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 (NAO).
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Although the City of London Police is the national lead force for online fraud and runs the Action Fraud national centre for reporting fraud, police and crime commissioners and chief constables are responsible for policing in their local areas.
Despite the fact the face of crime is changing, the NAO’s report said police forces take different approaches to tackling online fraud and for some it is not a priority. Only 27 out of 41 police and crime commissioners refer to online fraud in their most recent annual police and crime plans.
“For too long, as a low value but high volume crime, online fraud has been overlooked by government, law enforcement and industry,” said Amyas Morse, head of the National Audit Office.
“It is now the most commonly experienced crime in England and Wales and demands an urgent response. While the Home Office is not solely responsible for reducing and preventing online fraud, it is the only body that can oversee the system and lead change.
“The launch of the Joint Fraud Taskforce in February 2016 was a positive step, but there is still much work to be done. At this stage, it is hard to judge that the response to online fraud is proportionate, efficient or effective,” he said.
In the year ending 30 September 2016, the Office for National Statistics (ONS) estimated that there were 1.9 million estimated incidents of cyber-related fraud in England and Wales, or 16% of all estimated crime incidents.
Online fraud includes criminals accessing citizens’ and businesses’ bank accounts, using their plastic card details, or tricking them into transferring money.
“Hidden” crimes require new and different responses yet, despite the level of economic crime, statistics suggest police forces remain more focused on traditional crimes, the report said, highlighting that in 2016, one in six police officers’ main function was neighbourhood policing, while only one in 150 police officers’ main function was economic crime.
According to the NAO, the Joint Fraud Taskforce set up by the Home Office to raise awareness of online fraud, reduce card not present fraud and to return money to fraud victims is a positive step. But the report said the Home Office faces a challenge in influencing other partners such as banks and law enforcement bodies to take on responsibility for preventing and reducing fraud. The report said £130mis held in banks that cannot accurately be traced back and returned to fraud victims.
In addition, without accurate data, the report said the Home Office 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,” the report said.
Measuring the impact of campaigns and the contribution government makes to improving online behaviours is challenging, according to the NAO.
The Home Office 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 report said.
According to the NAO, 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, the report said that different organisations running campaigns, with slightly different messages, can confuse the public and reduce the campaigns’ impact.
While educating consumers is sensible, the NAO said government and industry still have a responsibility to protect citizens and businesses. The report said 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.
Although 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 NAO said there is no clear mechanism for identifying, developing and sharing good practice to prevent people becoming victims.
The government wants the police and judiciary to make greater use of existing laws, but 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 co-operation and an ability to take action across borders, the report said.
A lack of data on fraudsters
The nature of online fraud makes it difficult to pursue and prosecute criminals, the report notes. In addition, there is a lack of data on how many fraudsters are prosecuted and judicial outcomes for fraud offences, and there are also concerns about the sentences fraudsters receive.
The British Retail Consortium (BRC) said the report correctly identifies the scale and complexity of this growing problem including the risks to the retail industry.
“We welcome the recognition of the need for retailers to be fully integrated into the UK’s response,” said Tom Ironside, director for business and regulation at the BRC.
“The BRC’s 2017 crime survey found that fraud costs retailers around £183m in 2015/16, around 53% of which is cyber-enabled,” he said.
“To address this, the retail industry strongly supports a much closer partnership between the government, law enforcement and industry to tackle online fraud. We look forward to continuing to work with the Home Office and other stakeholders in addressing this challenge for the benefit of retailers and the customers they serve.”