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What has happened?

In May 2023, the UK Government issued a new Policy Paper describing its fraud strategy for 2019 to 2025. This strategy is intended to deliver a 10% cut in fraud from its 2019 levels by December 2024. Delivery of the strategy is phased over a three-year programme of work to the end of 2025, led and governed by the Home Office. The Policy Paper is available here.

What are the key points?

The intentions described in the Policy Paper are to;

• establish a new National Fraud Squad with over 400 new posts and make fraud a priority for the police through the Strategic Policing Requirement,
• deploy the UK intelligence community and lead a new global partnership to pursue fraudsters wherever they are in the world,
• put more fraudsters behind bars through better investigation and prosecution processes for fraud and digital offences, including a new Failure to Prevent Fraud corporate offence,
• ban SIM farms used by criminals to send thousands of scam texts at once (a consultation on this has been launched),
• stop fraudsters from being able to send mass text messages by requiring mass texting services to be registered (this will be subject to a rapid review shortly),
• replace Action Fraud with a state-of-the-art system for victims to report fraud and cyber crimes to the police,
• ban cold calls on all financial products so fraudsters cannot dupe people into buying fake investments (the Government will consult on a wider ban on these cold calls by the summer, with implementation to follow as soon as possible),
• enable payment service providers to adopt a new risk-based approach to provide additional time for potentially fraudulent payments to be investigated,
• legislate to enable the Payment Systems Regulator to require reimbursement of all authorised fraud victims by all PSR-regulated payment service providers,
• require the FCA to undertake assessments of financial firms’ fraud systems and controls,
• publish a new cross-sector money mules action plan to disrupt money mule activity and protect the public,
• in May, bring newly strengthened rules come into force that will require all telephone networks involved in transmitting calls, either to mobiles or landlines, to identify and block spoofed calls, as far as current technology permits,
• stop people from hiding behind fake companies by improving the validity of the information in the Companies Register and making greater use of it, and create new powers to take down fraudulent websites,
• work with industry to make sure that intelligence is shared quickly with law enforcement,
• overhaul and streamline fraud communications so that people know how to protect themselves from fraud and how to report it,
• make the tech sector put in place extra protections for its customers, via the Online Safety Bill and an Online Fraud Charter and introduce tough penalties for those firms that do not, and
• shine a light on which platforms are the safest, making sure that companies are properly incentivised to combat fraud.

What does this mean for firms?

Reducing fraud is a top priority for the Government. The Policy Paper announced funding, initiatives and new expectations across law enforcement, regulators, the tech sector and financial services.

Specifically for financial services firms, the following applies:

• Ensure your fraud risk is sufficiently considered in your business-wide risk assessment for financial crime. Do you understand your fraud risks?
• Firms need to ensure their fraud controls are effective (in line with their fraud risks) and compliant. Thistle recommends conducting a review of your fraud controls to identify and remediate any weaknesses.
• For payment services firms, investigations and suspicious activity reporting procedures should be reviewed alongside the firm’s risk-based approach to ensure that enough time is being deployed to investigate potentially fraudulent payments.
• Also, for payment services firms, ensure you are prepared to implement mandatory reimbursement for authorised fraud victims.
• Finally, be alert to the upcoming cross-sector money mules action plan.

Author - Jessica Cath (Head of Financial Crime)

How can we help you?

Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as and when our team of specialists can serve as your right hand in a meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

Are you looking for help with your anti-fraud controls, or more general regulatory questions? Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.