TTF Blog: 12 January 2021

Fraud is UK's most-reported crime, why do less than 1% of police look at it?

Commander Clinton Blackburn

by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting

Fraudsters are exploiting the tools of unregulated online advertising in lockdown, prompting a call for increased powers to tackle the scourge. A City of London police commander last week explained to MPs why in his view, the police can’t simply ‘arrest ourselves out of’ the UK’s most common crime. It happens so often, and is difficult to trace: “Traditionally there has been an emphasis on reducing criminals,” said Commander Clinton Blackburn of City of London Police. “Preventing people from becoming a victim in the first place is an absolutely vital part of addressing fraud.”

822,000 reports of fraud

Commander Blackburn made the remarks at the latest hearing of the Pension Scams inquiry, a probe that Transparency Task Force campaigned for. You can see a full transcript of the session here and catch up with victims’ testimony here. Last week’s session heard from police and regulators. Blackburn set out that there were around 822,000 reports of fraud in the last financial year in the UK, including ‘nearly 19,000 investment frauds reported to Action Fraud’ in 2020: “We are talking about huge volumes here. Policing has limited resources and competing demands and, sadly, we have to make some very difficult decisions as a result. I do not believe this is an area of crime where we can arrest ourselves out of this offence type.”

Journalism effecting change

By Commander Blackburn’s account, the Times newspaper’s investigation into Action Fraud a couple of years ago, had a big impact. “We do not tolerate what played out in the newspapers in 2019. Some very swift dismissals took place following that and an improvement plan was put in place … Through the City of London police, the Police Authority Board commissioned what is known as the Mackey review and that was published in January 2019. That made 15 recommendations for areas of improvement, eight of which have now been implemented to date.”

I’ve had a little look back at the recommendations at the end of Sir Craig Mackay’s report on Action Fraud, they included that ‘regionally based teams of specialist investigators should be developed’ and that ‘competitive packages should be offered to skilled investigators from the private sector.’ It would be interesting to know more about how Action Fraud, and the framework around it, is changing.

Tip of the iceberg

Nevertheless, it is difficult to see how victims can be well-served with policing structured as it currently is. Graeme Biggar, Director General of the National Economic Crime Centre, flagged up to MPs that “criticisms get heaped on Action Fraud because that is the point where people report to, but it is only one small part of the system. Clinton mentioned the number of reports that are coming in, and now about a third of all crime is reported. Last year it became the biggest single reported crime for the first time and it has less than 1% of police dedicated to looking at it. We have this massive mismatch in the law enforcement, the policing response. Unsurprisingly, that does not lead to brilliant outcomes.”

90 ‘major investigations’

Biggar later explained that “across law enforcement we currently have 90 major investigations into investment fraud—not pension fraud specifically but investment fraud in the round, which will include pension fraud. That is across the Serious Fraud Office, the NCA, the Financial Conduct Authority,all the regional and organised crime units and policing. We are doing our best to try to make sure that those are absolutely the most important cases, that we have done the deconfliction across them to make sure that all the links have been spotted and that we are working across all the agencies to best support all of those cases.

“If we can drive those through, we think we can make more of a material dent in the problem that we are seeing. I hope that helps,” he said.

Pensions watchdog tracking £54M proceeds of crime

Nicola Parish, Executive Director of Frontline Regulation at The Pensions Regulator, told MPs how they were using the Proceeds of Crime Act to try to retrieve squandered funds. “we are looking at scams that we think have taken more than £54 million. That is what the investigation looks like at the moment. We have 44 suspects in 82 schemes and over 18,000 savers.

“We are working with five different police forces, so there is lots of activity, lots of investigations, lots of prosecutions going on, which then gives you the opportunity to use POCA [Proceeds of Crime Act] to get the money back, but it is still very hard to do that.”

Much of Parish’s testimony also pushed prevention as the cure: “Those moneys are dissipated and very often that is what has happened, so it is much better not to hand over the money in the first place.”

