News

Please see below for some recent news articles that might be of interest.

Government outlines details of new UK data protection laws

Posted: 14 August 2017

The UK Government has announced more details behind its upcoming Data Protection Bill, which will transpose into domestic law the European Union's (EU) General Data Protection Regulation (GDPR).  In a statement of intent the Government sets out its plans for the legislation, which is yet to be introduced to parliament.  Much of the planned legislation follows the lead of the GDPR, which comes into effect in May 2018, but the proposals include additional elements aimed at businesses.
More on the Out-law.com website here.

Couple jailed for fraud after longest UK criminal trial

Posted: 14 June 2017

A man who organised a large-scale property fraud has been jailed for 11 years after what was believed to have been the longest criminal trial in UK legal history.  Edwin McLaren, 52, put together the £1.6m property fraud scheme, which involved duping vulnerable victims in financial difficulty to sign over their homes.  He was found guilty of 29 charges in May after a trial at the high court in Glasgow, which began in September 2015 and heard evidence over 320 days.  He was sentenced on Tuesday.  His wife, Lorraine McLaren, 51, was found guilty of two charges, involving a fraudulent mortgage application on their own home. She was sentenced to two and a half years.
More on The Guardian website here.

UK's longest fraud trial: couple found guilty

Posted: 18 May 2017

A husband and wife have been found guilty of fraud after the longest trial in UK criminal history.  Edwin McLaren, from Quarriers Village in Renfrewshire, was found guilty of property fraud totalling about £1.6m.  The 52-year-old, who was said to be the "brains behind the scheme", was convicted of 29 charges and his wife Lorraine of two.  The trial at the High Court in Glasgow began in September 2015 and heard evidence for 320 days and is thought to have cost about £7.5m, with more than £2.4m in legal aid paid for defence lawyers.
More on the BBC news website here.

Huge rise in financial sector breaches in 2016

Posted: 28 April 2017

More than 200 million financial services records were breached in 2016, representing a 937% percent increase over the previous year, according to data from IBM.  The data from IBM's X-Force Research team revealed the financial services industry was attacked more than any other industry in 2016 - 65% more than the average organisation across all industries. “Cyber-attacks targeting the human factor are still a major issue,” says Bryan Sartin, executive director, global security services, Verizon Enterprise Solutions. “Cybercriminals concentrate on four key drivers of human behavior to encourage individuals to disclose information: eagerness, distraction, curiosity and uncertainty. And as our report shows, it is working.”
More on Finextra here.

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Airbnb and Holiday Lettings fraud risk

Posted: 25 April 2017

A Which? investigation has proved just how easy it is for fraudsters to put fake accommodation listings on popular holiday-letting websites.  The company set up fake profiles on Airbnb and TripAdvisor’s Holiday Lettings, and successfully placed eight scam listings on each.  In each case, it took just minutes to create the scam listings and no proof of ID or any proof the accommodation actually existed was requested.  Many holidaymakers have lost thousands of pounds through scam holiday lets just like this; booking online and then realising that the villa or apartment doesn’t exist.
More on the Which? website here.

Concerns raised over fraudulent use of fundraising pages

Posted: 21 April 2017

After doubts were raised over some JustGiving pages launched in the aftermath of the Westminster terror attack, UK Government ministers have been urged to impose regulation on fundraising pages– or face a growing risk of unscrupulous fraudsters taking advantage of tragedy. David Clarke, the former director of the National Fraud Intelligence Bureau, said fundraising sites must do more to protect users: “Fraudsters are always looking for new ways to steal and launder dirty money and we must ensure this vital service for good is not open to abuse by criminals. Government must act quickly and decisively to protect the goodwill of our charitable citizens.”
More on the Guardian website here.

UK banks handled billions of dollars in laundered Russian money, says report

Posted: 21 March 2017

Britain’s high street banks processed nearly $740m from a vast money-laundering operation run by Russian criminals with links to the Russian government and the KGB, according to a report in The Guardian.  HSBC, the Royal Bank of Scotland, Lloyds, Barclays and Coutts are among 17 banks based in the UK, or with branches here, that are facing questions over what they knew about the international scheme and why they did not turn away suspicious money transfers.  Documents seen by the Guardian show that at least $20bn appears to have been moved out of Russa during a four-year period between 2010 and 2014. The true figure could be $80bn, detectives believe.
More on The Guardian website here.

