A House of Lords committee has warned that a 'permissive culture' towards fraud must be stopped, urging more joined-up action to prevent scams. The Fraud Act 2006 and Digital Fraud Committee recommended a new corporate criminal offence of 'failure to prevent fraud' to incentivise all industries to combat scams.
The committee criticised the telecoms sector for failing to tackle scam messages and spoof calls, and called on the tech sector to curb fraudulent advertising on social media and online platforms. It stressed that the Online Safety Bill must be strengthened to hold platforms accountable for fraudulent ads.
Financial services have been 'bounced into action' due to reimbursement costs, but the committee argued that all stakeholders in the fraud chain, including payee banks, must share responsibility for prevention and victim compensation. It suggested delaying payments in certain circumstances to allow banks more time to review risks.
The committee also highlighted that law enforcement agencies are 'chronically underfunded' for fighting fraud, and Action Fraud remains ineffective. It called for a Cabinet sub-committee to lead a centrally-coordinated public awareness campaign, modelled on public health campaigns, to tackle the issue.
Fraud accounts for approximately 41% of all crime against individuals in England and Wales, the report noted. The committee warned that organised criminals view the UK as a lucrative market due to limited prosecution risks, with proceeds funding human trafficking and drug trade.