Tensions with Tech Giants

The Financial Conduct Authority’s Executive Director of Enforcement, Mark Steward, told the inquiry that social media is fuelling a rise of fraud perpetrated online, and that this should be considered as an Online Harm: “It is clear that social media is largely unregulated in this space and that there are few gateway controls on the admission of advertising into either the search engines or Twitter or with Instagram.

“That is something that concerns us. We have started a dialogue with social media to try to address this, but we do not have any real powers here.”

City watchdog to consult on ‘duty of care’ to consumers

Before Christmas, reviews of the Connaught and London Capital and Finance scandals blasted the UK’s City watchdog, the Financial Conduct Authority, over its historic failures of whistleblowers and victims of investment fraud.

Those scandals again raise the perceived need for a duty of care from financial watchdogs towards proven victims of financial crime or misconduct.

Last week Stephen Timms, Chair of the Pension Scams Inquiry, asked the Mark Steward about this issue.

Timms said: “The FCA has consulted a number of times on the idea of a duty of care for providers, putting that into regulations. That has not happened yet. Why has it not been done?”

Steward replied: “I don’t think we have consulted yet. It remains a high-priority issue for us and we have indicated that we will do something here. We are working on it now. I think there were some delays last year because of all that was happening in the world last year, but we are focused on producing something in the early part of this year for consultation.”

Watch that space. Also, coming up in February the FCA’s former chief, the now-Governor of the Bank of England Andrew Bailey, will be quizzed by Treasury Select Committee MPs on the FCA’s handling of financial scandals.

Hear victims' testimony

I produced a succinct podcast for TTF in December on the blistering evidence being given to MPs by victims Susan Flood, Dennis Waite and others. Do you like the podcast? Let us know. You can contact me on alex.v.winter@transparencytaskforce.org

Press Timeline of relevant articles:

12 Jan 2021 – Bitcoin: be prepared to lose all your money, FCA warns consumers by Kalyeena Makortoff  for the Guardian

07 Jan 2021 Regulators and police say Covid lockdowns have driven up online pension scams and demand regulation of Google, Facebook and others by Jim Armitage for the Evening Standard

04 Jan 2021Bank of England fails to publish officials’ expenses by Alex Ralph for the Times

03 Jan 2021Five years on and still no answers over HBOS affair by Jill Treanor and Liam Kelly for Sunday Times

31 Dec 2020So, when WILL we learn truth about bank chiefs? Another year and still no sign of key HBOS probe by Lucy White for the Mail

24 Dec 2020ASIC drops investigation into Westpac, by Investor Daily in Australia

21 Dec 2020Financial Conduct Authority fines just ten wrongdoers this year by Patrick Hosking in the Times

19 Dec 2020 Andrew Bailey could return to face MPs after damning report on London Capital & Finance scandal by Ben Martin & Patrick Hosking for the Times

18 Dec 2020Google urged to vet online financial promotions better by Huw Jones for Reuters

18 Dec 2020Financial Conduct Authority insiders warned of London Capital & Finance-style minibonds in 2013 but nothing was done by Jim Armitage for the Evening Standard

18 Dec 2020Blue Gate escapes $13.5 million Connaught fund fine from FCA by Huw Jones for Reuters

18 Dec 2020Executives at Financial Conduct Authority to lose bonuses over London Capital & Finance scandal by Ben Martin for the Times – Bosses at the Financial Conduct Authority will lose £205,000 in bonuses after the highly critical report on the regulator’s handling of the London Capital & Finance scandal

17 Dec 2020The fallout from the financial regulator’s shocking failure on LC&F is not over yet by Nils Pratley for the Guardian

17 Dec 2020FCA did not ‘effectively supervise’ collapsed mini-bond issuer LCF, says report by Matthew Vincent for the Financial Times  “Members of the Transparency Task Force, a lobby group pushing for regulatory reform, pointed out that in his own representations to the Gloster review, Mr Bailey included a demand “to delete references to ‘responsibility’ resting with specific identified/identifiable individuals”.

