For the first time, the results of the latest British Crime Survey issued by the Office for National Statistics highlight the fact that fraud and cyber crime are the most prevalent forms of criminality perpetrated against individuals and businesses across England and Wales.
The introduction of questions around fraud and cyber crime show the changing face of criminality, with offences enabled by use of the Internet changing the nature of offending in the UK. Criminals and organised crime groups no longer have to commit crime in person and often use the anonymity of the Internet to commit crime.
The importance of these statistics – which cover the 12-month period ending in June this year – is underlined as crime in this area is hugely under-reported. This is evidenced by the vast difference between the number of incidents reported to Action Fraud (406,935 in 2014) and the millions evidenced in the British Crime Survey.
Victims are frequently defrauded and then reimbursed by financial institutions with neither party reporting the matter to Action Fraud or the police service. This hampers law enforcement’s ability to investigate, prosecute or prevent further crimes being committed against victims and prioritise it against other crime types.
The overriding feeling is that greater reporting in this area would enable the police to close down the websites, phone lines and bank accounts that enable criminals to operate.
National Fraud Intelligence Bureau
Part of the City of London Police, the National Fraud Intelligence Bureau helps to disrupt 4,000 websites, bank accounts and phone lines every month, leading to the prevention of £369 million worth of fraud last year alone. However, with the cost of fraud to the UK economy estimated at £30 billion, more needs to be done and more resources are required to assist law enforcement to assist the victims of crime and prevent further victimisation.
With half of all fraud and cyber crime committed against UK victims by criminals overseas, investigation in this area is both costly and labour intensive. The police service cannot solve this problem alone. The UK’s response needs to be a co-ordinated one and absolutely include the business community.
Understanding the nature and scale of the problem enables the police service and Government to better resource and prioritise the UK’s response in this area. Work is already ongoing with the UK Home Office on plans for a new Fraud Task Force. This will bring together key organisations that will play a part in the UK’s response.
Adrian Leppard, Commissioner of the City of London Police, said: “Fraud and cyber crime affect every community in the country. These forms of criminality don’t discriminate by social status or geographical location. Every chief constable and Police and Crime Commissioner is beginning to realise the scale of the problem underlined by these latest figures. I’m sure that fraud and cyber crime will now feature as a priority in every local policing plan.”
Leppard continued: “These forms of criminality brings new challenges for policing in terms of prosecuting offenders and protecting victims. Not withstanding the cuts to police budgets, we must find ways of responding to the needs of the victims of fraud.”
Leppard went on to comment: “Alongside the policing response, the UK needs to begin a ‘prevention revolution’ that will educate the public on how to stop hackers and fraudsters from taking our money. It’s vital that we work closely with industry to help protect society. A large proportion of cyber attacks can be prevented simply by changing our behaviour online and taking simple steps to make sure that computers are secure.”
Fraud and cyber crime: what’s being done?
Adrian Leppard – who retires in December after 32 years of service to policing – has also issued a statement around what’s being done by the authorities to combat fraud and cyber crime. Here it is in full:
“‘Traditional crime is falling’. While that statement may be true, it doesn’t tell the whole story. Modern crime investigation and prevention techniques, as well as simple economics, have resulted in sharp reductions in many acquisitive crime types over the period of my service. We now have a new challenge in offences involving the Internet which are changing the face of crime in the UK. Harassment, child sexual exploitation, terrorism and fraud are all increasingly being committed by suspects with a varying degree of computing expertise. This is before we’ve even considered the brand new type of cyber-dependant crimes such as hacking, Denial of Service-style attacks and the threat of virus proliferation.
“The latest Crime Survey for England and Wales has highlighted this area for the first time and estimates that the level of crime in the UK is far higher than previously stated. That’s because it has started to recognise and ask questions about fraud and cyber crime. This is a welcome – if overdue – development and gives us a much clearer picture of the true levels of crime in the UK.
“As I reach the end of my policing career, I leave a service which is well versed in the prevention of the more visible crimes, but which needs to continue to evolve to meet the threat posed by cyber crime and most notably online fraud. Frauds have been reported to Action Fraud since 2012. All cases are assessed by the National Fraud Intelligence Bureau within the City of London Police to identify patterns and networks.
“We receive around 250,000 reports of crime every year, but we think that the true level is at least 12 times that. Although we would like to disseminate more information, we know that the 70,000 cases we do send to forces to resolve are difficult enough for them to deal with. As a result, detecting our way out of the problem is simply impossible. Prevention must be at the core of everything we do as a service.
