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Home Office criticised for tepid response to online fraud

Sam Trendall November 16, 2022 in Business and industry, Public order, justice and rights Tagged - 4 Minutes

NAO report concludes that department has undertaken ‘limited’ action in the past five years and has ‘lacked clarity of purpose’

Credit: Gerd Altmann/Pixabay

The Home Office is not leading an effective cross-government strategy to tackle online fraud against individuals and businesses, the National Audit Office has warned.

The watchdog said the department, which is responsible for spearheading efforts to prevent and reduce fraud against the public and business, still does not understand the full scale of the issue five years after the NAO called for rapid action.

In 2017, an NAO report found fraud – the vast majority of which is now committed digitally – had been overlooked by government, with the watchdog demanding an urgent response.

In its latest report, published today, the watchdog accused the Home Office of taking “limited” action, criticising the “still significant gaps in the Home Office’s understanding of the threat from fraud” which means the department cannot be certain about the impact its policies are having.

The NAO has called on the Home Office to deliver a plan which sets out what it wants to achieve, including target dates and what it needs to overcome to reach these targets.

“Five years on from our last report on this subject, the Home Office has taken limited action to improve its response to fraud,” said Gareth Davies, head of the NAO. “Its approach has lacked clarity of purpose, it does not have the data it needs to understand the full scale of the problem, and it is not able to accurately measure the impact of its policies on this growing area of crime.”

Fraud made up 41% of reported crime in the year to June 2022, the highest of any offence, but very few cases end with a criminal charge or summons to appear in court. Four fifths of all fraud was perpetrated online or using digital technology.

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Annual figures published by the Home Office this summer demonstrated the current difficulties experienced by authorities in prosecuting cybercrime. A total of 28,886 instances of digital fraud and other breaches of the Computer Misuse Act last year.

Police investigated 4,335 of these, of which only 233 resulted in a criminal, charge, court summons, regulatory action, or out-of-court settlement.

In the majority of cases, officers failed to identify a suspect. There were also more than 1,000 instances where authorities were prevented from taking action as the victim did not support doing so.

The NAO report considers the extent to which the Home Office has adopted a whole system approach to the cross-government issue of tackling fraud, concluding that it has failed to do so. The Home Office works in partnership with other government departments, bodies such as the National Crime Agency, the private sector and international partners to tackle fraud.

But the NAO said the department has limited influence over many of the organisations required to successfully combat fraud.

“Addressing the threat of fraud depends on the Home Office building relationships with a wide range of partner bodies and influencing the behaviour of the public and businesses. Its relationships with partner bodies vary in maturity. There can also be tensions in what the Home Office is expecting partners to do, for example the steps it asks the private sector to adopt to prevent fraud can slow down the customer journey,” the report said.

As well as lacking influence, the NAO said the Home Office still does not have a complete picture of how much its partners in the public and private sector are spending on tackling fraud and how effective this outlay is.

The report did, however, welcome Home Office improvements to how it collates and monitors of fraud data, such as the creation of a Fraud Data Board which seeks to ensure it and its partners have the data they need to respond effectively to the threat of fraud.

Davies said the Home Office must now “be vigorous in leading a cross-government response that is informed by a thorough understanding of what works in combatting fraud”.

The NAO said this must include clarity about what government wants to achieve.

The Home Office is currently working on a fraud strategy, which it hopes to publish by the end of this year.

The NAO said this strategy must set out what outcomes the department wants to achieve, and by when, and include a whole system plan for achieving the aims. This must be underpinned by an understanding of the threat from fraud and resources available to tackle it, the watchdog added.

The report only looked into fraud against people and business, not government.

A government spokesperson said: “This government is absolutely committed to cracking down on fraud and economic crime, spending an additional £400 million over the next three years to tackle it. We thank the NAO for this report and recognise more can be done to understand the threat we face and how best to tackle it. We have reflected their recommendations in our upcoming Fraud Strategy, which sets out how we will work together – with industry, law enforcement, courts, and the third sector – to make sure there is no safe space for fraudsters.”

 

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Sam Trendall

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