17 Dec 2020Former Financial Conduct Authority boss Bailey apologises over handling of mini-bond scandal by Ben Martin for the Times

16 Dec 2020EU cannot be ‘captured’ by City of London, warns financial services chief by Sam Fleming and Jim Brunsden for the Financial Times

16 Dec 2020Treasurer plots ASIC shakeout by John Kehoe for Financial Review

15 Dec 2020How to remake Australia’s lame corporate watchdog by Pamela Hanrahan for Financial Review

03 Dec 2020HMRC ‘treat the victims of pension scams like criminals’: Taxman has benefited from the ‘proceeds of crime’ MPs are told by Tom Kelly for Daily Mail

25 Nov 2020FSCS seeks extra £92m in interim levy by Daniela Esnerova for MoneyMarketing

25 Nov 2020  – Trump Administration Targets Banks Divesting From Fossil Fuels In New Anti-Climate Rule by Sharon Kelly for DeSmogBlog

23 Nov 2020Bank of England policymaker warns of ‘pandemic hangovers’, as private sector shrinks – as it happened by Graeme Wearden for the Guardian

16 Nov 2020 – Bank of England ‘failing’ on climate change reform by Philip Aldrick for the Times

16 Nov 2020 – Fed moves closer to joining global peers in climate-change fight by Ann Saphir for Reuters

14 Nov 2020Fraudsters will exploit Covid vaccine to con vulnerable, warns National Crime Agency by Charles Hymas for Telegraph

09 Nov 2020Ombudsman inundated with complaints about loans by Katherine Griffiths for the Times

09 Nov 2020Spike in personal pension cases at ombudsman by Rachel Mortimer for FT Adviser

09 Nov 2020 – Regulator: Climate risk ‘looms even larger’ than pandemic by Avery Ellfeldt for ClimateWire (U.S.)

08 Nov 2020How financial services watchdog has reacted to UK consumer worries in Covid by Hilary Osborne for Guardian

08 Nov 2020Five predictions for banking regulation in a Biden presidency by Jon Hill for Law 360

05 Nov 2020Martin Lewis warns of ‘epidemic of scams’ after ICU nurse loses £8,000 by Scott Edwards for Wales Online

05 Nov 2020FCA bans adviser trio jailed for sex offences by Rachel Mortimer for FT Adviser

03 Nov 2020 – ‘We haven’t received a penny’: Business interruption insurance row intensifies as owners fear payout delays, by Elizabeth Anderson for iNews

03 Nov 2020Aviva’s shares fiasco highlights weakness of the city watchdog by Patrick Hosking for the Times

02 Nov 2020Banks have done little to help the country through the pandemic, so why is the government rewarding them? by Simon Youel for the Independent

29 Oct 2020 – Calls to sack Malta financial regulator CEO by Cristian Angeloni for International Adviser

27 Oct 2020U.S. group urges Biden to use financial regulation to control climate change by Valerie Volcovici for Reuters

27 Oct 2020 ‘Impact startups’ continue to raise funding during the pandemic despite difficulties faced by the wider tech startup sector by Sebastian Klovig Skelton for Computer Weekly

26 Oct 2020 – Why there must be thorough probe of claims made by Bank Signature Forgery Campaign – Greg Wright  for the Yorkshire Post

26 Oct 2020 –  Critics demand action over ‘flawed’ British Banking Resolution Service by James Hurley for the Times

24 Oct 2020Banks look to debt collectors to recover bounce back loans by Nicholas Megaw, Stephen Morris and Daniel Thomas for the FT

23 Oct 2020Bank Signature Forgery (film) by Nicholas Wilson for Corruption UK

22 Oct 2020 – UK fraud agency suffers string of senior departures by Kate Beioley for the FT

22 Oct 2020 HSBC froze £1.5bn of customers’ cash in ‘dormant accounts’ – report by Kalyeena Makortoff & Juliette Garside for the Guardian

22 Oct 2020Work harder to find fraud, watchdog tells auditors by James Hurley for the Times

17 Oct 2020 – MPs pursue claims bank signatures were faked on court papers by Rupert Jones for the Guardian

16 Oct 2020 We need universal digital ad transparency now by Laura Edelson, Erika Franklin Fowler and Jason Chuang for TechCrunch

