Here’s how the government can tackle the UK’s fraud problem

If a new crime were to emerge overnight that indiscriminately targeted millions of people in their homes every year, leading to real physical and mental harms – and, in some cases, even death – we’d all expect a sizeable and commensurate government and policing response.

The crime I describe, however, is not new and has been with us for some time: fraud. The recently released Crime Survey for England and Wales estimated that there were 3.7 million incidents of fraud in the year running to September 2022, making this the crime British adults are more likely to fall victim to than any other.

Yet despite innumerable cases being highlighted on a daily basis of innocent individuals falling victim to increasingly sophisticated fraud and scams – in many cases leading to financial ruin and sometimes even suicide – successive governments have let this threat spiral out of control, allowing the UK to emerge as the fraud capital of the world, costing the UK economy an estimated £137bn per year.

It is a problem that continues to grow unchecked: fraud reports collected by the City of London Police (the UK’s fraud policing lead) increased by 22 per cent in the year to September 2022. During the Covid pandemic, fraud surged a further 24 per cent.

Despite this growing scale, fraud remains the “Cinderella service” in policing, with a chronically underfunded response leading to an inadequate service for victims. Shockingly, only 1 per cent of policing resources are currently allocated to tackling fraud, despite it representing 41 per cent of all crime.

The reasons for this are complex. Predominantly, though, they lie in the fact that fraud does not, to use policing parlance, “bang, bleed or shout” – it does not have a physical manifestation like burglary or street-level violence. Despite widespread dissatisfaction in the police service, response to fraud and multiple parliamentary and policing inspectorate reviews, the prioritisation of this issue remains stubbornly suboptimal.

However, recently some green shoots have emerged. After years of campaigning by victim’s groups, the financial industry and think tanks like RUSI, the home secretary included fraud as a priority threat within the Strategic Policing Requirement. Though largely presentational, fraud is now positioned as a serious and organised crime threat signalling a welcome change in “tone from the top” about how the UK government views this crime.

While welcome, this presentational pivot is clearly not enough to turn the tide on this growing crime. What needs to happen now is to put in place a serious and credible plan to operationalise this new policy. Though some of this shift must come from within policing itself, it would be unfair to lay the blame for lack of progress on this issue at the door of a police service still reeling from a decade of significant budget cuts.

To deal with a problem as entrenched and endemic as fraud requires vision and leadership at a political level; and for this vision to be backed by significant investment. The forthcoming launch of the government’s new National Fraud Strategy, due out later this month, which will set out the government’s policy agenda to tackle fraud, offers the perfect vehicle to deliver this bold new vision for fraud policing.

In RUSI’s December 2022 report on economic crime policing reform, we offered the government a clear, realistic and costed vision of fraud policing for the future, noting that if we are recognising fraud as an organised crime threat, then we need to police it like one. This means establishing a single, national command structure with clear access to the same specialist policing capabilities – like cyber and surveillance functions – as other organised crime threats. It also means properly funding the response via a single, ring-fenced budget of at least £250m per year.

With confidence in policing at an all-time low, it is time for a bold response. If the fraud strategy fails to deliver the visionary reform to a crime to which all of us are at some point likely to fall victim, this will have not only societal but also political implications. Whether the government recognises it or not, fraud is no longer simply a policing issue – its increasing scale and impact has made it a political one. And it is one on which voters may call out the government at the ballot box.

Helena Wood is a senior research fellow and co-head of the UK Economic Crime Programme at RUSI's Centre for Financial Crime and Security Studies