Fraud in Britain has risen to a level where it poses a “national security threat”, according to the banking industry, with £754m stolen from bank customers during the first half of this year, a 30% rise on the same period in 2020.
UK MPs are calling on the Government to legislate on mandatory reimbursement by banks to victims of authorised push payment fraud and new rules to bring the technology industry exert control over social media scams. A new report by the parliamentary Treasury Select Committee is calling on the Government to “push harder and act faster on the growing fraud epidemic”.
The Royal United Services Institute (RUSI) has now reported that fraud should now be seen as a national security issue and is costing £190b a year. UK Finance said fraudsters had capitalised on the coronavirus pandemic, with criminals targeting children as young as 14 via social media to become money mules. Britain’s intelligence agencies and the police should play a greater role in responding, according to the RUSI Report, which says that the amount of fraud against the private sector has had a negative impact on the UK as a place to do business.
The Crime Survey for England and Wales found 3.7 million reported incidents in 2019-20 of members of the public being targeted by credit card, identity and online fraud.
The private sector takes the biggest financial losses. One estimate from 2017 put the cost of fraud to businesses at £140bn. However, the losses go beyond the financial, the Survey authors say. “Fraud has the potential to disrupt society in multiple ways, by psychologically impacting individuals, undermining the viability of businesses, putting pressure on public services, fuelling organised crime and funding terrorism.” The report cites evidence that terrorist groups and lone actors turn to fraud in order to finance their activities. In one case, eight supporters of the Islamic State group were convicted of defrauding UK pensioners out of more than £1m, which was alleged to be used in part to fund travel from the UK to Syria.
The digitisation of everyday life has been accelerated by Coronavirus has increased the risks, with organised crime groups showing increased sophistication in their tactics. “The UK has become a target destination for global fraudsters,” the RUSI argues. But the extent to which international criminals focus on the UK is hard to gauge, because intelligence agencies have not traditionally focused on the issue.
Classifying fraud as a national security issue would help ensure the right level of resourcing and prioritisation, the authors argue.
RUSI recommend more focused intelligence direction from the National Security Council, including greater tasking for GCHQ as well as the National Crime Agency to understand the issue. They call for better information-sharing and use of data analytics, as well as more money and attention from police forces to address what they call a “responsibility vacuum”.
The RUSI report makes a number of recommendations for policymakers to consider. At its core, it advocates that the National Security Council commissions a whole-of-system public-private fraud strategy, including a local networked criminal justice response, pathways for cross-government collaboration, and a clearer role for the financial, e-commerce and telco sectors.
Source: Cyber Security Intelligence