The UK government has published a new fraud strategy setting out its plan to stop fraud at source and pursue those responsible. It aims to reduce fraud by 10% by 2025. To do this the strategy identifies three key pillars, outlined further below.

Pillar 1: Pursue fraudsters

The government is investing £100m ($125m) to improve the law enforcement, intelligence community and criminal justice system response to fraud.

National Fraud Squad

A National Fraud Squad is to be created, with the aim of bringing counter fraud expertise together. Over 400 new specialist investigators will investigate and disrupt fraudsters drawn from the National Crime Agency, City of London Police and other police services. The Economic Crime and Corporate Transparency Bill will also provide law enforcement with additional powers to seize and recover criminal crypto assets. There will be a key focus on technology and intelligence-led disruption of fraud.

Replace Action Fraud

A new national fraud and cyber-crime reporting service will replace Action Fraud. A sum of £30m ($37m) has been pledged to replace and improve the service following a review of Action Fraud which identified shortcomings with the service.

Improve criminal justice response

A new independent review will consider, among other things, modernising the disclosure regime, and whether fraud offences and the Fraud Act 2006 meet the challenges of modern fraud, including whether the available penalties are appropriate. It will also examine the possibility of streamlining the existing disclosure regime where there are large volumes of digital material to reduce the burden on prosecutors. The strategy also notes the introduction of the new corporate criminal offence of failure to prevent fraud.

Pillar 2: Block fraud

In response to a “barrage of scams”, the strategy aims to tackle fraud at source.

Industry action

A new Anti-Fraud Champion position will be created. Anthony Browne MP will take on this role and will seek to “drive delivery and increase industry collaboration”. Fraud data will be published to help inform consumers.

Further, the Joint Fraud Taskforce will “measure the impact of industry in preventing fraud and set new voluntary targets for companies to reduce fraud”. Existing Fraud Sector Charters are to be implemented by the end of 2023, with new charters with the insurance and other sectors being agreed by early 2024.

Regulate to prevent criminals abusing technology

The Online Safety Bill will ensure tech companies actively try to reduce online fraud, or face significant fines if they do not. SIM farms will be banned to tackle scam texts and calls; a consultation has been launched to identify the best way to do this with the intention to legislate. By working with Ofcom, the strategy also aims to disrupt telephone-enabled scams by stopping spoofed calls. The Online Advertising Programme will be delivered to “ensure that UK-facing online advertising is safe from fraud and other harms”.

Financial firms will better protect their customers

The Government recognises that although customers and businesses have enjoyed benefits from making payments quickly, this has also facilitated fraud. Payment service providers will therefore be provided with additional time for potentially fraudulent payments to be investigated under a new risk-based approach. The FCA will continue to undertake assessments of financial firms’ fraud systems and controls.

Secure people online at scale

The National Cyber Security Centre’s new national “Share and Defend” hub will be introduced to reduce the number of scams reaching the public. The Government is also consulting on creating new powers for law enforcement agencies to seize control and take down criminal, fraudulent websites.

Pillar 3: Empower people

This pillar aims to provide people with the tools and knowledge to keep themselves safe and ensure they can recover their funds. This includes plans to; 

• “overhaul” anti-fraud communications in order to “streamline and amplify” them across the public and private sectors;
• “bolster victim support” with the expansion of the National Economic Crime Victim Care Unit and National Trading Standards’ Multi-Agency Approach to Fraud; and
• “protect identities from fraud”, including by establishing a digital identity market and revamping the powers of Companies House.

Authorised Push Payment (APP) Fraud

One further key aim of Pillar 3 is legislation to enable the Payment Systems Regulator (PSR) to require reimbursement of APP fraud losses by all PSR regulated payment service providers (PSPs). The foreword to the new fraud strategy states that the Government “will soon have the powers to make sure that payment service providers are treating customers fairly”. This references a key part of Pillar 3 which states that the Government wants to “make sure more victims of authorised fraud get their money back”. It recognises that “the nature of fraud is changing”, as fraud shifts from unauthorised to authorised payment fraud.

The PSR has consulted with the financial industry and interested stakeholders over the shape these reforms will take when the Financial Services and Markets Bill becomes law. The Pillar 2 plan to help banks slow down suspicious payments is also part of the package which will affect this area.

PSPs should expect updated, specific proposals from the PSR for reimbursing authorised fraud victims shortly.

International reach

The strategy also enables the government to enhance its key international and domestic capabilities including:

• Hosting a global fraud summit in the UK to “drive global action on fraud”;
• Working bilaterally with key countries of risk to  “strengthen their efforts to tackle fraud”, with additional law enforcement presence in those countries;
• “Maximising data sharing mechanisms”, including supporting the Public Sector Fraud Authority, which leads public sector collaboration on fraud; and
• Publishing a new action plan relating to the considerable problem of money mules, used by fraudsters to steal money from fraud victims. This action plan will focus on closing off “recruitment routes”, deterring the practice and providing “safeguarding for identified money mules”.

What comes next

The strategy will be delivered over a three year programme which will be led and governed by the Home Office.

In anticipation of the strategy’s implementation, companies will need to review their current fraud strategy and be prepared to engage with the Joint Fraud Taskforce in respect of any voluntary targets set. They should also consider the impact of the implementation of the Existing Fraud Sector Charters which currently commit the retail banking, telecommunication and accountancy industries to strengthen their fraud defences.

The consultation into the prevention of the use of SIM farms for fraud is open now and will end on June 14, 2023. The government is keen to hear from those who may be affected by proposals to ban SIM farms. Any responses must be sent by 17:00 on June 14, 2023 via email to: SIMfarmConsultation@homeoffice.gov.uk

There are no other open consultations at the time of writing but PSPs will in particular have a keen eye on a number of the Government’s plans.

Any immediate concerns or comments on the issues raised by the UK Fraud Strategy may be directed to the newly appointed Anti-Fraud Champion, Anthony Browne MP.