From words to action: The outlook on fraud in the UK in 2025

If politicians and policymakers were feeling jubilant this time last year following indications of a 10% drop in the levels of fraud in the UK, the plateauing of fraud statistics and the early indications of increased fraud levels, may be cause for a more muted start to 2025.

As our six-month data released last year showed, while fraud losses in the financial industry appear to be holding steady, the growth in fraud against the wider business community – particularly increases in organised fraud against the telecommunications and online retail sectors – has risen. Coupled with this, no discussion on fraud now takes place without mention of the looming threat of AI and its potential to take the threat from bad to inconceivably worse.

All of this will be a cause for concern for the UK’s first ever Fraud Minister, Lord Hanson. As he returns to his desk following the Parliamentary recess, he will be looking to officials for decisive action. They will, thankfully, be able to point to a number of significant initiatives underway across regulation, legislation and policy due to deliver in 2025.

Ofcom’s Illegal Harms Codes of Practice

In December 2024 we saw the publication of the first iteration of Ofcom’s Illegal Harms Codes of Practice and guidance. This sets out Ofcom’s expectations as to how social media and online search services can demonstrate compliance with the obligations in the Online Safety Act 2023.

From mid-March onwards the tech platforms and search services covered by the Act will have to take a range of reasonable measures to tackle fraud on their platforms or face action. It is hoped that these measures, along with the clear political expectation set by the Chancellor’s Mansion House speech in November 2024, will play a significant part in reducing the role of online platforms in the UK’s fraud epidemic.

Data Use and Access Bill

October 2024 saw the introduction of the Government’s Data Use and Access Bill to Parliament. An amended and reconstituted version of the previous government’s Data Protection and Digital Information Bill, the legislation, if passed, will create a new framework for the sharing of information for the prevention of crime (including fraud) by creating new ‘recognised legitimate interests’ for the sharing of information.

While current data protection regulation can be – and is being – ably navigated by the counter-fraud community to prevent fraud, this new provision should remove any residual barriers to data-sharing for the prevention of fraud.   

The UK’s Fraud Strategy

In opposition, the Labour Party committed to developing a new expanded Fraud Strategy. The internal processes for drawing up the new strategy got underway behind closed doors late last year, but will commence in earnest in 2025, with a new Strategy (or a near-final draft) expected by the end of the year.

This is likely to be more comprehensive than the last, straddling fraud against consumers, the Public Sector and against businesses. It is also likely to include an increased focus on prevention and data-sharing as core solutions.

These measures, and the range of other initiatives already in train across the counter-fraud eco-system, may go some way to allaying any Ministerial concerns. However, where could the Government seek to go further and faster to drive the issue into remission rather than stasis?

How to pay for an expanded response?

It is clear that while fraud is a priority for the new Government, the Spending Review outcomes for all policy areas are likely to be parsimonious. With limited public funding and a need to up the ante on fraud, the Government will need to identify an alternative income stream.

In the Cifas Fraud Pledges, launched shortly before the 2024 election, we called for a new ‘Fraud Levy’ to fund reforms to the system. Since then, backed by both UK Finance and the Payments Association, a Fraud Levy, akin to the existing Economic Crime Levy on the ‘regulated sectors’ for anti-money laundering, is, we believe, a necessary and temporary measure to pump-prime an ailing system.

Policing and the fraud response   

The Government both before and after its election put a strong focus on crime and policing as one of its core deliverables. However, like those that came before them, policing policy seems myopically focussed on street-level policing to the detriment of other areas. But as journalist Danny Shaw recently wrote, “bobbies on the beat won’t stop the cyber crime wave”.

With up to 50% of crime now occurring online, it is clear that as part of the Government’s wider review of UK policing, it needs to urgently consider what shape the response to online crime will look like in the future.

A global response to a global problem

In 2024, the UK Government showed significant leadership in driving action on fraud under the UN Convention on Transnational Organised Crime. This is to be commended as a necessary first step. However, it is a starting point and not an end.

Despite the wider geo-political uncertainty of both ongoing global conflict and the forthcoming Trump presidency, the non-partisan nature of fraud means that the UK should seek to work across political fault-lines to translate the intentions of 2024 into practical measures at an international level.

This may include establishing formalised cross-border enforcement cooperation partnerships and technical assistance programmes with priority fraud ‘source’ countries, via its development assistance programme.  

In summary, despite the wider geo-political environment and, indeed, the looming threat of AI as an accelerant to the fraud threat, as the Fraud Minister opens his red box and examines the statistics, he should not be overly disheartened. While the journey will be a long one, it has certainly moved on apace from the ‘lost decade’ of the 2010s. However, warm words are not going to be enough to shift this sticky problem – the political intent of 2024 must turn into cold, hard action of 2025.