Fraud Strategy · first published 3 May 2023
The UK government published this cross-government Fraud Strategy in May 2023, setting out how it plans to reduce fraud incidents by 10% from 2019 pre-Covid levels by the end of this Parliament. It covers fraud against individuals and businesses — not fraud against the public sector, which is handled separately by the Public Sector Fraud Authority. For small businesses, the key changes are: a new corporate criminal offence of 'Failure to Prevent Fraud' (targeting large organisations, but signalling direction of travel), a £100 million investment in law enforcement capacity, and new obligations on banks, telecoms, and tech firms to block fraud at source. The strategy does not directly impose procurement or bidding rules, but it shapes the fraud-prevention environment that suppliers and buyers operate in.
WHO THIS APPLIES TO
THE ENKII VIEW
The 'Failure to Prevent Fraud' offence in the Economic Crime and Corporate Transparency Bill is explicitly scoped to large organisations for now, but it signals that government expects all firms to have reasonable fraud-prevention procedures in place — SMEs that build and document such procedures now will be better placed as expectations widen. The replacement of Action Fraud with a state-of-the-art reporting system and the new National Fraud Squad mean that when SMEs are defrauded (e.g. invoice fraud, impersonation scams), reporting routes and police response should improve materially. SMEs in the tech, telecoms, financial services, or accountancy sectors will face more direct pressure through voluntary sector charters and potential mandation if voluntary progress is insufficient.
1. Review and document your internal fraud-prevention procedures now — even if the 'Failure to Prevent Fraud' offence formally targets large organisations, demonstrating 'reasonable procedures' is the defence the law rewards and expectations will widen.
All SMEs, especially those in tech, telecoms, financial services, or accountancy — The Economic Crime and Corporate Transparency Bill introduces a corporate 'Failure to Prevent Fraud' offence where prosecution turns on whether the organisation had 'reasonable procedures in place to prevent' fraud by employees.
2. Use the upgraded Action Fraud reporting system when it launches (within a year of May 2023) — improved analytics and faster case routing to police mean reports are more likely to result in action than before.
SMEs that have been victims of fraud (invoice fraud, impersonation scams, etc.) — The Home Office is investing over £30 million to replace Action Fraud with a service that provides case tracking, faster intelligence packages to police, and swifter bank-level intervention to stop money reaching fraudsters.
3. Engage with the new online fraud charter process (targeting Summer 2023 agreement) and implement FCA-authorised-list checks for any financial promotions you run or host — government is already citing Google's near-100% reduction in scam financial ads as the benchmark.
SMEs in the tech or online advertising sector — The online fraud charter requires tech firms to cross-reference financial promotion advertisers against the FCA authorised list; government is monitoring compliance and considering mandation.
4. Monitor your sector charter commitments and voluntary fraud-reduction targets — new charters with insurance and other sectors are due by early 2024, and the Joint Fraud Taskforce will set measurable voluntary targets once a baseline is established.
SMEs in insurance, accountancy, or telecoms — The Joint Fraud Taskforce agreed in November 2022 to measure industry fraud-prevention impact and set voluntary targets; non-compliant sectors risk regulatory escalation.
5. Train staff to recognise authorised push payment fraud (e.g. invoice redirection, romance scams targeting employees) — the strategy highlights that authorised fraud now accounts for 54% of incidents, overtaking unauthorised fraud, making human-layer defences critical.
All SMEs — Figure 2 in the strategy shows authorised fraud rose from 44% to 54% of all fraud between March 2020 and March 2022, driven by criminals emotionally manipulating victims into approving payments themselves.
6. Ask your bank what fraud-slowdown controls are in place for suspicious payments and make use of confirmation-of-payee and payment delay features — the strategy commits to helping banks slow down suspicious payments as a key pillar.
SMEs that regularly transfer large sums (e.g. in construction, professional services) — The 'Block fraud' pillar explicitly includes 'help banks slow down suspicious payments' as a key action, meaning banks are expected to have and use these tools.
Every rule below quotes the official document verbatim.
