Civil Fraud Quarterly Round-Up: Q1 2021
The Public Accounts Committee published its report on the growing threat of online fraud, after considering evidence from organisations such as Age UK, Lloyds Banking Group, and the British Retail Consortium. It made for depressing reading with the cost of the crime for individuals estimated at £10 billion, and around 2 million cyber-related fraud incidents last year alone. That number is thought to be growing rapidly.
Banks were criticised by the Committee for failing to take adequate responsibility for dealing with the issue of fraud and a lack of transparency. Age UK suggested publishing a league table ranking banks according to how successful they have been in preventing fraud, so that customers can make informed decisions about who to trust with their money. Perhaps unsurprisingly the representative for Lloyds Group was not too keen on this idea. He cited the reason as the potential risk of fraudsters targeting individual banks, if they were made aware of perceived weaknesses in security. However, the Committee was unconvinced by this argument, suggesting that it might be in the banks’ own interest not to be transparent and publish individual data, as it could deter customers from using banks at the bottom of the table. It was recommended that banks be required to publish performance data by Spring 2018.
Despite the rise in fraud, only 27 out of 41 Police and Crime Commissioners referred to online fraud in their police and crime plans. Age UK told the Committee that the police response to online fraud was extremely patchy and elderly people can suffer real harm and in the worst cases, end up in care homes because they have been victims.
Notwithstanding this, many victims are unaware of the wide ranging civil remedies available to recover money from fraudsters. This can include taking decisive action by obtaining interim remedies such as disclosure orders, search orders and freezing injunctions. However in most cases it is critical for a victim to act as quickly as possible and obtain legal advice without delay, otherwise, the prospect of obtaining a remedy can be prejudiced.
Although there are increasingly a greater variety of funding options available for pursuing fraud claims, civil proceedings can be expensive and the cost of using the courts to locate, and recover assets can be disproportionate in instances of comparatively low value fraud. A pilot scheme set up by the City of London police last year, sought to make it easier for victims to make greater use of civil remedies to freeze and recover assets. It will be interesting to see the results of this pilot and whether this system could be used to give victims an effective method to recover their money.
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