The private sector: an untapped resource in the fight against fraud

Hot on the heels of the Government’s Fraud Strategy[1] (announced on 3 May 2023), an interesting new private sector project was announced this month, showcasing the possibilities of the private sector in the ongoing effort to combat fraud.

Stop Scams UK[2] describes itself as, “an industry-led collaboration of responsible businesses from across the banking, telecoms and technology sectors who have come together to help stop scams at source.” The 21 members comprise banks, tech and telecoms companies, including multinational giants HSBC, Google and Meta. Engagement from such influential organisations is both indicative of the scale of the problem and reflective of public pressure for private companies to take more responsibility in combating fraud. 

As a relatively new not-for-profit company, Stop Scams UK has shown that anti-fraud innovation in the private sector can yield impressive results. In September 2021 the cross-industry group launched a phone service which allows consumers to connect quickly to their bank by dialling 159 – a helpful circuit-breaker if someone is trying to trick them into handing over money or their personal details. To date over 350,000 calls have been made to 159. The group has also worked with BT and TalkTalk to develop URL-blocking on telephone networks both to protect consumers from impersonation scams and protect firms from being impersonated. To date over 48,000 malicious URLs have been blocked.

On 23 May 2023 Stop Scams UK announced the launch of a pilot information-sharing scheme which aims to gathering intelligence on scammers by interacting with them using 100 email addresses and 300 phone numbers operated by the group’s members. It is unclear from the press releases or the company’s website what will be done with the data gathered; whether it will be analysed, and, if so, how. It is also unclear when or how such data might be handed to law enforcement authorities, and there is no scope or timeframe on the project, making success hard to assess.

Notwithstanding this, the benefits of such an approach are clear. Far too often fraud prosecutions encounter repeated difficulties in obtaining information from financial institutions or tech companies, given concerns regarding data protection, or simply as a result of complex information-storing processes that make it technically and legally difficult to pass on the information required. Greater openness is key to preventing criminals from hiding behind layered webs of multiple accounts.

Equally clear is the necessity for such an approach from the private sector. We have written about the “steady and constant decline” in fraud prosecutions, underpinned by the abject failure of Action Fraud. The new Fraud Strategy is, as we have previously commented, to be welcomed, but the Government has already faced criticism for the Strategy’s shortfalls, including the failure to engage with the need for a regulatory framework on tech platforms and the failure to centralise resources to combat fraud. There is also, always, the constant call for more resources, and it is clear that unless the Strategy will be properly funded, fraudsters will continue to have the upper hand.

In such circumstances, the foundation for more innovation within the private sector, and for public/private partnerships is well laid, and private prosecutions continue to be a valuable resource in the fight against fraud.

Carolina Cabral