Today saw the announcement by Theresa May, the Home Secretary, and Mark Carney, Governor of the Bank of England, of a new Joint Fraud Taskforce. The Taskforce has gathered organisations hailing from the public, private, and non-profit sector in the interests of fighting fraud more effectively.

In her speech, May condemned fraud as a crime that ‘undermines the credibility of the economy, ruins businesses and causes untold distress to people of all walks of life’. Such distress has been growing in recent years. In the year ending September 2015, official figures recorded a 5% increase in reported frauds, with a total of around five million cases recorded that year (with many more cases supposedly going unreported). The overall cost to the economy from fraud has been estimated at a staggering £24bn each year.

The cost of fraud has grown due to the advent of technology that poses new security risks for business and individuals alike. For example, online banking and shopping have been as much a gift to tech-savvy fraudsters as to consumers. Official figures record that cheque, card, and online banking fraud rose by 8% in the year ending September 2015 with a total 339,529 cases recorded. Even sophisticated private entities are vulnerable to new methods of fraud. In one egregious incident of ‘CEO fraud’, fraudsters posing as senior employees persuaded the finance department of a company to part with £18.5m.

The threat posed by new types of fraud, particularly cyberfraud, spurred the foundation of the Taskforce. Its members include public bodies such as the National Crime Agency (NCA), City of London Police, and the Bank of England. Its private members include representatives of major banks including HSBC, RBS, Lloyds, and Barclays. Non-profit members include Cifas and Financial Action Fraud UK.

The overall purpose of the Taskforce is to enable its members to pool resources and exchange information more efficiently. Among other measures, the Taskforce intends to achieve this by:

  • Organising training programmes for bank staff to identify victims or potential victims of fraud;
  • Identifying weaknesses in computer systems otherwise capable of being exploited by fraudsters;
  • Improving the sharing of intelligence between banks and police; and
  • Addressing the difficulties faced by victims of fraud in obtaining refunds.

In addition to launching new initiatives, members of the Taskforce will build on existing ones such as the Dedicated Card and Payment Crimes Unit, which has facilitated collaboration between police and banks in the fight against card fraud.

Tackling fraud has been at the top of the Government’s agenda for many years; legislation has been introduced to assist in combatting fraud.  Strict obligations have been imposed on banks in relation to know your client information and reporting requirements if money laundering is suspected.  The police have investigative tools under Part V of the Proceeds of Crime Act 2002 which allow them to obtain information about individuals’ finances not only in confiscation proceedings but also in civil recovery investigations where criminality could not be proven in the Courts.

The foundation of the Taskforce suggests that the Government perceives fraud to be a growing problem that demands a more vigorous response, a response which existing bodies have failed to provide. This is certainly the perception of Ms May who commented that “[f]or too long, there has been too little understanding of [fraud] and too great a reluctance to take steps to tackle it.’ There are twenty-four billion reasons why Ms May is correct, and why the Taskforce must adopt smarter and more dynamic tactics of fighting fraud or use the powers available to them in a more focussed way.