The not so thin blue line: policing economic crime

Fraud is one of the most costly crimes to society, with the last estimate produced by the now disbanded National Fraud Authority suggesting that in 2012 this figure was £52 billion. Yet the response from the Government, from the criminal justice system, and – most importantly – law enforcement, does not match the magnitude of the problem.

These are difficult times for the police. The most recent statistics on police numbers suggesting that officer levels have returned to where they were in 2002 as a consequence of deep funding cuts imposed by the coalition government. Nevertheless, in view of the cost of fraud – which is certainly a significant under-estimation due to the fact that not all frauds are reported and no law enforcement agency has a 100% detection rate – the public has a right to expect that the policing response to fraud is proportionate to these losses, and on a par with resources dedicated to investigating other acquisitive crimes such as burglary and robbery.

We are told that crime rates are falling, so why would this be an issue? Well, closer inspection of the Crime Survey for England and Wales reveals that the estimate of crime does not include any data for credit or debit card fraud, yet the last estimate by the National Fraud Authority was that in 2012 fraud was estimated to have cost the financial services sector over £5 billion. Fraud itself is on the increase; data evidence shows that reported fraud by individuals has risen by 17% in the 12 months to the end of March 2014. Yet again, it is only right for the public to expect that there are adequate police resources to tackle this rising crime problem.

So let us explore what the policing response to fraud actually amounts to in terms of officers dedicated to investigating this type of crime. Over the last 20 years there have been several studies that have illustrated a decline in specialist police resources dedicated to investigating fraud. During the mid-1980s, research by Michael Levi suggested there were 588 fraud squad officers. The Fraud Review published in 2006 identified that this figure had reduced to 416, which included 126 in London, and that this resource was actually under threat. Further research conducted by Robert Gannon and Alan Doig in 2008 suggested that in the last decade there had been a slight reduction in the number of police officers dedicated to the investigation of fraud, to around 400 officers. This in itself evidences the low priority that fraud is given by law enforcement, when considering that numbers of police officers rose year on year from 2000 to 2010.

To obtain a more up-to-date picture of policing resources dedicated to fraud, during the Summer/Autumn of 2013 a research team from the University of Portsmouth’s Centre for Counter Fraud Studies used the Freedom of Information Act to obtain data from Police Constabularies on the resources dedicated to fraud and economic crime. The term ‘economic crime’ was used because some forces have an economic crime unit. However, these units focus not only on the investigation of fraud, but a range of other financially related offences such as  money laundering, counterfeit currency, and criminal involvement in a financial enterprise to name but a few. The expectation was that, in line with the overall reduction in police numbers, this figure would show a further decline in resources dedicated to fraud.

This was not to be the case. The numbers show that the resources allocated to tackling economic crime – excluding ‘financial investigators’ – within police forces in England and Wales currently stands at 624.3 (full time equivalent), higher than in 2006. This figure represents a mix of specialist police and civilian investigators, reflecting current trends in the increased civilianisation of some policing activities.

However, do not get too euphoric: this figure actually represents only 0.27% of all police personnel, further illustrating that the trait of giving fraud the status of a “Cinderella crime” continues. Even more worrying is that of the 48 police constabularies in the UK, seven police forces claimed they did not have an economic crime unit. So, don’t become a victim of fraud in Cumbria, North Wales, Bedfordshire, or Gloucestershire to name a few, as there won’t be anybody available to investigate your case! This may also explain why many frauds reported to the national fraud reporting centre Action Fraud never get investigated. Similarly, how many civilian fraud investigators referring an internal fraud case to the police will be familiar with the response “the offender has been sacked, what more do you want?”

Although the ‘thin blue line’ turned out to be not so thin after all, when considering that the number of recorded fraud cases has risen by two fifths over the last three years, and that there are four times as many officers dedicated to investigating benefit fraud (which only accounts for £1.9 billion of a £52 billion fraud problem), the fact that the police are only able to offer 0.27% of the total resource to fraud and economic crime does seem rather thin. Whilst the announcement that the Metropolitan Police Operation Falcon will create the largest cyber-crime and fraud team in Europe, the present policing figures really do suggest that it’s ‘open season’ for fraudsters.