One conference, two keynotes: A review of Fraud Conference 2022

21 April 2022

After the success of 2021’s virtual conference, this year saw the debut of our very first hybrid Fraud Conference, in partnership with Fraud Advisory Panel and INSOL Europe.

This year’s conference brought together more than 20 world-class speakers, offering attendees insights into fraud topics including global economic crime, company fraud, putting victims first, and more.

Below is an overview of the sessions from our two keynote speakers; Dame Vera Baird DBE QC, who talked about victims of fraud, and Dame Margaret Hodge, whose session covered business fraud…

Putting Victims First

In this session, Dame Vera Baird DBE QC, Victims’ Commissioner for England and Wales, outlined findings from an analysis of fraud victimisation, in which the Victims’ Commissioner’s office mapped out the entire fraud victim landscape to better understand what characterises fraud victims and their support needs.

Victims are divided into three broad categories: ‘high-vulnerability victims’ (representing 22% of all fraud victims), ‘medium-vulnerability victims’ (23%), and ‘low-vulnerability victims’ (55%).

The research is a road map which will help to define clear strategies for dealing more effectively with fraud victims and shape the best means of protection and support for each kind of victim in future.

Potential reforms

The findings are starting point for understanding the scope of everyone’s needs, not just the needs of a minority, and from the research Dame Vera identified four key areas for improvement:

1.       Victim reporting

Only around 15% of victims of fraud report the incident to the police or Action Fraud. The reporting process needs to be made clearer to victims and we must work to destigmatise the experience of falling victim to fraud.

2.       Support service

It is not necessarily the nature of the crime that makes the impact, but the nature of the victim. Support for victims across England and Wales must be consistent, reliable and suitably tailored to the individual.

3.       Accountability

Banks should be legally required to reimburse money for APP scams and should report on the amount of money returned to victims. The Government needs to ensure it places the responsibility of fraud prevention on the shoulders of the banks and technology companies, and not onto consumers or victims.

4.       Resources

Of the 15% of victims who report fraud to the police or Action Fraud, there is only a 1 in 30 chance of the case being investigated, and only a 1 in 200 chance of the case resulting in prosecution. As Britain’s biggest crime accounting for 39% of all crime, Dame Vera concludes that the criminal justice system needs to allocate more resources to investigating cases of fraud.

Businesses Behaving Badly

In our second keynote session, Dame Margaret Hodge, Chair of the APPG on Anti-Corruption and Responsible Tax examined whether big businesses are doing enough to prevent fraud, money laundering and tax evasion, warning that the UK will fail to grow a strong and healthy economy if we "depend on dirty money" and outlined four key pillars for improving economic crime:

1.       Transparency

The UK has a “veneer” of being a trusted jurisdiction but the level of trust in the UK is decreasing. Dame Margaret suggested loopholes in the current legislation are apparent and highlighted the lack of transparency in the information available on Companies House, specifically on things like trusts.

2.       Better regulation

We have long called for Companies House reform and in her session, Dame Margaret suggested that the costs for setting up a company on Companies House should be increased from £12 to £50, and that this amount could then be made available for it to ensure that companies have a unique identifier.

Company formation agencies also need reform, she said, and suggested that only agencies in the UK should be able to form UK companies.

3.       More robust enforcement

According to Tax Watch, 43% of the £30 billion “tax gap” is due to fraudulent activity and deliberate non-compliance, yet the police only spend 2% of their budgets on trying to detect fraud and since 2015, the number of people prosecuted for tax fraud has decreased by 35%.

To tackle this issue, Dame Margaret suggested enforcement of fraud should be self-funded, and money from fines should be reinvested into enforcement agencies. The private sector should also be brought in to try to improve the effectiveness of the enforcement agencies, she said.

4.       Accountability

HMRC does not have a proper list of company formation agencies, although they are supposed to be the agency accountable for regulating this. Dame Margaret would like to see the creation of a cross-party group that can then call for the relevant HMRC reports on issues relating to large corporations.

The Government’s response

Having pushed through the Economic Crime (Transparency and Enforcement) Act 2022 in March, which set up a register of overseas entities and made provisions about sanctions, the Government has said that it will be bringing forward a second Economic Crime Bill later this year to further tackle fraud. We were pleased to hear that the Government intends for this legislation to include reforms to Companies House.

We will be watching closely to see how this issue evolves in the short and long term, and as usual, will engage with the Government wherever possible to ensure that the voice of the profession is heard at every opportunity.