15 Oct 2020 – Rising COVID-19 Rates Send NatWest Misselling Trial To Video by Bonnie Eslinger for Law 360

15 Oct 2020 – MPs Push Agencies to Act on Forged Signature Claims by Law360

13 Oct 2020 –  Mark Carney says banks should link executive pay to Paris climate goals by Kalyeena Makortoff for the Guardian

12 Oct 2020 ‘It is time to reboot the competition regime for the modern, digital age’ by David Wighton, The Times

12 Oct 2020 Gina Miller blasts FCA complaints scheme changes ‘unfair, immoral and illegal’ by Cristian Angeloni for Portfolio Adviser

12 Oct 2020MPs call for input on Pension Schemes Bill by James Phillips for Professional Pensions

10 Oct 2020 Give pension trustees power to fight scammers, say MPs by Kenza Bryan for the Times

08 Oct 2020  – Freedom to transfer pensions should be stripped where scams are suspected, industry experts urge by Jessica Beard for the Telegraph

08 Oct 2020 – Planned pensions shake-up passes first Commons hurdle by Law 360

08 Oct 2020 – WPC chairman says transfer rules ‘must be changed’ by Amy Austin for FT Adviser

07 Oct 2020 – Tech giants share blame for pension scams, MPs told by Law 360

06 Oct 2020 – FCA opens 85 cases over pension scam concerns by Amy Austin for FT Adviser

03 Oct 2020 – Record number of savers fall victim to investment fraud as scam adverts stay on Google by Andrew Ellson for The Times

02 Oct 2020A New Theory of Soil by Alex Varley-Winter for SustainAct

 
 
 
28 Sep 2020 – PM urged to show leadership in fight against scams by Amy Austin for FT Adviser
 
28 Sep 2020The 100 Whistleblowers who changed Wall Street by Stephen M. Kohn and Mary Jane Wilmoth for National Law Review
 
28 Sep 2020TTF calls for govt leadership on pension scams following meeting with PM by Sophie Smith for Pensions Age
 
 
26 Sep 2020 – £60m revamp for Action Fraud hotline that failed victims by Martin Beckford for The Sunday Times
 
25 Sep 2020 – FCA labels Google’s scam advert efforts ‘deeply frustrating’ by Rachel Mortimer for FT Adviser
 
23 Sep 2020 – Bank Forgery Campaign (video) by Andy Verity for BBC
 
 
20 Sep 2020 – Explore the FinCEN Files Data and Suspicious activity reports, explained by the International Consortium of Investigative Journalists (ICIJ); Fergus Shiel and Ben Hallman
 
21 Sep 2020 Flood of complaints expected over Covid-19 UK business loans, by Kalyeena Makortoff for the Guardian
 
 
 
16 Sep 2020 – Regulators Accused of Ignoring Scam Warnings by Jack Gray for Pensions Age
 
16 Sep 2020Tougher clampdown on pension scams is needed, MPs told by Vicky Shaw for Belfast Telegraph
 
 
11 Sep 2020 – ‘Delay changes to Watchdog Complaints Scheme’ by James Hurley for The Times
 
 
03 Sep 2020Regulators have not yet got to grips with how to close down crooks, warns TTF  by Hope William-Smith for Professional Pensions
 

24 Aug 2020Financial Conduct Authority rushes to minimise compensation for its failings by James Hurley for The Times

04 Aug 2020Have your say: Will the WPC’s inquiry into the impact of pension freedoms be too overshadowed by Covid-19 impacts? by Professional Pensions

03 Aug 2020 – ‘“I’m 39, have lost my job and am in debt – can I unlock my £18k pension?” … DON’T do it!’‘ by Steve Webb for This is Money

01 Aug 2020‘I lost £2.3m after I was conned into transferring my pension’ by Jessica Beard for the Telegraph

31 Jul 2020 ‘Common sense’ prevails as pension freedom withdrawals fall 17% — But drop is expected to be ‘a short-term blip’ by Robbie Lawther for International Adviser

