Why the next government must make fraud a national priority
Rocio Concha, Director of Policy and Advocacy
| Which?
Fraud remains England and Wales' most common crime, and last year victims lost over £1bn. To fight back, Which? believes the next government has both an opportunity and an obligation to make tackling fraud a national priority.
A text message notifying you about a missed parcel with a bogus link for redelivery. A social media account purporting to be a major airline informing you they can help retrieve your money on a delayed or cancelled flight. An investment opportunity promising high returns on low outlays in the midst of a cost of living crisis. Fraud has become so insidious and pernicious that there are very few opportunities scammers won’t pass up to try to get their hands on your money.
Little wonder, then, that it’s England and Wales’ most common crime. Recently released figures from banking trade body UK Finance underline the extent to which this terrible crime is blighting the lives of so many people across the country. Losses to fraud surpassed £1bn for another consecutive year - equivalent to £2,300 lost every single minute. Last year, there were 207,372 incidents of authorised push payment scams reported in 2022 with gross losses of £485.2m.
The devastating impact of scams go far beyond the financial losses victims incur. Becoming a victim of fraud can have a huge psychological effect, leading to anxiety, depression and low self-esteem. It can also make people less confident and willing to buy new products and services online for fear the websites might not be genuine. Fraud also imposes additional costs on businesses through reputational damage.
The rapid rise of artificial intelligence (AI) will turbocharge online fraud, providing already ruthless scammers with even more tools to add to their arsenal. The ability to spot what’s real and bogus is already challenging enough for consumers at the mercy of increasingly sophisticated fraudsters. With AI it is becoming almost impossible without support.
Unless serious, concerted action across industries is taken, these depressing statistics will continue to be a reality of everyday life. The current government’s Fraud Strategy is a first step in setting out a plan to protect consumers, but Which? believes more needs to be done to bring in a wider network of actors, all of whom have a role to play to plug existing gaps in the system.
That’s why Which? believes that the next government has both an opportunity and obligation to make fraud a national priority.
It must do so firstly by appointing a designated fraud minister. The current government did first create an anti-fraud champion, Anthony Browne, in May 2023. By December, Simon Fell had replaced Browne. While under the confines of this role (it is unpaid and only voluntary), both did a good job, the lack of ministerial clout and authority left them unable to make the progress needed. A fraud minister, working at the heart of government and not at the margins, can drive forward the urgent actions needed across government and business to finally turn the tide.
What does that mean in practice?
First, it means ensuring that tech giants like Meta and Google, which provide services where fraud can often start through paid-for adverts ensnaring users, are properly held accountable for removing the fraudulent activity appearing on their sites. The Online Safety Act hands the media regulator Ofcom the powers to fine firms that fall short of industry standards - and it’s imperative that those standards are set high so that consumers can use these platforms with confidence.
Second, consumers need to know that banks and payment providers will treat them fairly and consistently should they fall victim to a bank transfer scam. From October, new rules are due to come into force that compel major banks and over 1,500 payment service providers to reimburse fraud victims unless they are at fault. Unsurprisingly, some sections of the banking and payments industry have been plotting to weaken or undermine these rules, which have been the result of years of painstaking consultation. The next government should give these arguments short shrift and put in place a reimbursement model consumers can trust.
Third, new duties, equivalent to existing obligations for banks and online platforms, should be placed on telecom providers, online advertisers and domain registrars to ensure they verify the legitimacy of users. This would require the next government to bring forward legislation.
Fourth, encourage more businesses to work together, sharing fraud indicators and best practices on how to tackle fraudsters. The more these organisations work together, the more they can understand how criminals work, build better anti-fraud systems and stop them targeting innocent victims.
Appointing a fraud minister won’t make the issue disappear overnight. But it would signal greater intent to tackle a crime that continues to have a devastating impact on so many consumers. Fraudsters are unlikely to stop trying to profit from victims’ misery. But making tackling fraud a national priority would show voters that the next government is serious about keeping them safe. Whoever is in power on 5 July, the next administration should take heed.
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