10 Feb 2016 01:30pm

Theresa May launches fraud taskforce

Theresa May today launched a new joint fraud taskforce which will include banks, regulators and the police

Banks will work alongside the police and government bodies as part of the new taskforce to combat financial fraud which is estimated to cost the UK at least £24bn a year.

The taskforce aims to strengthen connections between government officials, law enforcement agencies and the financial sector, creating a new era of collaboration resulting in fast-track intelligence sharing between the groups and a unified response to the fight against fraud.

“It is only by systematically sharing information and data between banks and law enforcement investigators that we will be able to identify suspicious financial flows, track fraudulent funds through the system, and prove fraudsters are profiting from such illegal activity to support convictions,” Theresa May said in a speech launching the taskforce today.

The joint fraud taskforce will include Financial Fraud Action UK, the Financial Conduct Authority, the City of London Police, Metropolitan Police Services, the National Police Chiefs Council, National Crime Agency, Bank of England, fraud prevention agency Cifas and the UK's major banks and payment providers.

Financial Fraud Action UK worked closely with the Home Office to establish the taskforce.

In her speech, the Home Secretary warned that the scale and volume of financial activity “brings serious risks of economic crime and real opportunities for criminals to defraud hardworking taxpayers of their savings and earnings.”

She added that fraud “shames our financial system”.

“It undermines the credibility of the economy, ruins businesses and causes untold distress to people of all walks of life,” she continued.

“Some of you will know first-hand the financial and emotional impact of being defrauded, and the industry leaders in the room will know the true financial cost of fraud to their businesses, from reimbursing consumers to repairing your reputations with affected clients.

“For too long, there has been too little understanding of the problem and too great a reluctance to take steps to tackle it,” May said.

The Office of National Statistics estimated that there were 5.1 million frauds in the UK last year. May warned that the City of London’s size and openness to global trade makes it particularly exposed to the risk of international money laundering and the frauds that are inevitably linked to it.

“It is clear that fraud is often coordinated by organised criminal gangs, increasingly using online channels to dupe unwitting individuals and access their accounts,” she said.

“There is growing evidence they do so from jurisdictions out of reach of traditional policing, using technology that make them difficult to investigate,” May continued.

She also warned that new technology is facilitating new ways to commit cyber crime.

According to May, the joint fraud taskforce represents a united front of government, law enforcement and industry in preventing, identifying and cracking down on fraud.

May highlighted the need to build a better understanding of the threat with taskforce members concentrating on identifying and mapping key threats, vulnerabilities and drivers of fraud.

The group aims to tackle the intelligence gaps and weak links in systems and processes that fraudsters depend on to successfully target the public and businesses.

One of the taskforce’s first jobs will be to publish a list of the 10 most wanted suspected fraudsters and organised fraud gangs in the UK.

There will be a national roll-out of training for bank staff to help identify victims and potential victims.

The taskforce will address the barriers victims face in getting refunds and raise awareness about how victims fall prey to fraud and the steps people can take to prevent themselves.

May added that she will do everything to ensure the joint fraud taskforce is a success and urged others to lend their expertise to this new body.

Mark Carney, governor of the Bank of England, Tracey McDermott, acting chief executive of the Financial Conduct Authority, and Harriett Baldwin, economic secretary to the Treasury were all in attendance at the launch, along with senior figures from world-leading banks, law enforcement and government.

The taskforce members signed a declaration of their commitment to tackling fraud and reducing its devastating impact.

Director of Financial Fraud Action UK, Katy Worobec, said following the launch, “Fraud can have a devastating impact on its victims and banks are committed to eradicating this crime and stopping the scammers who target individuals and businesses. The joint fraud taskforce will build on the good work already in place, allowing banks, police and government to operate together even more effectively.

Ashok Vaswani, chief executive of Barclays personal & corporate banking, commented, “Fraud leaves a devastating impact on people and businesses, which is why the UK’s banks are determined to stop these scammers and eradicate this crime." 

Fraud was included in the official crime survey of England and Wales for the first time in the 2015.

The survey showed that an estimated 3.8 million adults in England and Wales were victims of some form of online fraud.

Recent figures from the City of London Police’s national fraud intelligence bureau also revealed an increase in CEO fraud.

According to the report, over £32m was lost as a result of employees transferring funds following instructions from a “bogus boss” email and 994 reports of CEO fraud were made to Action Fraud between July 2015 and January 2016.

The largest reported amount of money given by a member of staff to a fraudster was £18.5m at a global producer of healthcare products - but the average amount is more in the region of £35,000.

Steve Proffitt, of Action Fraud, warned businesses to be on high alert.

"Employees should be encouraged to double check everything they do and never be rushed into transferring large amounts of money even if they do think that it's an important task given to them by their CEO," he said.

This new taskforce will build on ongoing work across the financial sector and law enforcement to protect consumers, such as the dedicated card and payments crime unit, where police work alongside industry fraud investigators to disrupt fraudsters and secure convictions.

Commissioner of the City of London Police, Ian Dyson QPM said "the key to combating fraud is government, law enforcement and business working together to not only bring criminals to justice but also design out the opportunities for them to commit crime in the first place.

“The Fraud Taskforce is key to this and brings a new impetus to the ongoing work we already do to protect victims and pursue criminals.

“Together we can make the UK a safer place and reduce the estimated £30 billion cost of fraud to the UK economy.” 

Lord Mayor Jeffrey Mountevans added, “that there remains a significant gap in tackling volume fraud crime."

“We stand with the Government and welcome the commitment of the banks and wider businesses to the taskforce. Their expertise and approach is critical. Business plans require the identification, measurement and mitigation of risk and the City’s pre-eminent business cluster can help tackle this particular global threat,” Mountevans said.

Sinead Moore


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