31 Jul 2020HMRC figures show plunging pension freedom withdrawals by Hope William-Smith for Professional Adviser

28 Jul 2020MPs launch inquiry into pension scams  by Tom Kelly for Daily MailUK Pension Scams Under Scrutiny After 2015 Relaxation in Rules by Reuters & MPs launch wide-ranging pension scams probe by Justin Cash for MoneyMarketing

24 Jul 2020 – US business groups seek steps to stamp out online fraud by Leonie Barrie for Just Style

22 Jul 2020Pension scams increase amid lockdown by Sophie Smith for Pensions Age & Missed Opportunity to Use Victims in Scam Work by Amy Austin for FT Adviser

21 Jul 2020  Londongrad Calling: Is Europe’s Laundromat the ‘New Normal’? by Mark Conrad

20 Jul 2020 Campaigners Aim to Create Pension Scam Database by Michael Klimes & Government eyes unauthorised firms by Justin Cash for MoneyMarketing

17 Jul 2020 – Year ‘dominated’ by FCA shortcomings as 205 complaints made,  by Rachel Mortimer for FT Adviser

29 Jun 2020 – MPs Pushed to Launch Pension Scam Inquiry by Amy Austin for FT Adviser & Lawmakers Urged To Open Inquiry Into Pension Scams by Martin Croucher for Law 360

14 May 2020 – Under Rising Pressure on Climate, JP Morgan Rejects Shareholders’ Calls to Disclose Carbon Footprint by Alex Varley-WInter for DeSmog

11 May 2020 – FCA urged to build public trust in independent reviews by Rachel Mortimer for FT Adviser

30 Apr 2020 – FCA was warned three years ago about mini-bond firm Blackmore Bond, which collapsed with £45m of savers’ money by Ben Chapman for the Independent

15 Apr 2020 – Met police lose two thirds of finance officers as fraud soars by Ben Ellery for the Times

25 Mar 2020 – Care Home Wants NatWest Docs in Misselling Fight by Law360

20 Mar 2020 – Connaught review delayed as Covid-19 concerns loom by Rachel Mortimer in FT Adviser

07 Jan 2020It’s time to keep your pensions promise, Boris! The PM pledged to help these victims of a huge scam FOUR years ago – and they’re still waiting by Tom Kelly for the Daily Mail.

29 Dec 2019‘Lambs to the slaughter – tens of thousands of savers have lost up to £10billion in rogue pensions schemes sanctioned by the government… and now the taxman is threatening VICTIMS with fines’, and ‘Making millions from other people’s misery’: A Government adviser, call centre chief and pension scheme director are among those who stand accused of involvement in pension schemes that exploited loophole in the law by Tom Kelly for the Daily Mail

15 Aug 2019Victims hit by Connaught’s collapse blast City watchdog for ‘whitewashing’ independent review by Lucy White for Daily Mail

05 Aug 2019Plunder in paradise: The ‘adviser’ behind a Costa scam that has cost expat pensioners £25MILLION – and led one to attempt suicide by Laura Shannon for Mail on Sunday

05 Jul 2019 Government-owned bank ‘forging signatures’ in repossession cases by Andy Verity for BBC

18 Jun 2019“I came home to find my house had been stolen!” by Angela Ellis-Jones for the Daily Mail

20 Jun 2019 – FCA orders review of its handling of Connaught collapse by Rachel Mortimer for FT Adviser

13 Jun 2019 – Investigation into disgraced RBS small business unit branded a ‘whitewash’ by MPs by Ben Chapman for the Independent

29 Mar 2019MPs call for inquiry into alleged forgery of signatures by Andy Verity for BBC

15 Feb 2017 – RBS accused of fraud & forgery by customers and ex-employee by Andrew Hosken for The World Tonight BBC Radio 4

22 Dec 2016Solicitors suspended for roles in collapsed Brazilian investment scheme by Nick Hilborne for Legal Futures

23 Sep 2016Which? makes scams super-complaint by Adam French for Which?

08 Aug 2016The Latest Bank Interest Rate Scandal Signals A Crisis Of Australian Democracy by Professor Carl Rhodes for New Matilda