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The need to do better in tackling fraud has become a consensus issue across the UK political spectrum, with Labour, Conservative and Liberal Democrat lawmakers pushing the government to expand and improve the national approach to the issue.
In a debate held in the UK’s House of Commons, new Labour MP for York Outer, Luke Charters, set out a variety of recommendations for the new government to take on payments fraud.
Fraud has become an increasingly significant issue for UK lawmakers, with the Home Affairs Select Committee having carried out an inquiry into the issue in 2023 and up until parliament was dissolved in June this year.
During his speech, the MP and former fintech professional highlighted the emotional toll that fraud takes on individuals, particularly vulnerable victims.
“Fraud places an emotional burden on victims. It ruins lives. We all know that as MPs from our surgeries," he said.
Charters pointed out that fraud is no longer the work of “hobbyists in basements”, but increasingly involves nation-states and organised crime groups.
"Criminals are smart and frequently shift their modus operandi to get around our systems," he warned, stressing the sophistication of modern fraudsters.
Poor coordination
A key theme of Charters' speech was the inadequacy of current efforts to tackle fraud, with weak national coordination exacerbating the problem.
"We currently suffer from relatively weak national coordination in tackling fraud and economic crime," he said, adding that local police forces often deprioritise fraud due to the cross-border nature of many cases.
He also criticised the existing Online Fraud Charter, introduced by the previous Conservative government, as being "non-statutory and voluntary".
His critique was echoed by Chris Coghlan, the Liberal Democrat MP for Dorking and Horley, who said that the “numbers involved are staggering, both in terms of the billions of pounds that have been lost to fraud and the sheer volume of crime that is now online.”
“Despite those facts, however, the previous government’s response was lacklustre,” he said.
Coghlan went on to say that the previous government “treated fraud with such little seriousness that they did not include it in crime statistics”.
However, Paul Holmes, a Conservative lawmaker representing Hamble Valley, said that “the previous government showed leadership in this area”.
“They introduced a reporting mechanism that was bolstered by replacing Action Fraud with a state-of-the-art system for victims to report fraud, while a new national fraud squad, with more than 400 new specialist investigators, made fraud a priority for the police,” he said.
Despite acknowledging the challenges, Charters expressed optimism that the UK could lead the fight against fraud and economic crime.
He urged the government to adopt a more ambitious anti-fraud strategy, including setting clear targets and establishing a new national anti-fraud centre.
Cost of fraud
Fraud currently accounts for 1 percent of police resources, despite how much it has surged in recent years, a disparity that Charters described as "chilling".
During his speech, he pointed to the alarming financial cost of fraud, estimating that payments fraud alone costs the UK economy around £1.2bn annually.
The emotional and financial toll is especially harsh on the most vulnerable, including those on lower incomes and with less digital literacy.
Charters outlined seven key recommendations aimed at addressing the fraud crisis, starting with the creation of a national anti-fraud centre modelled on Australia’s National Anti-Scam Centre.
He called for better coordination between agencies, including the Serious Fraud Office, the Financial Conduct Authority and the National Crime Agency, as well as local police forces.
“Our institutions are currently too fragmented to properly deal with fraud,” he said.
Charters also echoed his counterparts in other parts of the world, including the European Parliament and regulators in countries such as Singapore, by calling for more intervention on the topic of social media accountability for fraud.
He suggested that the government could introduce “a shared responsibility and liability for social media and telecommunications firms to tackle fraud origination and incentivise them to invest to prevent fraud”.
“A new anti-fraud centre could govern regulatory powers over social media companies and impose penalties or issue guidance to reduce fraud,” he said.
Charters also recommended the appointment of a parliamentary anti-fraud champion and stronger frameworks for data sharing between banks, payment providers and social media platforms.
He noted that a lack of mechanisms for sharing data due to General Data Protection Regulation restrictions is currently a major barrier to stopping fraud at its source.
Charters concluded with a call for urgent action, warning that if fraud rates continue to rise unchecked, the UK risks becoming “the worst developed country globally per capita when it comes to fraud rates”.
He also argued that tackling fraud could significantly boost the UK economy, potentially contributing £6bn to GDP over five years, and called on the government to take decisive steps to protect consumers and businesses from financial crime.
By taking bold actions, Charters said, the UK cannot only reduce fraud rates but also enhance its reputation as a global hub for fintech and financial services.
An international issue
The debate saw further interventions, including from Sureena Brackenridge, the Labour MP for Wolverhampton North East, who addressed the increasingly international nature of fraud, noting that many fraudsters operate from abroad, often in organised rings based in countries such as India, the Philippines, South Africa, Brazil and parts of Eastern Europe.
“Our country, unfortunately, is a prime target for such activity. We do much of our shopping and banking online, and the widespread use of the English language makes it easier for fraudsters abroad to deceive and manipulate their victims here,” she explained.
In a call for a more global approach, Brackenridge suggested incorporating fraud prevention into future trade negotiations with countries where such criminal activity is prevalent.
"Let us make fraud prevention part of the agreements, giving the countries a real incentive to work with us to tackle the issue," she urged, stressing the need for "strong, global, coordinated action" to protect UK citizens from international fraudsters.
Government 'steadfast' in determination to tackle fraud
In response to a parliamentary debate on fraud, the UK’s minister for security, Dan Jarvis, praised the contributions of MPs and stressed the government’s commitment to tackling economic crime.
Jarvis commended Charters, acknowledging the critical threat fraud poses to national security and economic growth.
“There is a clear consensus that economic crime and fraud are pernicious threats that ruin lives and damage our prosperity,” Jarvis said, highlighting the need for continued action.
He noted that fraud accounts for 36 percent of crime in the UK, according to the 2024 Crime Survey for England and Wales, with one in 18 individuals affected in the last year.
Jarvis also acknowledged the growing international dimension of fraud, and pointed to the government's efforts to combat online fraud through industry collaboration, such as the sector charter programme and the introduction of spam shields that have blocked more than a billion fraudulent texts.
The minister also outlined key government initiatives, including the establishment of a national fraud squad and enhanced public awareness campaigns to better protect victims.
He assured MPs that the government remains committed to introducing further legislation where necessary to combat fraud and economic crime.
“We are steadfast in our determination to combat economic crime wherever and however it manifests itself,” Jarvis concluded, pledging to work closely with MPs and stakeholders to address this critical issue.
