Fraud in the UK is not the catastrophe you think it is

40% of crime in the UK is fraud and it attracts 1% of policing resource.

This is the first part of a Keynote speech given to the SOCEX Economic Crime Conference in November 2024. I have split the speech into four posts to highlight the main points. These are:

We must change the defeatist ‘catastrophe’ narrative, the fraud crisis is a solvable problem (this post below)

Describing a crime type as fraud/economic crime is alost cause, it excludes 99% of the potential resources available to solve it.

Financial Investigators deployed locally have solved multiple crime problems in the past we should build on this success

We should enhance the profession of Accredited Financial Investigator.

“Thanks for the opportunity to speak at this conference.

The 40% statistic above is taken from the government Economic Crime Plan. I don’t dispute that it’s true, but it is a catastrophe statistic and, if we are to address fraud, we need to stop using it.

We all use statistics to understand a situation, so we can describe it better, but we use catastrophe statistics to bring public attention to an important problem. We use them to try and get help. But, once we have attracted attention, up close, these statistics work against us. These statistics are not our friends, we should take them to a dark place, bury them, never refer to them again.

This particular statistic suggests that there is a relationship between the 40% and the 1%. The statistic begs a question ‘how do we get to 40% of police resource’ to match the problem? Now in real life if we went from just 1% to 2% of police resources that would involve doubling every police economic crime unit in the country. Which is Mission Impossible. Furthermore, even if we achieved Mission Impossible we would still be at 2% which is obviously useless when we need to be at 40%. We need to junk this statistic, it is meaningless. Worse, it hints that we should simply give up. We will never multiply our resources by 40 times, so why bother trying?

The statistic is based on the idea that fraud is a specific type of crime and a specific type of policing, fraud policing, is needed to address it. But what if that is just wrong? Back in the 1990s Fraud Squads were a backwater of policing, indeed criminal justice. Fraud investigation and prosecution did not really deliver what we wanted of them.

Fraud investigation (and prosecution) was very time-consuming and perceived as victimless. Court sentences were light, and there was no Proceeds of Crime Act, so offenders kept the money and victims were not compensated. Most of these things are still true, except for POCA.  

After POCA was enabled, fraud squads were the first detectives to be deployed as financial investigators. Quite suddenly fraudsters found that their assets were frozen and confiscated and their financial affairs were found to be much more susceptible to financial investigation than the narrow field of vision of the fraud investigator. It is no surprise that fraudsters commit multiple offences, fail to pay taxes and stray into other crimes, but financial investigation proved it and that changed everything. All crimes with money as a motive took quite a kicking in the years after POCA, but fraud got kicked first.

Financial investigators are entirely different from fraud investigators. Fraud investigators just deal with a single crime type. They are limited in their scope, their ability and their efficacy. It’s not their fault it’s how they are programmed to function.

We need to change our story. To tackle fraud, we need to go back to basics. We discovered in the 1990s that fraud investigation did not really work. In the 2000s we discovered that financial investigation did. What we need is more financial investigators.

The ‘catastrophe statistic’ spoils our narrative. We need to say something else and we should look to other professions facing catastrophe to see what they say.

In the campaign to save the NHS, people say we need more doctors. Everyone understands what a doctor does. And having more of them is GOOD THING. The only problem is how will we pay for them? That is a problem, without an obvious solution.

In the crime reduction world, we need more Financial Investigators. Now, at the moment no-one knows what a Financial Investigator is, but we could tell them:

A Financial Investigator takes money from fraudsters and gives it to their victims.

Financial Investigators take money from all predatory criminals to support public services in deprived areas.

Financial Investigators improve the morale of people working in justice because it shows crime doesn’t pay.

Financial Investigators tackle all crime where money is the motive. there are multiple other benefits too (see other articles on this site).

The problem is who is going to pay for them? Well they pay for themselves.

They are not a problem, they are a solution.

So how many financial investigators do we need? To build a meaningful statistic we need to know how many we have. Uniquely, in the UK, this a knowable fact, because although they work in all our agencies, they are all Accredited by the National Crime Agency. How many frauds are subject to successful financial investigation? This is another knowable fact. Successful financial investigations are all recorded in one database also held by the NCA, each entry specifies the crime type. So, we could move from a meaningless, ‘catastrophe statistic’ to a problem - and a solution - we understand.

We really don’t know if 40% of crime needs 40% of policing resources. Some crime types need more resources than others. But with fraud and other economic crimes we really do know that financial investigators are the key resource. It’s far more likely that the 40% of crime that is fraud can be reduced by financial investigation than by reintroducing the failed fraud investigation model of the 1990s.

So, let’s go back to the 2000s when fraud was not 40% of crime.”

Let’s use a solution that is tried and tested instead of wringing our hands and catastrophising about it.