25 February 2018
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National Audit Office points finger at banks and Government for failing to combat fraud

05 July 2017  |  3501 views  |  0 Source: National Audit Office

Fraud is the most commonly experienced crime in England and Wales and most happens online. While the landscape for tackling online fraud is complex, the Home Office’s response is not proportionate to the threat, according to the National Audit Office.

The City of London Police is the national lead force for online fraud and runs Action Fraud, the national centre for reporting fraud. Police and Crime Commissioners and chief constables are however responsible for policing in their local areas. Today’s report found, however, that although the face of crime is changing, forces take different approaches to tackling online fraud and for some it is not a priority.

According to the NAO, the Joint Fraud Taskforce, led by Home Office Ministers, is a positive step. The Department, through the Taskforce, is seeking to raise awareness of online fraud, reduce card not present fraud and to return money to fraud victims. Today’s report found however that the Department faces a challenge in influencing other partners such as banks and law enforcement bodies to take on responsibility for preventing and reducing fraud.

In addition, without accurate data, the Department does not know whether its response is sufficient or adequate. Not only is online fraud under-reported, but where data is available, there is a lack of sharing of information between government, industry and law enforcement agencies. There is, for example, no formal requirement for banks to report fraud or share reports with government.

Measuring the impact of campaigns and the contribution government makes to improving online behaviours is challenging. The Department is evaluating the Take Five campaign, one of many campaigns run by the government and other bodies to educate people, but this will not be completed until March 2018. The growing scale of online fraud suggests that many people are still not aware of the risks and that there is much to do to change behaviour. In addition, different organisations running campaigns, with slightly different messages, can confuse the public and reduce the campaigns’ impact.

While educating consumers is sensible, government and industry still have a responsibility to protect citizens and businesses. The NAO found the protection banks provide varies, with some investing more than others in educating customers and improving their anti-fraud technology. The ways banks work together in responding to scams also needs to improve.

Today’s report found there is no clear mechanism for identifying, developing and sharing good practice to prevent people becoming victims. There are examples of good practice in protecting people against online fraud, such as Sussex Police’s initiative to help bodies such as banks and charities identify potential victims.

The nature of online fraud makes it difficult to pursue and prosecute criminals. In addition, there is a lack of data on how many fraudsters are prosecuted and judicial outcomes for fraud offences; there are also concerns about the sentences fraudsters receive. Although the government wants the police and judiciary to make greater use of existing laws, the NAO found that stakeholders had mixed views on the adequacy of current legislation. The international and hidden nature of online fraud makes it difficult to pursue and prosecute criminals because of the need for international cooperation and an ability to take action across borders.

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