Identity fraud reaches record levels

Posted: 15 March 2017

Cifas, the UK’s fraud prevention service, has released new figures showing that identity fraud has hit the highest levels ever recorded.   A record 172,919 identity frauds were recorded in 2016 - more than in any other previous year.  Identity fraud now represents over half of all fraud recorded by the UK’s not-for-profit fraud data-sharing organisation (53.3% of all frauds recorded to Cifas), of which 88% was perpetrated online. 
More on the Cifas website here.

Managing cybersecurity risk not just for IT department, says repor

Posted: 20 February 2017

The management of cybersecurity risk cannot be left to IT departments alone, says new analysis from Pinsent Masons, the UK law firm. Instead, businesses must deploy a number of organisational and technical measures to address the growing cyber risks they face.  The focus should not just be on prevention of security risks, says the firm:  a good governance framework will address detection of and response to cyber incidents.  The analysis identifies social engineering as a key threat.
More on the Outlaw.com website here.

Lloyds Bank urged to compensate HBOS fraud victims

Posted: 06 February 2017

MPs are urging the owner of HBOS, Lloyds Banking Group, to pay compensation to victims of a fraud facilitated by two former employees, who were jailed last week.  They also want assurances the bank will review its handling of the fraud and publish its findings.  The fraud took place before Lloyds Banking Group took ownership of HBOS, but the chairman of the All-Party Parliamentary Group on Fair Business Banking has said, in a letter to Lloyds Bank, that detailed complaints of the "criminal activity were raised with senior HBOS Management at board level and as early as 2007 and were repeated to senior Lloyds management after the takeover."
More on the BBC website here.

UK fraud levels reach £1.1bn record

Posted: 24 January 2017

The value of fraud committed in the UK last year topped £1bn for the first time since 2011, prompting a warning about increasing cyber crime and the risk of more large-scale scams as the economy comes under pressure.  The 55% year-on-year rise in the value of fraud to £1.1bn reported in the court system was recorded by accountants KPMG, which found that while the cost of fraud was higher the number of incidents was lower.
More on the Guardian website here.

Fraud victims urged to take banks to court

Posted: 17 January 2017

Innocent victims of the growing crime of bank transfer fraud – where money is unwittingly sent to criminals’ accounts – should take the bank involved to court, Britain’s leading anti-fraud charity has said.  David Clarke, a former detective chief superintendent and director of the Fraud Advisory Panel, has taken the unusual step of encouraging victims to take the recipient bank – the one providing the service to the fraudster – to court on the grounds that it “facilitated” the crime.
More on the Telegraph website here.

US cyber-fraud: three accused of $4m insider deal

Posted: 05 January 2017

Three Chinese citizens accused of hacking into computers of US law firms advising on company mergers have been charged with multi-million dollar cyber-fraud in New York.  Prosecutors said the trio made more than $4m by using information they obtained through hacking into some of the top law firms, profiting by buying stock in firms that were about to be acquired.  
More on the BBC news website here.

Half of multinationals fail to prevent third party bribery and corruption

Posted: 22 December 2016

Nearly half (49%) of multinationals are failing to carry out basic bribery and corruption checks on third party contractors before starting to work with them, according to a new report from global law firm Hogan Lovells.  The report found that 47% of respondents are failing to carry out desktop due diligence, 44% don’t ask third parties to complete a questionnaire, and the same proportion fail to conduct face to face interviews with third parties.
More on the Corporate Crime Reporter website here.

Police dismantle cybercrime malware network

Posted: 09 December 2016

A cloud-computing network used by cyber fraudsters to target one million users every week with malware-infected emails has been taken down by law enforcement agencies from more than 30 countries.   The operation to dismantle the Avalanche cloud-hosting service was led by Europol, the FBI and German police and supported by partners from 30 countries including the UK's National Crime Agency (NCA). It followed a four year investigation by the German police.
More on finextra.com here.

