Progress combatting fraud – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Committee of Public Accounts

Related inquiry: Progress combatting fraud

Date Published: 31 March 2023

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Fraud against businesses and individuals is a significant and growing problem. Since we last looked at this issue in 2017, fraud appears to have been everyone’s problem but no-one’s priority. Combatting fraud is ultimately the responsibility of the Home Office. Fraud now accounts for 41% of all crimes committed in England and Wales, with 3.8 million incidents of actual or attempted fraud in the year to June 2022. We are deeply disappointed in the slow progress made by government in the last five years. Many of the same issues remain and there is still no sign that government has a grip on fraud or an adequate strategy to address it. Meanwhile, victims of fraud are left to pay the price. The Home Office’s most recent estimate of the cost of fraud to individuals is £4.7 billion, and it still cannot quantify the potential cost of fraud to businesses. Becoming a victim of fraud can be deeply distressing for many people and in some cases can cause lasting psychological damage. We are concerned that victims feel lost in the system, with poor communication leading to missed opportunities to prevent further harm and potentially undermining public trust in law enforcement.

Law enforcement is not set up to tackle the challenges presented by fraud. The volume and complexity of fraud currently overwhelms the capacity of both Action Fraud and local police forces, who lack the training and resources they need to pursue the hundreds of thousands of cases reported every year. We are also concerned that police morale is being undermined by the time it takes to investigate and prosecute fraud and the relatively short sentences handed out when prosecutions are successful.

The Home Office is not doing enough to influence those who are instrumental in combatting fraud. The Department is dependent on the banking, technology, telecoms and retail sectors to fight fraud, but its approach will continue to be sluggish and outmanoeuvred if it relies on purely voluntary charters with these sectors. The majority of frauds are also suspected to have an international element, but relationships with overseas criminal justice agencies are immature and threatened by the UK’s lack of domestic capacity.

We are disappointed given the pervasive and damaging effects of fraud on business, individuals, and society that the Government is still not able to fully grasp its extent let alone reduce its prevalence or harms. We will therefore continue to monitor both good and poor practice across government in this area.