PF Fraud Report Complete_PF Fraud Report Complete.qxd 07/04/2019 19:00 Page 1 MORE THAN JUST A NUMBER: IMPROVING THE POLICE RESPONSE TO VICTIMS OF FRAUD DECEMBER 2018 PF Fraud Report Complete_PF Fraud Report Complete.qxd 07/04/2019 19:00 Page 2 MORE THAN JUST A NUMBER: IMPROVING THE POLICE RESPONSE TO VICTIMS OF FRAUD MICHAEL SKIDMORE, JOSEPHINE RAMM, JANICE GOLDSTRAW-WHITE, CLARE BARRETT, SABINA BARLEAZA, RICK MUIR AND MARTIN GILL DECEMBER 2018 ISBN: 0-947692-69-X Acknowledgements This study would not have been possible without the generous support of the Dawes Trust, to whom we are extremely grateful. The views expressed in this report are solely those of the authors. We would particularly like to thank PCC Sue Mountstevens and Chief Constable Andy Marsh in Avon and Somerset, PCC Matthew Scott and Chief Constable Alan Pughsley in Kent, PCC Roger Hirst and Chief Constable Stephen Kavanagh in Essex and Commissioner Ian Dyson at the City Of London Police for allowing us to conduct research in their respective forces. Without their full commitment, this study would not have been possible. We would also like to extend our gratitude to the many practitioners that gave up their valuable time to give us the benefit of their knowledge and experience. The analysts, who patiently worked with researchers to produce valuable datasets, are particularly appreciated, these include the National Fraud Intelligence Bureau, Cifas and Victim Support. The team would also like to express their gratitude to all those who attended meetings of the National Advisory Board, whose feedback and insight has been invaluable. About the authors and organisations This project was conducted by Michael Skidmore, Josephine Ramm, Dr Janice Goldstraw-White, Clare Barrett and Sabina Barleaza under the direction of Dr Rick Muir (The Police Foundation) and Professor Martin Gill (Perpetuity Research). The Police Foundation The Police Foundation is the only independent think tank focused exclusively on improving policing and developing knowledge and understanding of policing and crime reduction. Its mission is to generate evidence and develop ideas which deliver better policing and a safer society. It does this by producing trusted, impartial research and by working with the police and their partners to create change. Perpetuity Research Perpetuity Research is a company that undertakes research in areas of policing and crime, including organised crime. Previous work includes research on money laundering, fraud and corruption, retail theft, identity theft and the illicit market. Perpetuity Research aims to bridge the gap between theory and practice and has produced a range of high profile studies as well as toolkits. PF Fraud Report Complete_PF Fraud Report Complete.qxd 07/04/2019 19:00 Page 3 CONTENTS Executive Summary 3 4. The experience of fraud victims 42 Introduction 3 4.1 Victims’ expectations of the system 42 The fraud challenge 3 4.2 Reporting fraud 42 Enforcement 4 4.3 Victim’s services 45 The experience of fraud victims 5 4.4 Support for vulnerable victims 50 Preventing fraud 6 4.5 Summary 54 Building a better system for tackling fraud 7 5. Preventing fraud 55 1. Introduction 10 5.1 What is crime prevention and what role 55 1.1 Background 10 can it play in preventing fraud? 1.2 The aims of this study 10 5.2 National fraud prevention activity 56 5.3 Local preventative activity 59 1.3 Methodology 10 5.4 Summary 65 1.3 Report Structure 12 6. Building a better system 66 2. The fraud challenge 13 for tackling fraud 2.1 What is fraud? 13 6.1 Should we prioritise fraud? 66 2.2 How the response to fraud has 14 6.2 Governance and strategy 67 evolved over time 6.3 Structure 70 2.3 The scale and nature of fraud 15 6.4 Workforce 72 2.4 The relationship between 19 6.5 Summary 78 cybercrime and fraud Conclusion 81 2.5 Fraud as a cross border crime 23 2.6 Victimisation 25 References 83 2.7 Harm 25 2.8 Summary 28 Appendices 89 Appendix A: Methodology 89 3. Enforcement 29 Appendix B: Fraud categorisation 93 3.1 The effectiveness of police enforcement 29 Appendix C: Data tables 94 3.2 Police force effectiveness compared 30 3.3 Differences in outcome by fraud type 33 3.4 The challenges of fraud enforcement 34 3.5 Local operating models 39 3.6 Summary 41 More than just a number: Improving the police response to victims of fraud 1 PF Fraud Report Complete_PF Fraud Report Complete.qxd 07/04/2019 19:00 Page 4 2 More than just a number: Improving the police response to victims of fraud PF Fraud Report Complete_PF Fraud Report Complete.qxd 07/04/2019 19:00 Page 5 EXECUTIVE SUMMARY INTRODUCTION areas – Avon and Somerset, Kent and Essex. Work included interviews with local practitioners, analysis of Fraud is estimated