Britain is a “haven” for fraudsters as less than 1% of reported cases result in charges, a damning report into the Government’s handling of the growing problem has said.
MPs on the Public Accounts Committee criticised the “slow progress” on tackling the estimated 3.8 million incidents of fraud and attempted frauds.
They said they were “deeply disappointed” with the progress being made by the Government as fraud accounts for 41% of all crimes committed in England and Wales.
The criminal justice system’s current approach to penalising and sentencing fraudsters is insufficient to prevent the UK being seen as a haven for fraudsters— Public Accounts Committee report
“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,” their report published on Friday said.
Estimates put the cost to individuals at £4.7 billion, while it cannot quantify the potential price to businesses, and it is the victims who are “left to pay the price”.
The Home Office’s approach was criticised as “sluggish” as the UK’s “immature” overseas criminal justice agencies fail to tackle international elements.
Deterrence is also being failed because less than 1% of around 900,000 frauds reported in England and Wales each year results in an offender being charged or prosecuted, the report said.
The committee accused the Action Fraud hotline of failing victims and said it has earned the nickname “Inaction Fraud”.
Given the pervasive and damaging effects of fraud on business, individuals and society, it is extremely poor performance that Government still isn’t even able to fully grasp the extent let alone reduce the prevalence or harms— Public Accounts Committee chair Dame Meg Hillier
Police morale was being dented by investigations often lasting longer than the sentences being handed to criminals, it said.
“We are worried that for many people, reporting a fraud may be their only contact with the police, and negative experiences of reporting fraud risks undermining public trust in the police more generally,” the MPs said.
“The criminal justice system’s current approach to penalising and sentencing fraudsters is insufficient to prevent the UK being seen as a haven for fraudsters.”
Dame Meg Hillier, the Labour chair of the cross-party committee, said there is “just no sign that Government has a grip on fraud”.
“Given the pervasive and damaging effects of fraud on business, individuals and society, it is extremely poor performance that Government still isn’t even able to fully grasp the extent let alone reduce the prevalence or harms,” she said.
“Opportunities to prevent further harm are being missed and public trust in law enforcement is undermined.”
We cannot let working people and pensioners continue being robbed of their hard-earned wages and savings by these gangs of parasites, while the Government sits on its hands and pretends there is no problem— Emily Thornberry, shadow attorney general
The Home Office responded: “This Government is absolutely committed to cracking down on fraud and we will shortly publish our fraud strategy which will establish a co-ordinated response from Government, law enforcement and the private sector to better protect the public and increase the disruption and prosecution of fraudsters.
“We have also committed £400 million over the next three years to bolster law enforcement’s response to fraud and economic crime.”
On Thursday, the Home Office announced its three-year plan to crack down on money laundering and economic crime but Labour urged Prime Minister Rishi Sunak to bring forward his fraud strategy.
Shadow attorney general Emily Thornberry said: “It has been five months since Rishi Sunak stood in the House of Commons and promised that he would ‘shortly’ publish a new fraud strategy, with ‘a more unified and co-ordinated response across government and law enforcement’.
“Not only has that strategy failed to materialise, but as this report shows, the Government’s failings on fraud are now more stark than ever.
“We cannot let working people and pensioners continue being robbed of their hard-earned wages and savings by these gangs of parasites, while the Government sits on its hands and pretends there is no problem.”
