Fraud

Fraud is a serious crime which shames our financial system” – Theresa May

The above quote has been repeated in numerous news stories in relation to the latest crackdown on financial fraud, which costs the UK in the region of £30 billion a year.

The joint fraud taskforce 

On 10 February, four of our biggest high street banks (HSBC, The Royal Bank of Scotland, Lloyds Banking Group and Barclays) joined forces with the Home Office, police, the National Crime Agency, Financial Fraud Action UK, Cifas, the Bank of England and other lenders to create the newest taskforce fighting financial fraud following the rapid growth in fraud levels driven by cyber scams.

Losses from online banking fraud rose by 48% from 2013 to 2014 with an average amount taken per incident in the region of £35,000. The largest amount of money that a fraudster has successfully received in the UK at any one time is £18.5m from a member of staff at a global producer of healthcare products. 

The taskforce’s task list

The taskforce will create a new era of collaboration in order to fulfil their aims, namely to:

  • Compile a list of the top 10 financial fraudsters and organised fraud gangs which will be publicly displayed;
  • Speed up intelligence sharing between banks and law enforcement;
  • Train bank staff to identify victims;
  • Spot intelligence gaps; and
  • Remove the weak links in systems.

CEO and terrorist fraud

In the past year there has been a surge in what is known as ‘CEO fraud’. This begins with an email from a fraudster posing as a senior member of staff asking an employee to ‘quickly’ transfer money. The email will set out where to send the money and the reason why. The employee often complies with what they think is an urgent request from their boss. Money is transferred to the fraudsters account and quickly forwarded on and the account closed. This is what happened in the above mentioned £18.5m scam.

‘Masterminds’ behind financial fraud often coordinate scams from outside the UK using technology that is difficult for the UK to investigate. Fraud is frequently carried out by sophisticated organised criminal gangs but the Home Office also reports it being used by individuals travelling to join Daesh in Syria, using fraud on vulnerable people to fund their travel.

Banks’ success

The taskforce has been introduced following bank investment in sophisticated security systems to help combat the problem of fraud. Tackling fraudsters is an on-going battle as, whilst new technology helps the banks to fight fraud, criminals are quick to come up with new ways to use that technology against us to commit cyber-crimes.

Notwithstanding new technology available to fraudsters, the banks are doing all that they can to challenge financial fraud, track financial funds and identify suspicious financial flows to stop scammers from targeting individuals and businesses. In the first half of 2015, the banks successfully detected and prevented over £900m worth of financial fraud from taking place and the new Taskforce will hopefully add to their arsenal.

Don’t fall prey!

For more information, email blogs@gateleyplc.com.


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.