“Nothing of any substance is happening that would actually deter certainly a professional fraudster, or even deter the normal fraudster.”
The above comment was made by prominent barrister and fraud specialist Clare Montgomery KC during a recent podcast interview[1], in which she went on to state that there had been, “a steady and constant decline in the level of interest in prosecuting fraud from 1990 onwards”. As was noted by the podcast hosts, not only does this have a negative effect on Britain’s reputation as a state in which it is safe to do business at a high level, it also has the politically and economically significant consequence of victims of low-level fraud having no faith that the State will do anything if they are defrauded.
For practitioners working in the field of fraud, these comments will not come as a surprise. The current funding crisis engulfing the criminal justice system has resulted in a lack of resources at all stages of the process, from investigation and prosecution through to the probation and prison services. Whilst over the past decade there has been a noticeable amount of media and political coverage regarding the low reporting and conviction rates for sexual offences, fraud has not received the same level of coverage – particularly the type of low-level fraud that would not be of interest to the SFO but might result in an individual losing their life savings.
Such individuals are encouraged to make a report to Action Fraud, the UK’s national reporting centre for fraud and cybercrime, run by the City of London Police[2]. However, a damning 2019 expose[3] of the helpline revealed that callers were being misled into believing they were talking to police officers, when in fact the call handlers were civilians and had undertaken only two weeks of training. These call handlers would then make the decision whether to file a case as a crime report, or an information report: about half of all reports were instead filed as information reports and were unlikely to be looked at again.
On 22 March 2022 the Minister for Security and Borders Damian Hinds MP, speaking to the House of Commons Justice Committee[4], announced that a process of “redesigning and recreating Action Fraud” was underway and would be complete in 2024. On 18 October 2022 the Committee published its Report on Fraud and the Justice System[5]. This report opined that fraud did not sit naturally with the other elements of the Minister for Security and Borders’ extensive portfolio. It recommended that fraud and other economic crime should sit within a Ministerial portfolio that would allow the postholder to make it a priority, and create a unified approach to tackling fraud, giving the issue more publicly visible political and governmental ownership and accountability. The report also inter alia:
- Emphasised the need for a higher quality service to be provided by the new iteration of Action Fraud;
- Recommended the Government put in place sufficient funding and police resources to bring about a step-change in the response to fraud; and
- Recommended that the Government work with the Judiciary to pilot the establishment of economic crime courts, as well as requiring the Attorney General to review current disclosure guidelines with a view to introducing fraud-specific guidance in cases with large quantities of digital material.
On 11 January 2023 the Government published its response[6] to this Report, in which it insisted that the Security Minister was best-placed to bring together key stakeholders in both the public and private sectors to combat fraud. The response also stated that over the next three years £30 million would be provided to the City of London Police to support the Action Fraud upgrade and £400 million would be allocated to tackling economic crime. Declining the proposal to establish courts dedicated to economic crime, the Government instead stated that the priority was the reduce the Crown Court backlog and continue with the planned construction of the City of London Law Courts[7], which are anticipated to focus on high-level fraud, cyber and economic crime.
For those who wish to take control of the process, a private prosecution can present a positive solution, enabling the individual to control the speed of the investigation and prosecution, rather than relying on Action Fraud, the Police or the CPS.
Carolina Cabral
[1] Double Jeopardy Podcast, hosted by Ken Macdonald and Tim Owen, episode 17: Clare Montgomery KC – Getting Away With Fraud
[2] https://www.actionfraud.police.uk/
[3] https://www.thetimes.co.uk/article/action-fraud-investigation-victims-misled-and-mocked-as-police-fail-to-investigate-wlh8c6rs6
[4] https://committees.parliament.uk/oralevidence/10127/html/
[5] https://committees.parliament.uk/publications/30328/documents/175363/default/
[6] https://committees.parliament.uk/publications/33421/documents/181645/default/
[7] https://www.gov.uk/government/news/construction-begins-on-brand-new-flagship-london-court-in-the-square-mile
