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NAO highlights shortcomings in online fraud fight


Central government auditor says Home Office has taken positive steps but needs to do more to lead a cohesive response

The Home Office does not know whether its response to online crime is sufficient or adequate, due largely to a lack of information sharing between government, industry and law enforcement agencies, according to a new report from the National Audit Office (NAO).

Titled Online fraud, it outlines a fragmented approach towards dealing with the threat and says that so far the Home Office’s response has not been proportionate.

It asserts that, while the department has begun to see online fraud as a priority and made it an issue for the Joint Fraud Taskforce – which was formed last year – not all police forces have done so.

There are no formal legal or contractual levers, such as proper governance measures, to support the taskforce’s efforts to take responsibility for dealing with the threats. It also has too narrow a focus on banking – not paying enough attention to the retail, digital and telecommunications sectors – and the Home Office has not yet reported on its progress or established measures for its performance.

Other shortcomings are that there is no clear mechanism for identifying and sharing good practice to prevent people becoming victims, and a lack of information sharing between the institutions fighting online fraud. There are plans for a database to be set up later this year by the National Fraud Intelligence Bureau and Action Fraud – the national reporting centre for the issue – but its success will depend on whether the data provided is comprehensive, accurate and timely.

The overall picture involves a lack of clarity about responsibilities for tackling online fraud; and the report insists that the Home Office is the only body that can oversee the system and lead change.


Amyas Morse, head of the NAO, said: “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.”

While the exact cost of online fraud is unknown, there have been estimates that in 2016 it cost individuals around £10 billion and the private sector around £144 billion. The NAO also cites figures from the Office of National Statistics that there were 1.9 million incidents of cyber related fraud in England and Wales in the year up to 30 September 2016, accounting for 16% of all crime.

CIFAS approval

The report won the approval of CIFAS, the not-for-profit organisation that facilitates data sharing to reduce fraud. Its deputy chief executive Mike Haley said it would welcome the expansion of the Joint Fraud Taskforce to include other stakeholders, such as the retail and digital sectors.

“We also endorse the need for government, law enforcement and industry to work together to raise awareness of how people can better protect themselves," he said. "Specifically we want to see fraud education in the school curriculum so that young people can be made more aware of the consequences of falling victim to a fraud as well as committing fraud."

The organisation said that fraud should be a strategic priority, backed by funding, for police forces, and that there should be a comprehensive review of the sentencing guidelines for fraud.

Photo: iStockphoto/Henrik Jonsson

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