Home Office Overlooks Scale Of Online Fraud Warns NAO

The National Audit Office (NAO) has said that the police and Home Office are not doing enough to tackle the scourge of online fraud.

The NAO is the independent watchdog responsible for monitoring government departments, and it found that fraud (most of which is conducted online), is now the most commonly experienced crime in England and Wales.

In truth online fraud has been a persistent problem for a number of years now. Last year FraudAction at RSA warned that conducting online fraud is nowadays just too easy thanks to the availability of criminal tools and fraud services on the dark web.

Worrying Stats

According to the NAO, for too long now the Government, Home Office, and the police have regarded online fraud as a low value but high volume crime.

“It is now the most commonly experienced crime in England and Wales and demands an urgent response,” said the NAO.

It said that while the Home Office is not solely responsible for reducing and preventing online fraud, the Department is the only body that can oversee the system and lead change. The NAO did welcome the move by the Home Office, when it launched the Joint Fraud Taskforce in February 2016.

The watchdog said this 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,” said the NAO.

The NAO in its report presented some sobering facts about online fraud. In the year ending 30 September 2016, it said there had been 1.9 million cyber-related fraud incidents (or 16 percent of all crime incidents), which is hardly surprising considering that 82 percent of UK adults use the Internet daily.

At least six percent of these adults were a victim of fraud in that year, with 39 percent of them losing money (at least £250).

But only 1 in 150 police officers are assigned to ‘economic crime’, and there is £130 million currently sitting in banks that cannot accurately be traced back or returned to fraud victims.

Bank Action

“Online criminals can target thousands of victims at the same time from anywhere in the world and so are hard to trace and prosecute,” said the NAO. “The true cost of online fraud is unknown, but is likely to be billions of pounds. One estimate was that individuals lost around £10 billion and the private sector around £144 billion to fraud in 2016.”

The NAO also warned that while there was no official data to show trends in the growth of online fraud, other data indicates it is a growing crime.

“Criminals using stolen card details to make fraudulent transactions, including over the internet, is known as ‘card not present’ fraud,” it said.

“Known cases of this type of fraud increased by 103 percent between 2011 and 2016, from 709,000 to approximately 1.4 million incidents,” it added. “If the current rate of growth continues, the volume of these frauds could reach 2.9 million by 2021.”

The NAO also said the response to fraud was uneven in the banking sector, and banks have a vital role to play in reducing fraud.

Overlooked Crime

The NAO did say that the Home Office creation of the Joint Fraud Taskforce was a positive step, but the taskforce “has too narrow a focus on banking.”

“At present, only banks represent industry on the Taskforce,” it said. “However, many other organisations, including those in the retail, telecommunications and digital sectors, have responsibilities for preventing and reducing online fraud.”

“For too long, as a low-value but high-volume crime, online fraud has been overlooked by government, law enforcement and industry,” it said. “It is a crime that can affect everyone. Fraud is now the most commonly experienced crime in England and Wales, is growing rapidly and demands an urgent response. Yet fraud is not a strategic priority for local police forces, and the response from industry is uneven.”

Last November Tesco Bank was forced to halt online transactions, after cash was looted from 40,000 Tesco bank accounts.

And earlier this week the police arrested four police in the UK after they teamed up with Microsoft to help track down criminals involved in tech support scams.

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