MPs have accused ministers and law enforcement agencies of treating economic crime as an “afterthought” and urged the government to put more resources into tackling the UK’s “fraud epidemic”.
Too much focus on “traditional” crime, “confused” lines of accountability and court delays had left the justice system “ill-equipped” to deal with a rising tide of fraud, according to a House of Commons Justice select committee report published on Tuesday.
The report comes as the UK grapples with a sharp increase in digital financial crime following the coronavirus pandemic when many people spent more time on the internet.
Cases of reported online fraud rose by a third between April 2020 and March 2021 according to analysis of UK police unit Action Fraud data by consumer group Which? Victims lost more than £2.3bn as a result.
Criminals adapted their methods during the Covid crisis to exploit victims’ fears over coronavirus. They are now turning their attention to the cost of living crisis. Scams mentioning the UK’s six biggest energy companies rose 10 per cent year-on-year in the first quarter of 2022, according to online protection company McAfee.
Sir Bob Neil MP, chair of the justice committee, said: “Fraud currently accounts for 40 per cent of crime and the figure is growing. People are losing their life savings and suffering lasting emotional and psychological harm. But the level of concern from law enforcement falls short of what is required.
“Fraud prevention, investigation and prosecution too often has seemed like an afterthought, last in the queue for resources, monitoring and even court time,” he added.
The committee found that only 2 per cent of police funding was dedicated to combating fraud, despite it accounting for 40 per cent of reported crime. Only 380 officers out of a fresh intake of 20,000 to be recruited by 2023 would be dedicated to tackling fraud, it said.
The committee advocated the creation of new economic crime courts to deal with fraud including cyber crime as a way of cutting through the court backlog.
The backlog of crown court cases jumped to 61,212 in August from 60,380 in July, according to the Ministry of Justice. When the pandemic hit in March 2020 the backlog stood at 40,000.
The government included plans to open a flagship economic crime court in central London in its latest economic crime plan but the committee said such courtrooms should be rolled out across the UK, if successful.
A failure by the government and law enforcement to prioritise economic crime was compounded by a lack of local or regional data on fraud, which meant that police were not being held accountable for their performance, the committee said.
The committee criticised Action Fraud, the UK’s national reporting centre for fraud and cyber crime, for its inadequate response to victims some of whom referred to the body as “a bottomless pit”.
“Action Fraud has proven itself unfit for purpose and while a replacement reporting system is expected in 2024, victims should not have to wait this long to see improvements in the service they receive,” said the committed.
But, it added, “despite its flaws” Action Fraud had played an important role in tackling crime and that its successor should be better resourced.
The government said it remained “absolutely committed to cracking down on the shameless scammers stealing cash from hard-working families”.
“Our upcoming fraud strategy will consider all possible tools required to go after fraudsters and protect those who are most vulnerable to these crimes,” it added.
The government said it would introduce a new, “user-friendly reporting tool and website . . . offering an improved experience for victims” in early 2023.
Assistant commissioner Peter O’Doherty of City of London police said Action Fraud was the first national system for fraud reporting anywhere in the world. “Having a national central system allows us to see the whole picture and piece together all of the information available to us,” he said.