.

The texts about supposed missed deliveries, which even Rishi Sunak has received. The scam adverts we see on social media and search engines, promoting get rich quick schemes or dud products. The phone calls we receive, trying to work us up into a frenzy about fraudulent activity in our bank accounts.

It’s no surprise, then, that fraud now accounts for over 40 percent of all crime in England and Wales, according to the National Audit Office. Meanwhile, those committing these crimes seem to do so with impunity. The financial cost to victims and law enforcement agencies - £6.8 billion between 2019 and 2020 - is significant, but so too is the impact on businesses, with consumers increasingly distrustful of firms’ communications.

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To fight back, the government last week announced its fraud strategy to ‘turn the tables on fraudsters’. The immediate question is: does it go far enough?

Fraud now accounts for more than 40 percent of all crime in England and Wales, according to the National Audit Office.Fraud now accounts for more than 40 percent of all crime in England and Wales, according to the National Audit Office.
Fraud now accounts for more than 40 percent of all crime in England and Wales, according to the National Audit Office.

Ultimately, time will tell, and it will be up to the consumers and businesses that currently suffer as a result of scams to decide how effective this strategy is in tackling fraud. Will people feel more protected from nuisance calls and scam adverts online and businesses reassured that consumer confidence won’t be undermined by a flood of bad actors online? Will fraud victims be able to get their money back without being made to feel like they were the one to blame?

There are undoubtedly reasons to feel positive about the direction the government is setting. A clampdown on nuisance calls to cover all financial services - something Which? campaigned on for years - is long overdue and should build a general awareness that anyone calling you out of the blue about investing your hard earned money - whether it’s a pension or a new seemingly wonderful money-making opportunity - is a scammer.

Banks have a major role to play in fighting fraud and protecting their customers from malicious scammers - and new laws that should drive up reimbursement levels for victims, with the worst banks named and shamed, are welcome.

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Which? campaigned successfully to bring fraud in scope of the Online Safety Bill and create obligations on online platforms to tackle fraud in paid for advertising. Its inclusion has the power to disrupt fraudsters reaching consumers in scaled attacks. The government mustn’t delay any longer bringing this important piece of legislation into force.

However, tech giants, whose websites and apps are often an easy gateway for fraudsters, must do much more to shut out criminals beyond what is covered in the Online Safety Bill and the fraud strategy as it stands may not be putting enough responsibility on them to take the steps needed.

The Home Office has announced a new sector charter for the tech industry. They already have similar ones in place for the telecoms industry, banks and accounting. The ambition is that these voluntary charters will mean that fraud data is shared between the sector and the government. Which? research has revealed how important shared data is to prevent fraudsters repeatedly infiltrating channels and using them to launch scaled attacks via text, email or posts on consumers. In particular the fraud data from platforms will be vital in this fight.

We are not convinced that a voluntary approach will incentivise platforms to recognise and act on their pivotal position to help prevent fraud by sharing and using data. The Home Office strategy isn’t clear how or when fraud data will be shared across sectors.

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Tackling fraud won’t be done by the government alone. Government, law enforcement agencies, banks, telecoms and social media giants will all have to work together, sharing information and strategies to disrupt and prevent fraudsters from getting to consumers at all. And if they don’t do enough of their own accord, then ministers must be prepared to step in to make it happen.