Fraud can’t be stamped out if no one takes it seriously

Underfunded staff, over-stretched agencies and police focusing on high-stakes cases. No wonder criminals are able to get away with scamming so many people, writes Chris Blackhurst

Prosecution rates are extremely low – it’s no surprise banks are having to shell out billions (iStock)

At this week’s annual Cambridgefraud conference there was a record turnout.

Some 2,000 delegates from around the world attended the seven-day gathering devoted to discussing new twists and glitches in financial crookery. Now in its 39th year, the International Symposium on Economic Crime, to use its proper title, has become a fixture in the calendar for senior investigators, police officers and law enforcers.

I first started years ago, when it was just 30 or so people in a room over the old Jesus College Bar. Now, it’s housed, still in Jesus, but across marquees, halls and lecture theatres. Where once those attending could all stay in rooms at Jesus, the organisers have to book accommodation in neighbouring colleges.

In all, this year, there were 15 main sessions and 64 workshops. Rather eerily, when news broke of the Queen’s passing, speakers were addressing the question of “What have we achieved in promoting integrity during the 70 years of HM Queen Elizabeth’s reign?” (It was scheduled to mark her Platinum Jubilee).

On a more practical level, experts covered topics such as crypto, terrorist financing, money laundering, whistleblowing, seizure of assets and human trafficking.

Yet, despite the enthusiasm, there was an underlying nag, that society, the rest of society, at least the British side, does not take economic crime anywhere seriously enough. I went to one seminar where the speaker aired his frustration that fraud while accounts for £200bn a year in the UK, and it amounts to 59 per cent of serious crime, only 1 per cent of police resources are committed to tackling financial theft. Just as depressing, and shocking, was the statistic that just 2.6 per cent of calls to the national Action Fraud hotline are reviewed by a police officer.

Folks are being scammed and little is being done to catch the perpetrators. Fortunately, the banks currently pay up in around 90 per cent of cases, so few people are left out of pocket. That, though, makes me suspect that because they are reimbursed, the police and their bosses in the Home Office are not so bothered − they got the money back, no one was hurt, there’s nothing to investigate, move on.

The banks of course should be concerned, but there’s also the thought they could also be doing more to combat fraud, and that would command resources. This route – the straight, few questions asked, one of providing compensation – is quicker and cleaner.

That all means the clear winner is the fraudster. No wonder the crime is so prevalent. And it is a crime – a wrong is being committed – but little is being done to right it, no one is being caught and punished.

These, too, are the low-level thefts – not so low-level when you tot up the amounts involved. There are also the high-end frauds, those entailing the taking of many millions. Here again, the picture is not much different.

There’s the Serious Fraud Office (SFO), but it’s forever having to justify its presence and is underfunded and lacking in staff. The SFO is inevitably drawn into protracted scraps with corporations and their executives who employ the City’s finest, most expensive lawyers. Neither do they possess all the tools required. In the US, the white-collar crime-busters make great inroads, thanks to their ability to submit evidence collected in such a way that would render it forbidden in the UK, and the use of plea bargaining.

The UK police are over-stretched, dealing with rising street crime, thuggery, domestic assaults, drugs, gang-on-gang violence. There is little mileage, not much kudos, for them in spending months, years, poring over computers, studying financial transactions. The politicians, their masters, want hits and they want them immediately.

That’s if the police are even qualified. They’re not educated in finance, not familiar with the systems and terminology. Often, they do not know what they’re looking for. It’s not their fault: this is a highly specialist area.

In short, fraud is not sexy, it doesn’t entail car chases, firing tasers, battering down doors – the scenes from police reality shows that fill our TV screens. Again, the political chiefs do not help – when it comes to picture opportunities they’re quick to join an early-morning raid, not so willing to sit at a screen. They crave being seen as determinedly all-action, and staring at a collection of numbers does not cut it.

What’s to be done? We urgently require a specialised, entirely focused, properly financed and equipped, national fraud agency. There should be no ifs and buts about it, no quibbles about the slowness of its inquiries and the amount of funding it will absorb. Its staff should have the power to seize material, to strike first and ask questions later. The new agency should have the ability to prosecute, to seek prison terms.

Perhaps then, in years to come, the Cambridge gathering will be discussing British successes in defeating economic crime. I can but hope.

Chris Blackhurst is the author of ‘Too Big To Jail – Inside HSBC, the Mexican drug cartels and the greatest banking scandal of the century’, published by Macmillan