We must turn the tide on Britain's rampant fraud problem
The recent resignation of the government’s anti-fraud minister, Lord Agnew, was a dramatic and critical reminder of the scale of the UK’s rampant fraud problem and its inability to tackle it.
From phishing emails alleging to be from the NHS and fake parcel delivery texts, we have all felt the impact of fraud during the pandemic, even if we have not fallen victim to it ourselves.
Today, fraud makes up 42 per cent of crime against individuals amounting to losses of over £2bn a year. Yet too few fraudsters are prosecuted and too many victims are left financially and emotionally wounded.
In his resignation speech, Lord Agnew said this failure was due to “a combination of arrogance, indolence and ignorance”. That’s why I am proud that the House of Lords has launched a new inquiry into the Fraud Act 2006 and Digital Fraud. The committee is certainly no stranger to fraud; no less than five of our members have been contacted in the past week alone about fraudulent activity of one form or another, some by scammers themselves.
Fraudsters today have more avenues than ever by which to target their victims
Fraud has long been on my radar. During my tenure as chair of the Commons Treasury Committee in 2019, we made several recommendations to address how economic crime affects consumers. The same Committee has just published a new report on the same topic, three years on, proving how little has changed.
As Secretary of State for Digital, Culture, Media and Sport, I had a leading role in considering how the internet should be regulated. This was of course before the pandemic forced people to move even more of their lives online, including how they bank. This reliance on digital technologies is not going to go away.
The growth of the UK’s technology sector will fuel our ability to stay competitive within dynamically changing world markets. At the same time, the digital realm has presented new opportunities for criminals. Getting the balance right between supporting its growth and ensuring that tech companies are accountable for the harms facilitated via their platforms is one of the areas we will explore. Central to this will be looking in depth at how the draft Online Safety Bill will deal with fraud.
Whilst looking at future legislation is paramount, our inquiry will also explore how well existing provisions are being used to hold fraudsters to account. The Fraud Act 2006 is now over 15 years old. When it was granted royal assent, Facebook had just opened to anyone over 13, Instagram and Snapchat didn’t exist, and nobody had dreamt of Bitcoin. Looking even further back, the Computer Misuse Act 1990, which governs cyber-offences, is over 30 years old and predates Google by eight years.
Fraudsters today have more avenues than ever by which to target their victims. Many use social media platforms to boast about their activities and target vulnerable young people to act as money mules. Far from being the preserve of a few sophisticated fraudsters, cyber-fraud is on the rise. Today, 80 per cent of reported fraud is cyber-enabled and taken together, fraud and cyber-crime represent over half of all crime.
Our inquiry will explore how we can disrupt the business model by which modern scammers operate, without jeopardising the growth of the UK’s world-leading tech sector. It will ask whether current and draft legislation adequately addresses the range of tools in a fraudster’s arsenal and will seek to make recommendations that bring the legislative and regulatory response to fraud up to date.
In his resignation speech, Lord Agnew called for the government to “wake up” to fraud, and said he hoped his resignation might prompt others to take action. We hear his call and will follow in the footsteps of both the Commons Treasury and Justice Committees to carry the baton to the House of Lords.
Our committee will act with both humility and diligence to ask what is being done, what can be done and what should be done to tackle the persistent and pestilent fraudsters ravaging the UK’s pockets.
Baroness Morgan is a conservative peer, chair of the Lords Committee on the Fraud Act 2006 and Digital Fraud. She is a former Secretary of State for Education and Secretary of State for Digital, Culture, Media and Sport.
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