UK approach to policing fraud is appalling
Thursday, May 16, 2019 at 8:18AM
Martin Kenney in Fraud, UK

The BBC is reporting that victims of fraud are not receiving the support from law enforcement that they warrant. Some police forces are even (apparently) actively seeking reasons to drop investigations into fraud. This all comes as no surprise, as I have mentioned the sorry state of fraud investigation in the UK on several occasions.

Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services has said that an "inconsistent" approach to policing fraud has left the British public at increasing risk of falling victim to scams. When they do fall victim, a languid response from law enforcement professionals has sometimes been all that the state can muster. This is unhelpful. The state and its law enforcement professionals should do everything in their power to right wrongs and bring those responsible to justice.

The fact is that the British police are held in high esteem across the globe. Almost all of them go about their duties daily without firearms in an increasingly hostile environment. They are highly professional and tenacious when it comes to policing. But they are being let down badly by the purse holders in gray suits, who steadfastly refuse to accept that UK policing is in crisis.

Prime Minister Theresa May was responsible as the former Home Secretary for the biggest financial cuts ever inflicted on policing in the UK. Despite repeated warnings by the Police Federation (the equivalent of the policing union), she cut policing to the bone, with 22,424 officers lost from the rank and file, equating to an approximate 15 percent cut since 2010. When cuts of this magnitude are implemented, the resources left are understandably directed at the frontline, as members of the public need reassurance that when there is an emergency the police will be there, even if in smaller numbers than previously.

It is little wonder, then, that crimes considered a non-emergency, such as fraud, are being severely neglected. The BBC’s report states that some police forces are seeking reasons -- any reason -- to drop fraud investigations. This is hardly surprising. The normally dedicated officers are simply being swamped by general police duties, so something has had to give. One officer was quoted as saying: “The crime was not considered a priority because it does not bang, bleed or shout.”

The knock-on effect of this situation is that ordinary members of the public, who have or who are in danger of falling victim to fraud, wrongfully perceive that their coppers are simply uninterested, or worse bone-idle. Nothing could be further from the truth. But who can blame a victim for perceiving that their crime appears to be unimportant and their police lethargic in response?

Fraud investigations by their very nature tend to be more complex and time consuming than other crime investigations. Also, when somebody is prosecuted, the culprits receive much more lenient sentences than others. There is an argument that cash-strapped law enforcement is missing a trick, in that the Proceeds of Crime Act 2002 allows law enforcement to confiscate the crook’s ill-gotten gains and seek incentivization payments from the monies recovered. Admittedly the incentivization is limited in how it can be spent, but it would still serve to act as a welcome transfusion to a police service haemorrhaging cash.

Putting aside cash seizure/forfeiture, the civil asset recovery powers built into the Proceeds of Crime Act exist to target the upper echelon criminals. This means in the more mundane cases, in order for the police to receive their incentivization payments, they need to secure a conviction for an acquisitive crime that opens up the possibility of confiscation. Which means an investigation. Which in turn means resourcing. Which then means that all of this is a vicious circle.

The Inspectorate described its findings as making “sorry reading,” with one force admitting to filing 96 percent of fraud cases it received from the central reporting hubs without looking at them. If you’re one of the many fraud victims in this 96 percent, how did you feel about the lack of effort shown by the police? One force even admitted that it only had two dedicated fraud detectives at its disposal. This is a damning indictment of the UK government, not the forces bereft of funding who are having to make difficult choices.

Two dedicated fraud detectives in a force renders them impotent as an investigative resource, and it would be less embarrassing for the force concerned to do away with these two sorry individuals facing such an impossible task. One officer said: "If there is an excuse not to investigate it, we will use it." Another stated: "Everything is against fraud. It is not a priority, not sexy, people don't report it and it is difficult to prove, which takes time, resources and money.”

In fairness, Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services report concluded and agreed with what those of us in the counter-fraud profession, saying: “Fraud can cause 'enormous' psychological and emotional damage, highlighting that some victims have reported losing their entire life savings.”

To law enforcement officers in general, fraud investigation is not sexy. There are few instances of screaming wheels, blue lights, sirens and fist fights. It tends to be more mundane in nature. What some officers miss is that the fraudsters who make up our adversaries are clever and devious. Generally, they do not earn respect by pointing guns in people’s faces or dishing out punishment beatings. Instead, they use their cunning to target the vulnerable. In many instances they leave behind broken individuals who desperately need our support.

The UK law enforcement’s approach to investigating fraud is similarly broken. Only reinvestment in officers, training and enabling experience to be built will fix a problem that is costing the UK in the region of £110 billion ($1.43 billion) per year.

The answer to the fraud crisis -- managing it and ultimately investigating it -- is simple: reinvestment in the police and replacing the expertise lost to the cost-cutting cull.

With thanks to Tony McClements, Senior Investigator at Martin Kenney & Co, for his assistance with this post. Tony served for 33 years in three UK police forces, and has worked as a specialist Fraud and Financial Investigator since 1998. He now lectures in these subjects at the University of Central Lancashire.

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Martin Kenney, pictured above, is Managing Partner of Martin Kenney & Co., Solicitors, a specialist investigative and asset recovery practice based in the BVI, focused on multi-jurisdictional fraud and grand corruption cases www.martinkenney.com | @MKSolicitorsIn 2014 he was the recipient of the ACFE’s highest honor: the Cressey Award for life-time achievement in the detection and deterrence of fraud. He was selected as one of the Top Thought Leaders of the Legal Profession in 2018 and 2019 by Who's Who Legal International and as the number one offshore lawyer for asset recovery in 2017 and 2018.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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