Failure to notify a known online data breach could incur bigger fine

Posted: 25 November 2016

Business need to adopt cyber incident response plans that include procedures for reporting data breaches internally, according to data protection law specialists at Pinsent Masons.  Staff need to be made aware of the need to quickly highlight cyber incidents to managers when they occur, and all organisations could find themselves having to report data breaches under the EU GDPR when it comes into force in 2018 (currently only some sectors are obliged to do so, including banking and telecoms).
More on Out-Law.com here.

Whistleblowing by workers thwarted by abusive retribution waged by middle managers

Posted: 01 November 2016

While many company leaders want their workers to “speak up”, such efforts are often thwarted by abusive retribution waged by middle managers against employees, says a Harvard Business Review article authored at Cambridge Judge Business School.  “Leaders often undermine their own efforts to get employees to speak up” by failing to implement policies and training to encourage free communication by workers and proper responses by middle managers, says the article, entitled “Can employees really speak up without retribution?”
More on the Judge Business School website here, and a short interview with Professor David de Cremer on the BBC Radio 4 Today programme (go to 02:42:18 in)  here.

Online fraud "costs £10.9bn a year" to UK

Posted: 18 October 2016

Annual fraud and cybercrime losses in the UK have grown to the equivalent of £210 per adult, according to research.  A total of £10.9bn was lost to the UK economy in the 12 months to April, according to the prevention group Get Safe Online, with fraudulent emails and messages directing people to websites that gather victims' personal information being the most common con-trick.
More on the BBC website here.

Fraudsters make £113m in fraud targeting bank customers

Posted: 22 September 2016

Fraudsters behind a £113 million international money laundering ring conducted one of Britain's biggest ever cyber scams, cold-calling bank customers.   Police said the criminals, who targeted Lloyds and RBS business banking customers, made between £1 million and £2 million a week at its peak and operated like a nine-to-five business.
More on the Telegraph website here.

* DCI Andrew Gould of the Met Police, quoted in this article, is speaking at the London Fraud Forum conference on 13th October.  *

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GCHQ proposes British firewall to block hackers of corporate websites

Posted: 14 September 2016

The UK’s surveillance agency GCHQ is planning to create a British firewall offering protection against malicious hackers.  The proposal was made at a conference in Washington by the director general of cyber at GCHQ, Ciaran Martin, who is also head of the National Cyber Security Centre, which is part of GCHQ.
More on the Guardian website here.

Action Fraud receives 40,000 reports a month

Posted: 31 August 2016

“Every month Action Fraud (the national fraud reporting service) receives 40,000 reports, half a million a year, and we know from the ONS stats that’s only a small percentage of what is going on. There were 3.8 million frauds and two million cyber offences. You cannot enforce your way out of this. It’s physically impossible.”  Commissioner Ian Dyson, City of London Police, in a recent article.
More on the Guardian website here.

Law firms to be hired by City of London Police for civil recovery

Posted: 15 August 2016

Private law firms will be hired by police to pursue criminal suspects for profit, under a radical new scheme to target cyber criminals and fraudsters.  In a pilot project by the City of London police, the lead force on fraud in England and Wales, officers will pass details of suspects and cases to law firms, which will use civil courts to seize the money.  The force says the scheme is a way of more effectively tackling fraud – which is now the biggest type of crime, estimated to cost £193bn a year, and is overwhelming the police and criminal justice system.
More on the Guardian website here.

UK financial institutions to face financial crime reporting obligation

Posted: 04 August 2016

Financial services firms will have to file an annual "financial crime report" to the UK's Financial Conduct Authority (FCA) from the end of this year under new plans the regulator has outlined to tackle crimes such as fraud and money laundering.  Banks, building societies, investment firms, e-money institutions, consumer credit firms and life insurers are among the firms that will be subject to the new requirement when it comes into effect on 31 December.  General insurers will initially be exempt from having to submit an annual financial crime report, but the FCA has said it will look into "bringing them into scope at a later date".
More on the Outlaw.com website here.

