PAC: UK risks being seen as “haven for fraudsters” where fraud is “everyone’s problem but no one’s priority"

31 March 2023

Home Office “sluggish and outmanoeuvred” in operations with business sectors
Police morale and public trust both undermined by system failures
Much fraud has international element and overall fight is hampered by UK lack of capacity

Fraud against businesses and individuals is a significant and growing problem that now accounts for 41% of all crimes committed in England and Wales. There were 3.8 million incidents of actual or attempted fraud in the year to June 2022, and nearly 7% of adults in England and Wales experiencing fraud or at least an attempt. While those numbers increase, charges and summonses are dropping.

Combatting fraud is ultimately the responsibility of the Home Office, and in a report today the Public Accounts Committee is deeply disappointed in the slow progress made by government in the last five years. The Home Office’s most recent estimate of the cost of fraud to individuals is £4.7 billion a year but it can’t quantify the potential cost to businesses.

Law enforcement is not set up to tackle the challenges presented by fraud. The volume and complexity of fraud overwhelms the capacity of both Action Fraud and local police forces, who lack the training and resources they need to pursue the hundreds of thousands of cases reported every year. Police morale is being undermined by the time it takes to investigate and prosecute fraud and then the relatively short sentences handed out when prosecutions are successful.

The Home Office is dependent on the banking, technology, telecoms and retail sectors to fight fraud, but will continue to be sluggish and outmanoeuvred if it relies on purely voluntary charters with these sectors.

The majority of frauds are also suspected to have an international element, but relationships with overseas criminal justice agencies are immature and threatened by the UK’s lack of domestic capacity.

Chair's comments

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said:

“Given the pervasive and damaging effects of fraud on business, individuals, and society it is extremely poor performance that Government still isn’t even able to fully grasp the extent let alone reduce the prevalence or harms. There is just no sign that government has a grip on fraud or an adequate strategy to address it, while victims are left to pay the price.

Becoming a victim of fraud can cause lasting psychological damage. It can mean losing a lifetime’s savings, your whole retirement plan, or even your current business and livelihood. The system is so poorly resourced and co-ordinated compared to the problem it’s addressing that victims feel lost in the system and without hope of recourse. Opportunities to prevent further harm are being missed and public trust in law enforcement is undermined.”

Further information

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