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One-year funding is holding back fight against fraud says HMIC

Forces need more resources to tackle fraud and victims are still getting a poor service as a result, HM inspectorate has warned.

HM Inspectorate’s repeat inspection found fraud continues to be treated as a low-priority or victimless crime by forces despite demands for change from the watchdog and victims of crime.

Although improvements have been made, the big problems remain unchanged it said. 

City of London Police’s role as the national lead force for fraud is clearer than it was in 2019, and there is now a three-year national policing strategy for tackling fraud.

But outdated IT systems, the inability to secure funding beyond a single year and confusion over how to respond to offences are enabling an increasing number of offences. the HMIC said.

According to the ONS, there were 4.6 million fraud offences in the year ending March 2021, a 24% increase compared with the year ending March 2019.

During lockdown, there was an increase in consumer, retail fraud and advance fee fraud as offenders took advantage of increased online shopping and increased savings.

Advance fee fraud offences included scams where victims transferred funds to fraudsters for postal deliveries.

There was also a fresh warning on the lack of capability at national level to analyse data. 

The computer system currently used by the National Fraud Intelligence Bureau (NFIB) to collect and analyse intelligence is “not fit for purpose” the HMIC said. Rather than fix the current system, the plan is to replace it with a new one – but this won’t happen until 2024.

Some improvements have been made, such as the way fraud-related organised crime groups (OCGs) are identified and mapped. Awareness campaigns have also prevented more people from being drawn into fraud or committing further offences.

The National Fraud Intelligence Bureau’s enforcement documentation shared with investigating officers are now easier to understand.

There is still a lack of knowledge about ancillary orders among staff according to HMIC.

The orders support the management of serious offenders. These orders are imposed by the courts, following conviction, to prevent and deter further crime by restricting movement, limiting activities, and recovering or freezing assets.

One force has created a Lifetime Offender Management Unit and has led to an increase in the use of orders. But most other fraud teams are unaware of this option.

Communication with victims also remains a problem: some investigators are still struggling to communicate with multiple victims in fraud cases, and that they can’t comply with the Code.

Some said that their force’s crime management systems don’t allow for multiple victims and it is time-consuming to provide such updates to each victim separately.

Funding formula

But HMI’s biggest concern is the “fundamental problem” of a disparity between the amount of work fraud creates for forces and the resources allocated to it.

The warning that a multi-year funding settlement is needed came just a day after it was revealed Chief Constables have urged the Home Office to agree pay deals that last longer than one year.

HMI said: “The fact that funding is only confirmed a year at a time, and with relatively short notice, makes it difficult to plan and invest for the long term. The amount of intelligence, investigation and prevention work that fraud requires is not matched by the resources allocated to it.”

Although not named, the College of Policing and top performing fraud teams were urged to create a formal place where detectives can access best practice.

HMI said: “In the absence of a national structure, there is a growing network of local and regional groups where best practice is discussed. But, in the main, these groups tend to operate in isolation.

“The Knowledge Hub is a potential forum for publishing best practice. We found that, in respect of fraud, it lacks information, is under-utilised and there is no guidance available for its use.”

The report makes three recommendations:

The follow up report is based on interviews with police officers and staff from 11 forces including City of London. Also reviewed were nine Regional Organised Crime Units, Action Fraud, the NFIB, the College of Policing, the National Crime Agency (NCA), the National Economic Crime Centre (NECC), and the National Police Chiefs’ Council (NPCC) Co-ordinator for Economic Crime.

HM Inspector Matt Parr said: “Too few fraudsters are held to account. More than two years after our last fraud inspection, I am disappointed that not enough has changed.

“The scale of fraud has not diminished – in fact it has increased during the pandemic – and it needs to become more of a priority for police forces," he said.

"The police and other agencies should come together to prevent and protect the public from fraud, more officers should be working on it, and there should be more investigations into it. All this would lead to more victims receiving the service and the justice they are entitled to.”

Responding to the report, Angela McLaren, Assistant Commissioner, City of London Police and policing co-ordinator for economic crime, said: “We welcome this report, which builds on and recognises the work undertaken by policing as a result of the 2018 report, at a time where many chief constables have had to make difficult choices with limited resources."

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