Brexit creating ideal conditions for fraud, says KPMG report

Posted: 03 August 2016

Economic uncertainty following the Brexit vote is creating the perfect conditions for cyber-enabled fraud, according to KPMG's latest Fraud Barometer, which says that tight economic conditions, such as those anticipated as a result of Brexit, will drive more businesses to try non-traditional methods of raising capital. In  one case cited by KPMG a shipping company was defrauded of £73 million by a man who said he had access to a secretive trading platform operated by the Pope.  The company was desperate to purchase a new ship and the fraudster convinced the management it could leverage a 1200 percent return.
More on Secure Computing website here.

New thinking needed by banks to combat financial crime

Posted: 28 July 2016

According a new paper by PwC, economic crime in financial services outpaces other industries.  Increased spending on compliance fails to reduce economic crime, and despite significantly increasing investment in compliance and being continuously under the scrutiny of regulators, economic crime in financial services has increased, showing new thinking is needed to make investment in compliance deliver more value and tackle economic crime. 
More on the The Financial website here.

One in ten adults a victim of cybercrime in the past year

Posted: 21 July 2016

There were more than 5.8m incidents of cybercrime in the last year, according to statistics released today by the Office for National Statistics.  This is far more than previously thought and enough to nearly double the crime rate in England and Wales.  The first official estimate of the true scale of online shopping scams, virus attacks, theft of bank details and other online offences is much higher than an initial ONS estimate in October last year, which put the annual figure at 3.8m, or 40% of all criminal offences.  The ONS says one in 10 adults has been a victim of cybercrime in the past year.
More on The Guardian website here.

UK AML system "futile and impotent", say MPs

Posted: 15 July 2016

Government attempts to stop the UK property market being exploited by international money launderers are “totally inadequate” and the country has instead “laid out a welcome mat” to criminals, the House of Commons home affairs committee has said.  The influential panel of MPs said it was disgraceful that at least £100bn was being laundered through the UK every year and astonishing that just 335 out of 1.2m property transactions last year were deemed to be suspicious by law enforcement officials.
More on the Guardian website here.

Councils detect £271m in fraud, but risks continue

Posted: 14 July 2016

Local authority fraud defences saved nearly £300m in 2015/16, according to figures released by CIPFA, the Chartered Institute of Public Finance and Accountancy.  The organisation estimates that 77,000 fraud cases worth £271m were detected or prevented by local authorities over the last financial year.  It warns, however, of the emerging threat of fraud relating to Right to Buy and procurement:  cases of the former increased from 526 in 2014/15 to 870 in 2015/16 and cases of the latter went from 114 in 2014/15 to 623 in 2015/16.
More on the LocalGov website here.

Fraud Advisory Panel reports "little chance" of action on fraud cases outside London

Posted: 11 July 2016

A new report from the anti-fraud charity the Fraud Advisory Panel (FAP) is particularly critical of the support available from the police to victims of fraud outside of London.  Although they could now be referred to the UK's national fraud and cyber crime reporting centre, Action Fraud, there was "little chance" that their reports would be followed up with any kind of substantive law enforcement action.
More on the Outlaw.com website here.

AML rules to be extended to cover virtual currencies

Posted: 06 July 2016

Virtual currency exchanges and wallet providers will come under the scope of the European Union's Anti-Money Laundering Directive as part of a push to tackle terrorist financing.   The EC set out proposals in February to make amendments to the recently introduced Fourth Anti-Money Laundering Directive - among which changes is bringing virtual currency exchange platforms and custodian wallet providers under the scope of the Directive.   These entities will have to apply customer due diligence controls when exchanging virtual for real currencies, ending anonymity.
More on Finextra here.

Identity fraudsters target victims aged 30 and under

Posted: 05 July 2016

Cifas, the UK’s fraud prevention service, has today  released new figures showing a 52% rise in young identity fraud victims in the UK.  In 2015 just under 24,000 (23,959) people aged 30 and under were victims of identity fraud.  This is up from 15,766 in 2014, and is more than double the 11,000 victims in this age bracket in 2010.
More on the Cifas website here.

