If politicians and policymakers have been feeling jubilant this time final yr following indications of a ten% drop within the ranges of fraud within the UK, the plateauing of fraud statistics and the early indications of elevated fraud ranges, could also be trigger for a extra
muted begin to 2025.
As Cifas’ six-month information launched final yr confirmed, whereas fraud losses within the monetary business look like holding regular, the expansion in fraud towards the broader enterprise group – significantly will increase in organised fraud towards the telecommunications
and on-line retail sectors – has risen. Coupled with this, no dialogue on fraud now takes place with out point out of the looming menace of AI and its potential to take the menace from dangerous to inconceivably worse.
All of this will likely be a trigger for concern for the UK’s first ever Fraud Minister, Lord Hanson, who will likely be trying to officers for decisive motion. They may, fortunately, be capable of level to various important initiatives underway throughout regulation,
laws and coverage on account of ship in 2025.
Ofcom’s Unlawful Harms Codes of Apply
In December 2024 we noticed the publication of the primary iteration of Ofcom’s Unlawful Harms Codes of Apply and steerage. This units out Ofcom’s expectations as to how social media and on-line search companies can display compliance with the obligations in
the On-line Security Act 2023.
From mid-March onwards the tech platforms and search companies lined by the Act must take a spread of affordable measures to deal with fraud on their platforms or face motion. It’s hoped that these measures, together with the clear political expectation
set by the Chancellor’s Mansion Home speech in November 2024, will play a big half in decreasing the function of on-line platforms within the UK’s fraud epidemic.
Knowledge Use and Entry Invoice
October 2024 noticed the introduction of the Authorities’s Knowledge Use and Entry Invoice to Parliament. An amended and reconstituted model of the earlier authorities’s Knowledge Safety and Digital Data Invoice, the laws, if handed, will create a brand new framework
for the sharing of knowledge for the prevention of crime (together with fraud) by creating new ‘recognised reputable pursuits’ for the sharing of knowledge.
Whereas present information safety regulation might be – and is being – ably navigated by the counter-fraud group to forestall fraud, this new provision ought to take away any residual obstacles to data-sharing for the prevention of fraud.
The UK’s Fraud Technique
In opposition, the Labour Social gathering dedicated to creating a brand new expanded Fraud Technique. The interior processes for drawing up the brand new technique obtained underway behind closed doorways late final yr, however will start in earnest in 2025, with a brand new Technique (or a
near-final draft) anticipated by the tip of the yr.
That is prone to be extra complete than the final, straddling fraud towards customers, the Public Sector and towards companies. It is usually prone to embrace an elevated deal with prevention and data-sharing as core options.
These measures, and the vary of different initiatives already in practice throughout the counter-fraud eco-system, might go some technique to allaying any Ministerial considerations. Nevertheless, the place may the Authorities search to go additional and sooner to drive the problem into remission
moderately than stasis?
The way to pay for an expanded response?
It’s clear that whereas fraud is a precedence for the brand new Authorities, the Spending Evaluate outcomes for all coverage areas are prone to be parsimonious. With restricted public funding and a must up the ante on fraud, the Authorities might want to establish an alternate
earnings stream.
Within the Fraud Pledges, launched shortly earlier than the 2024 election, Cifas referred to as for a brand new ‘Fraud Levy’ to fund reforms to the system. Since then, backed by each UK Finance and the Funds Affiliation, a Fraud Levy, akin to the prevailing Financial Crime Levy
on the ‘regulated sectors’ for anti-money laundering, is, we imagine, a mandatory and non permanent measure to pump-prime an ailing system.
Policing and the fraud response
The Authorities each earlier than and after its election put a robust deal with crime and policing as considered one of its core deliverables. Nevertheless, like people who got here earlier than them, policing coverage appears myopically focussed on street-level policing to the detriment of
different areas. However as journalist Danny Shaw just lately wrote, “bobbies on the beat received’t cease the cyber crime wave”.
With as much as 50% of crime now occurring on-line, it’s clear that as a part of the Authorities’s wider evaluation of UK policing, it must urgently contemplate what form the response to on-line crime will seem like sooner or later.
A world response to a world drawback
In 2024, the UK Authorities confirmed important management in driving motion on fraud beneath the UN Conference on Transnational Organised Crime. That is to be counseled as a mandatory first step. Nevertheless, it’s a place to begin and never an finish.
Regardless of the broader geo-political uncertainty of each ongoing international battle and the forthcoming Trump presidency, the non-partisan nature of fraud implies that the UK ought to search to work throughout political fault-lines to translate the intentions of 2024 into
sensible measures at a global degree.
This will likely embrace establishing formalised cross-border enforcement cooperation partnerships and technical help programmes with precedence fraud ‘supply’ international locations, through its growth help programme.
In abstract, regardless of the broader geo-political surroundings and, certainly, the looming menace of AI as an accelerant to the fraud menace, because the Fraud Minister opens his pink field and examines the statistics, he shouldn’t be overly disheartened. Whereas the journey
will likely be a protracted one, it has definitely moved on apace from the ‘misplaced decade’ of the 2010s. Nevertheless, heat phrases usually are not going to be sufficient to shift this sticky drawback – the political intent of 2024 should flip into chilly, arduous motion of 2025.
