Online Fraud

Fraud is the most commonly experienced crime in England and Wales and most happens online. While the landscape for tackling online fraud is complex, the Home Office’s response is not proportionate to the threat, according to the National Audit Office.

The City of London Police is the national lead force for online fraud and runs Action Fraud, the national centre for reporting fraud. Police and Crime Commissioners and chief constables are however responsible for policing in their local areas. Today’s report found, however, that although the face of crime is changing, forces take different approaches to tackling online fraud and for some it is not a priority.

According to the NAO, the Joint Fraud Taskforce, led by Home Office Ministers, is a positive step. The Department, through the Taskforce, is seeking to raise awareness of online fraud, reduce card not present fraud and to return money to fraud victims. Today’s report found however that the Department faces a challenge in influencing other partners such as banks and law enforcement bodies to take on responsibility for preventing and reducing fraud.

In addition, without accurate data, the Department does not know whether its response is sufficient or adequate. Not only is online fraud under-reported, but where data is available, there is a lack of sharing of information between government, industry and law enforcement agencies. There is, for example, no formal requirement for banks to report fraud or share reports with government.

Measuring the impact of campaigns and the contribution government makes to improving online behaviours is challenging. The Department is evaluating the Take Five campaign, one of many campaigns run by the government and other bodies to educate people, but this will not be completed until March 2018. The growing scale of online fraud suggests that many people are still not aware of the risks and that there is much to do to change behaviour. In addition, different organisations running campaigns, with slightly different messages, can confuse the public and reduce the campaigns’ impact.

While educating consumers is sensible, government and industry still have a responsibility to protect citizens and businesses. The NAO found the protection banks provide varies, with some investing more than others in educating customers and improving their anti-fraud technology. The ways banks work together in responding to scams also needs to improve.

Today’s report found there is no clear mechanism for identifying, developing and sharing good practice to prevent people becoming victims. There are examples of good practice in protecting people against online fraud, such as Sussex Police’s initiative to help bodies such as banks and charities identify potential victims.

The nature of online fraud makes it difficult to pursue and prosecute criminals. In addition, there is a lack of data on how many fraudsters are prosecuted and judicial outcomes for fraud offences; there are also concerns about the sentences fraudsters receive. Although the government wants the police and judiciary to make greater use of existing laws, the NAO found that stakeholders had mixed views on the adequacy of current legislation. The international and hidden nature of online fraud makes it difficult to pursue and prosecute criminals because of the need for international cooperation and an ability to take action across borders.

“For too long, as a low value but high volume crime, online fraud has been overlooked by government, law enforcement and industry. It is now the most commonly experienced crime in England and Wales and demands an urgent response. While the Department is not solely responsible for reducing and preventing online fraud, it is the only body that can oversee the system and lead change. The launch of the Joint Fraud Taskforce in February 2016 was a positive step, but there is still much work to be done.  At this stage it is hard to judge that the response to online fraud is proportionate, efficient or effective”

Amyas Morse, head of the National Audit Office, 30 June 2017

Notes for Editors

1.9m
Estimated 'cyber-related' fraud incidents in the year ending 30 September 2016 (16% of all estimated crime incidents)

623k

Actual fraud incidents recorded in the year ending 30 September 2016

£10bn

Estimated loss to individuals from fraud in 2016

82%
Of adults in the UK used the internet daily or almost daily in 2016

At least 6%
Of adults experienced an incident of fraud in the year to 30 September 2016

In 39%
Of incidents where money was taken or stolen from the victim, the loss was £250 or more in the year ending 30 September 2016

103%
Increase in 'card not present' fraud, including over the internet, between 2011 and 2016, to 1.4 million cases

1 in 6
Police officers' main function was neighbourhood policing in 2016

1 in 150
Police officers' main function was economic crime in 2016

£130 million
Of funds held in banks that cannot accurately be traced back and returned to fraud victims

27 out of 41 
Police and Crime Commissioners refer to online fraud in their most recent annual police and crime plans

More than 10
Different education and awareness campaigns running in March 2017 to improve citizens’ and businesses’ cyber security

  1. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  2. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £734 million in 2016.

Contact

Angharad Thomas
Direct line: 020 7798 7208 Mobile: 07985 274421 Email: pressoffice@nao.gsi.gov.uk

PN: 32/17