Insights from our ‘Tackling high-harm fraud’ webinar

Jul 10, 2024
In the latest in our economic crime webinar series, Ian Dyson QPM chaired an expert panel to explore strategies to tackle a sophisticated and organised adversary.

What are the latest vulnerabilities fraudsters are targeting? How are they using AI? And what is the impact of legislation like the Economic Crime Transparency Act?  

Our latest webinar saw a multi-disciplined panel of counter fraud experts gather to capture the current state of high-harm fraud, and how we can better detect and prevent the crime perpetrated by increasingly sophisticated borderless organised criminal groups.   

Chaired by Ian Dyson QPM, former City of London Police Commissioner and Distinguished Fellow at Royal United Service Institute (RUSI), the panel included:   

  • Nick Sharp, Deputy Director, National Economic Crime Centre, National Crime Agency 
  • Julie Barnes, Assistant Director – South, The Insolvency Service 
  • Helena Wood, Director of Public Policy and Strategic Engagement, Cifas 
  • Ben Cooper, Partner, Economic Crime Compliance, TLT LLP 
  • Matt Horne, Director of Intelligence and Investigations, Clue Software

Now available to rewatch again below, in this article, we share some key insights from the webinar. 

The evolving and complex nature of fraud

Fraud is increasingly complex, with Nick citing that over 80% of incidents now have an online element and 70% an overseas connection.   

While two-factor authentication has curbed some forms of fraud, high-impact scams like romance fraud are on the rise, causing profound financial and emotional harm. Identity theft persists as a major concern for businesses, while grappling with escalating losses from email compromises. 

Devastating individuals lives and businesses, proceeds increasingly funding organised criminal groups operating internationally.  

These groups are coordinated, using dark web platforms to network and refine their tactics, such as exploiting upcoming reimbursement schemes to exploit lapses in consumer vigilance, while manipulating economic downturn to enlist a wider demographic of individuals for as mules for money laundering efforts: “it’s not just students and young people acting naively.” 

These groups are coordinated, using dark web platforms to network and refine their tactics, such as exploiting upcoming reimbursement schemes to exploit lapses in consumer vigilance. 

The adoption of generative AI remains troubling in the creation of more convincing scams. “We’re only spotting bad generative AI. I’m sure there’s quite a lot of good generative AI being used that we’re just not spotting,” Helena noted.   

Greater data sharing and collaboration

A recurring theme was the necessity for enhanced data sharing and collaboration between law enforcement, government, and the financial sector. Helena emphasised, “Volume prevention requires getting data to the front line, so banks can take proactive measures.”

Initiatives like the Cifas National Fraud Database facilitate cross-industry information sharing, yet leveraging data analytics capabilities remains underutilised. Overcoming GDPR concerns is crucial; secure data sharing and privacy-preserving technologies are solutions.

To tackle fraud effectively, public-private partnerships are vital. Embedding personnel and joint task forces could enhance coordination while upskilling partners. International cooperation is crucial as fraud becomes increasingly cross-border.

“We’re in this together,” said Nick, emphasising the need for collaborative efforts and technological integration across sectors: “Only by working across sectors can we effectively combat fraud.” 

Prevention through education and tech

Preventative measures were underscored as critical; “We’ve always been talking about success in terms of prosecutions and arrests,” said Helena, “even if every police officer focused solely on fraud, it wouldn’t be enough…” 

Public education, robust authentication methods, and partnerships with tech firms to fortify systems were identified as crucial steps forward.

“The most common type of victim is a very savvy, online person who would consider themselves safe, and actually that’s who fraudsters are really targeting,” said Helena. 

“Helping consumers with a clear and consistent message on how to prevent fraud and report is massively important,” agreed Nick.

Continued collaboration with and innovation by the financial sector will be crucial in early intervention: “The more you know your customer, the more you can spot suspicious transactions,” said Ben.

However, measuring the effectiveness of fraud prevention remains a challenge for counter fraud teams, particularly when the focus is on deterring fraud before it occurs. 

Impact of counter fraud legislation

The significant impact of legislation like the Economic Crime and Corporate Transparency Act (ECTA) was a key discussion point.  

The Act introduces new offences, including the failure to prevent fraud, making companies responsible for fraud committed by employees or third parties and soon requiring all organisations to review fraud risks and controls. 

ECTA also strengthens regulations for verifying director identities and striking off shell companies. Julie Barnes noted, “The Insolvency Service is working closely with Companies House to enforce these new laws.” 

There are indications that the UK government wants to expand liability to technology companies under similar failure to prevent offences for fraud occurring on their platforms, further increasing corporate accountability. 

Conclusion

The webinar reinforced that while the fraud landscape is dynamic and multifaceted, a holistic approach involving technology, collaboration, and proactive prevention is essential.

As Ben put it, “It’s an arms race, but they are always one step ahead. We need a joined-up approach across industry, financial services, and law enforcement to level the playing field.” 

Learn more about using Clue for fraud detection and prevention. Schedule a consultation with our Director Intelligence & Investigations, Matt Horne.

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