Fighting Fraud (Fraud Act 2006 and Digital Fraud Committee Report)

Lord Davies of Brixton Excerpts

Friday 30th June 2023 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, I was not a member of the committee but I very much welcome this report and the introduction to it from the noble Baroness, Lady Morgan. I came to the report afresh and of course the figures are shocking. It is astounding that people are placed under this sort of pressure. I could go through and repeat the figures that have already been given, but the central thing is that this is 41% of crime and is given 1% of the anti-crime budget. That is clearly wrong, particularly when the 41% is probably massively underreported. While this is a cyber problem, the report makes reference to analogue fraud, which clearly causes a lot of pain, suffering and financial loss. However, the massive growth is taking place in cybercrime: why would you go and knock on someone’s door when you can send them an email?

I have three substantive points to make. First, it would be interesting to know the extent to which the committee considered this: it seems to me that we need a specialist agency to tackle this epidemic. Reading the report, the general line seems to be that it should still be part of the mainstream police system, yet the task is so specialist and immediate, requiring massive action, that we need a specialist task force to undertake it, at least initially. I understand the objections to setting up yet another body, when we already have bodies that have a responsibility to sort this out, but the scale of it requires—at least for a period of time—a specialist action force of some form. That of course will need funding, and that clearly should come from the links in the fraud chain. The providers are providing the tools with which the fraud is undertaken, and it is reasonable to expect them to meet more of the cost of tackling it.

Secondly, I emphasise yet again the relationship between fraud and poor mental health. The report includes some interesting work on vulnerability to fraud, but that relationship has a special place. It is a relationship where there is a cause: many people suffer poor mental health because they have been victims of fraud. At the same time, people who already suffer from poor mental health are clearly more vulnerable. The figures in the report show how fraud is distributed but do not give the respective sizes of those populations within the population as a whole—so they do not tell the full story and it would be interesting to get some more figures on that. I emphasise that any action needs to take into account the specific position of people who have, or are at risk of, poor mental health. I hope that the Minister can at least make some sort of reference to the importance of tackling that.

My third point is about the alphabet soup of bodies that are rightly set out in an appendix. Unfortunately, one was missed: I can add to the list the Fraud Compensation Fund. It sounds pretty general but it does not compensate all fraud; it compensates a very narrow and specific form of fraud in relation to pension schemes. If a pension scheme loses assets through fraud and the employer is insolvent, the Fraud Compensation Fund, which is an offshoot of the Pension Protection Fund—the financing is different—has to provide the compensation. I highlight that point because, self-evidently, it is little known and there are still important questions that need to be pursued about people’s entitlement under that scheme and its funding. I raise that just to give it a bit more visibility, but it is clearly part of the fraud landscape and will need to be included in any further list of the alphabet soup.