to make up 31 per cent of all crime local data sets and a survey of the local police in England and Wales, with 3.24 million fraud offences workforce. The research also included interviews with estimated to have taken place in the twelve months to regional and national stakeholders, a survey of fraud March 2018. Research has found that 45 per cent of leads across police forces across England and Wales fraud victims felt that the financial loss they experienced and analysis of national fraud data sets. had an impact on their emo tional wellbeing and 37 per cent reported a significant psychological or emotional impact. THE FRAUD CHALLENGE Before looking at the police response to fraud in greater Despite the scale and impact of the problem, it is widely depth we describe the nature and complexity of modern agreed among policymakers, academics and law fraud. The growth of the internet and its reach into all enforcement officials that fraud and the harms it causes aspects of life has meant that fraud has moved from are not prioritised by the police. This study is intended as being a corporate ‘white collar’ crime dealt with by a response to this imbalance between the scale and specialist law enforcement units to a volume crime impact of fraud and the response it receives from affecting millions of individual victims, many of whom policing. Its aim is to achieve a better understanding of expect a local policing response similar to that taken in the police response to fraud, to consider how response to other types of crime. appropriate this is and to suggest how policy and practice could be improved. However, despite the vast scale of fraud affecting England and Wales, the policing and criminal justice To achieve this aim, the research set out to answer the response remains limited by comparison. In 2017-18 following questions: while 277,561 frauds were reported to the police, only • How is the police response to fraud organised 8,313 cases that year resulted in a charge/summons, across national, regional and local agencies? caution, or community resolution, representing just three per cent of police recorded fraud. • How do police forces and partner agencies priori tise fraud? The rise of volume fraud is linked to the spread of the internet and digital technology. 54 per cent of frauds Who is affected by fraud and what support is • reported in the Crime Survey for England and Wales available to them? have a link to cybercrime. We found that 69 per cent of • How do the various organisations and agencies fraud cases passed on to police forces for investigation work together to respond to fraud and what roles in 2016-17 had at least one indicator of cybercrime and and powers do they have to achieve this? 43 per cent involved first contact with the victim being made online. • What impact has the internet had on the nature and volume of fraud? Related to this strong link to cybercrime, most fraud is committed across local police force borders. We found What is being done to protect victims and identify • that 78 per cent of frauds passed on for investigation in vulnerability in local areas? 2016-17 involved a victim and a suspect located in • What determines whether the response to fraud is different police force areas. effective or not and what are the barriers to this? Fraud victims look different from the victims of other • Are there examples of emerging good practice types of crime, although patterns of victimisation vary by which, if replicated, would improve the overall type of fraud. Overall, fraud victims are more likely to be effectiveness of the response to fraud? middle aged, earn more than £50,000 a year, live in a rural or an affluent area and work in a professional or In order to gain a full understanding of the subject, the managerial occupation. research looked at the fraud response from both a local and national perspective. The majority of the locally There is a common misconception that fraud is a based research was conducted in three police force ‘victimless’ crime. However, fraud can have a significant More than just a number: Improving the police response to victims of fraud 3 PF Fraud Report Complete_PF Fraud Report Complete.qxd 07/04/2019 19:00 Page 6 emotional and psychological impact on a victim. We way, according to a template developed by the found that 35 per cent of victims of frauds, whose cases National Fraud Intelligence Bureau. were passed on for investigation by a police force in 2016-17 reported that the crime had a severe or The complexity of fraud significant impact upon them. The high rate of attrition and the length of time it takes to investigate fraud are due in part to the complexity of ENFORCEMENT fraud investigations.