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The UK Fraud Strategy – a whole system response

Insurance Fraud picture.PNGWhen the Government published its first Economic Crime Plan in 2019, its focus was skewed towards measures to combat money laundering. In my view, measures aimed at fighting fraud played a mere supporting role. While the insurance sector has invested heavily in combatting fraud in recent years, historically, the Government response has not matched the scale and complexity of the crime.  

Some three years on, I’m encouraged that work is now ratcheting up on fraud - with the Government developing a 10-year fraud strategy. This acknowledges that fraud is now the single biggest crime type in England and Wales. One in three adults were victims of fraud in 2021, with the scale of fraud predicted to increase by up to 60% by 2025.

I recently attended a City of London Police (CoLP) Economic Crime briefing.  Counter fraud was described as the “new rock and roll”.  Whilst this may be wishful thinking, I’ve never known a time when there has been so much Government focus on economic crime and fraud. As well as the development of a new Economic Crime Plan and the UK Fraud Strategy, there are numerous other initiatives underway, including: the Online Safety Bill; Reviews of both The Fraud Act and Digital Fraud and Offences under the Computer Misuse Act; and The Economic Crime and Corporate Transparency Bill. Earlier this week, the Justice Committee published a Report calling upon Government to revolutionise the way in which we fight fraud.

The Home Office has previously struggled to obtain funding to fight fraud, so it’s reassuring that it has now secured £100m from the Spending Review. This provides a solid foundation on which to build. But the Home Office must keep banging the drum.  

Fraud is not treated as an investigative priority by the police. Despite accounting for 40% of recorded crime, only 2% of police funding and only 380 officers out of the Government’s target of 20,000 new police officers will be dedicated to tackling fraud.

I agree with the Justice Committee that we also need a criminal justice system that has the resources and focus to adapt to new technologies and emerging trends. The Sentencing Guidelines should also give more consideration to the harms caused by fraud alongside the financial losses incurred.      

So where is this all leading? Hopefully, working in counter fraud might become a less lonely place than it often seems. The Government and public sector will play a more prominent partnership role.  It’s incumbent upon the insurance sector to seize the moment and capitalise on the current Government focus on fraud.

ABI is playing its part. We are currently working with the Home Office to develop an Insurance Sector Fraud Charter – a series of insurance and public sector commitments to make the UK even more resilient to insurance fraud. For example, we hope the Government will heed our ask for public-private data sharing of confirmed frauds. We have a well-developed data sharing strategy within the insurance sector itself. We know that fraudsters are highly mobile, so it makes sense to share data between the insurance, banking and relevant government departments such as DWP and HMRC.  

The Charter does also mean the insurance sector has to look to do more – including in new untapped areas. We are, for example, looking to prioritise supporting victims of fraud. The new Security Minister, Tom Tugendhat, has recently stressed that he wants the victim to be put at the centre of the response to fraud. By focusing on today’s victim, we will help to protect tomorrow’s potential victims. This is a topic that we’ll be exploring in our fraud conference next March.

The Government is looking to tackle fraud through a partnership approach which harnesses the capabilities, resources and experience of the public and private sectors to restore public faith.      

Insurance Fraud is a complex issue that also requires a multi-faceted whole system approach. If we are to continue to make inroads in extinguishing this nefarious threat, it’s vital that insurers continue to support the cross-industry collaborative ventures such as the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department. Collaboration and cooperation to fight fraud and financial crime is very much an expectation of the FCA. Any sector that fails to heed that message is opening itself up to close regulatory scrutiny. Equally important, it is only through collaboration that we will continue to beat the fraudster.

Last updated 26/10/2022