This strategy covers fraud where the victims are members of the public or businesses; fraud against the public sector is handled separately by the Public Sector Fraud Authority. (All sectors, England and Wales primarily; cross-UK on some elements)
“This is a cross-government strategy that covers fraud where the victims are members of the public or businesses. The response to fraud against the public sector is led by the Public Sector Fraud Authority (PFSA)”
Fraud now accounts for over 40% of all crime in England and Wales, with an estimated 3.7 million incidents in the year ending December 2022. (England and Wales)
“In the year ending December 2022, there were an estimated 3.7 million incidents of fraud in England and Wales – over 40% of all crime.”
The government's target is to cut fraud incidents by 10% from 2019 pre-Covid levels by the end of this Parliament. (UK-wide)
“This strategy will tackle fraudsters head on and cut fraud by 10%, protecting the British people's hard earned cash from criminals and putting more fraudsters behind bars.”
A new National Fraud Squad (NFS) of over 400 new specialist investigators will be established across the NCA, City of London Police, and Regional Organised Crime Units, with a further 100 posts by January 2024 and another 100 by 2025. (UK-wide law enforcement)
“The NFS will be made up of over 400 new posts across policing and the NCA by 2025 alongside existing resources. Jointly led by the NCA and CoLP, the NFS already has 300 new and existing investigators in post. A further 100 will be in post by January 2024, followed by another 100 by 2025.”
£100 million of new investment is committed to law enforcement to fight fraud as part of a wider £400 million investment in tackling economic crime. (UK-wide)
“We have already started by committing £100 million of new money to bolster law enforcement in the fight against fraud as part of a wider £400 million investment in tackling economic crime.”
A new corporate offence of 'Failure to Prevent Fraud' will be introduced via the Economic Crime and Corporate Transparency Bill, under which a large organisation can be prosecuted when an employee commits fraud that benefits the company and the company lacked reasonable prevention procedures. (Large organisations; UK-wide)
“We will use the Economic Crime and Corporate Transparency Bill to introduce a new corporate offence of Failure to Prevent Fraud, where a large organisation can be prosecuted when an employee commits a fraud which benefits the company, and which the company did not have reasonable procedures in place to prevent.”
Action Fraud will be replaced within a year of the strategy's publication (May 2023) with a new state-of-the-art national fraud and cyber crime reporting service, costing over £30 million across three years. (UK-wide; all fraud victims including businesses)
“the Home Office has committed to spend over £30 million across three years, alongside contributions from the City of London Corporation, to replace and improve the service.”
A new online fraud charter with technology companies is to be agreed by the end of Summer 2023, with voluntary targets for fraud reduction to follow. (Technology sector companies)
“The government is already working with the tech sector on the new online fraud charter that will be delivered by the end of summer 2023.”
New sector charters with the insurance and other sectors are to be agreed by early 2024. (Insurance and adjacent sectors)
“The government will secure agreement on charters with other key sectors in the fraud ecosystem, including the insurance sector by early 2024.”
In 2020, around one in five businesses (18%) had been a victim of fraud in the previous three years, according to the Economic Crime Survey. (UK businesses, all sizes)
“we also know from the Economic Crime Survey that in 2020 around one in five businesses had been a victim of fraud in the previous three years (18%).”
The government will ban cold calls on all financial products to prevent fraudsters duping people into fake investments. (Financial products sector; UK-wide)
“ban cold calls on all financial products so fraudsters cannot dupe people into buying fake investments”
The UK-US Data Access Agreement, already in force, allows UK public authorities to obtain data directly from US-based tech companies for fraud and serious crime investigations. (UK law enforcement; US-based tech companies)
“The UK-US Data Access Agreement, which entered into force last October, permits UK public authorities to obtain data directly from US-based companies, for the purpose of preventing, detecting, investigating, and prosecuting serious crime, including fraud.”
Tech companies are expected to make fraud reporting available within a single click on their platforms, with potential mandation if voluntary progress is insufficient. (Technology/social media companies)
“We will closely monitor progress and consider mandating that all tech companies must offer a simple, seamless, and swift reporting mechanism if voluntary progress towards this is insufficient.”
Currently, for every 1,000 estimated frauds committed there is only one successful prosecution. (UK-wide)
“Currently, for every 1000 estimated frauds committed there is one successful prosecution.”
This briefing is enkii's interpretation of the official document — the official text always governs.
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