“The National Fraud Intelligence Bureau has identified a growing trend for fraudsters and cyber criminals to be based overseas. There’s evidence to show they are using increasingly complex money laundering methods to disperse funds belonging to a victim in just minutes. That’s precisely why my force, which leads on economic crime, is working with the banking sector, the National Crime Agency and the UK Home Office to develop a joint Task Force looking at how crime may be prevented and illicit payments stopped. We already share information on money laundering cases with the banks in order to prevent crime and to identify potential criminal networks, and we’re keen to do more with our partners in Europe as well.
“However, the prevention of these crimes cannot simply rest with Government, banks and other bodies which make up ‘the centre’. The efforts of officers and staff who deal with businesses and members of the public are crucial to the fight. We believe that the vast majority of fraud and cyber crimes are preventable if people have the right information to hand. Every officer in this country can give useful advice to members of their community on how to prevent a burglary. Can the same be said with regards to more modern offending?
“To aid in this, we’ve developed a prevention hub which shares information with forces so they can understand the issues and pass information to the people they serve.
“How many of the elderly in each force area know that a fraudster can ‘spoof’ a number so that it appears they are calling from the victim’s bank? How many small business managers know that their phone systems can be hacked into and premium rate calls made overseas (or that this is easy to prevent?) And how many people can spot the clues which could point to their PC being infected by a banking Trojan virus?
“Although many of these issues are new to some, none of them are particularly complicated. I believe that all parts of the UK public sector and all members of the British policing family have a role to play in keeping our public safe.”
High figures for cyber crime “just the tip of the iceberg” states KPMG
Speaking about the new ONS figures, Louise Pordage – senior manager in KPMG’s Cyber Security practice – stated: “While the figures may appear high, I’m certain that cyber crime remains one of the most under-reported areas in our crime statistics. There’s little clarity around the impact of cyber crime against the UK economy, and of course the statistics only consider crimes against the person rather than corporate crime.”
Pordage added: “Having a better view of cyber crime matters to individuals, corporations and the Government. It also drives home the point that we all need to consider our security online and take sensible precautions to protect ourselves.”
Continuing this theme, Pordage stressed: “Our world is becoming digital and so is organised crime. The incorporation of these figures into the Crime Survey of England and Wales is a vital first step towards a more robust reporting regime for cyber crime, not to mention an important recognition that such crimes can have every bit as much of an impact on our lives as more conventional forms of criminality.”
Comment from Cifas, the NPCC and the ABI
The latest Crime Survey shows that, from July 2014-June 2015, there were 599,689 fraud offences. Cifas data has contributed to these latest statistics, with Cifas members reporting 266, 701 of these confirmed fraud offences against organisations from the year July 2014-June 2015.
Commenting on the statistics, Cifas CEO Simon Dukes said: “Fraud is an insidious crime. Thousands of people fall victim to fraud every day in the UK, and fraudsters use the money they steal to fund further crime. Businesses have been reporting fraud cases to law enforcement through Cifas and sharing fraud data for many years. Publishing this data in crime statistics is a great step forward.”
Dukes went on to comment: “There’s much more to do. Industry and Government must keep working together to report more fraud and support victims to come forward so that we can understand the true scale of this problem and work together to tackle it.”
This quarter’s crime statistics show 5.1 million incidents of fraud with 3.8 million adult victims and 2.5 million incidents of crime falling under the Computer Misuse Act.
The National Police Chiefs’ Council’s Lead for Crime Recording and Statistics, Chief Constable Jeff Farrar, said: “It’s encouraging to see that the Crime Survey of England and Wales continues to show decreasing incidents of crime. The 8% drop in the last quarter is the biggest since the survey began in 1981. At the same time, police recorded crime has risen by 5%. This directly reflects the efforts being made by forces to improve consistency in crime recording.”
Farrar also said: “There’s still a gap in terms of what the public is experiencing and what’s being reported to the police. However, it’s extremely encouraging that the gap between the Crime Survey of England and Wales public survey and the recording of crime by the police continues to narrow.”
Focusing on the detail around fraud and cyber crime, Farrar explained: “The ONS field trial between May and August on experiences of fraud and cyber crime demonstrates how the use of new technology and the Internet is changing the nature of crime in the UK. The police service is working with members of the public and the private sector to come up with solutions to tackle this threat, but it certainly presents a growing challenge. Cyber crime exemplifies how the demands on the police service are both changing and increasing at a time when budgets continue to be placed under significant pressure.”
Matt Cullen, head of strategy at the Association of British Insurers, said: “Cyber crime is increasingly putting businesses at risk and causing financial hardship for families. For some businesses, hackers are now the biggest crime threat they face. Cyber insurance is growing because it’s a complete package, helping firms thwart the criminals and providing the finance and technical support necessary to recover from any hack or data loss.”