Former Irish Life & Permanent boss found guilty of fraud

Posted: 14 June 2016

The former boss of Irish Life & Permanent has been found guilty of a €7.2bn conspiracy to defraud investors and customers at the height of the financial crisis, bringing to an end the longest criminal trial in Ireland's history.  Denis Casey was convicted in Dublin yesterday, following convictions of two other former executives at collapsed Anglo Irish Bank - John Bowe and Willie McAteer - earlier this month on similar charges.
More on the Daily Telegraph website here.

Latest report puts UK fraud cost at £193bn a year

Posted: 26 May 2016

Professor Mark Button of the University of Portsmouth - one of the report's authors - describes fraud in the UK as now being on an "industrial scale".   The report has been produced by Experian, PKF Littlejohn and the Centre for Counter-Fraud Studies at the University of Portsmouth, and reveals that business fraud now costs £144bn a year, with fraud against individuals estimated at £9.7bn.
Download the full report at the University of Portsmouth website here.

SWIFT warns banks of increased malware threat

Posted: 23 May 2016

International banks face a threat from a new wave of malicious software (malware) that allows attackers to steal money, the global financial network SWIFT has warned.  In a statement issued to its customers and posted on its website SWIFT said that the malware attack is believed to part of a broad and "highly adaptive campaign targeting banks" and that there is evidence that a number of banks have fallen victim to fraud as a result of their security measures being compromised.
More on Outlaw.com here.

UK banks failing to take cybercrime seriously, says report

Posted: 17 May 2016

UK financial institutions are failing to take cybercrime seriously enough, according to a report issued today by TheCityUK, a lobby group.  The report recommends that companies share more information, and also calls for tax breaks to boost investment in cyber defences, as the financial services industry is “the perfect target” for cyber attack.
Download the report from TheCityUK website here.

UK Government announces £1.9bn investment in cyber security

Posted: 12 May 2016

Britain’s businesses are being urged to better protect themselves from cyber criminals following government research launched this week in the Cyber Security Breaches Survey. The research also shows that in some cases the cost of cyber breaches and attacks to business reached millions, with the most common attacks detected involving viruses, spyware or malware.  With one in four large firms experiencing a breach - at least once a month - only half of all firms have taken any recommended actions to identify and address vulnerabilities. Even fewer, about a third of all firms, had formal written cyber security policies and only 10% had an incident management plan in place.
Download the full Cyber Security Breaches Survey here.

HM Treasury creates Office of Financial Sanctions Implementation

Posted: 11 May 2016

The Office of Financial Sanctions Implementation was officially established within HM Treasury on 31 March 2016, following the initial statement of intent in the Summer Budget 2015.  It has been tasked with providing "a high-quality service to the private sector, working closely with law enforcement to help ensure that financial sanctions are properly understood, implemented and enforced".
More on the Herbert Smith Freehills website here.

Experian reports rise in conveyancing fraud

Posted: 06 May 2016

A "worrying" increase in identity thieves attempting to commit fraud during mortgage and property transactions has been uncovered by the credit checking company, Experian.  The company reports that in many cases fraudsters have hacked databases or intercepted emails between people and their solicitors in a bid to divert payments, which are often large sums of cash.  Fraudsters will pretend to be a solicitor to trick people into diverting cash into their account. They also use the details of people who have died to make bogus mortgage applications.
More on the Daily Telegraph website here.

SWIFT warns customers of multiple cyber-fraud cases

Posted: 29 April 2016

SWIFT, the global financial network that banks use to transfer billions of dollars every day, warned its customers on Monday that it was aware of "a number of recent cyber incidents" where attackers had sent fraudulent messages over its system. 
More on the Reuters website here.

SMEs lose £9bn a year to fraud

Posted: 29 April 2016

UK small and medium sized businesses (SMEs) are losing more than £9bn from invoice fraud every year, according to new research published by Tungsten Network - amounting to £1,658 per SME.  Of those affected, one in six firms believes the fraud has cost them more than £5,000 in the last year alone.
More on the Talk Business website here.

FCA sets out priorities for the coming year

Posted: 12 April 2016

On 5th April the Financial Conduct Authority (FCA) issued its business plan for 2016/17, in which it sets out its work programme and priorities for the coming year - which include pensions, financial crime and anti-money laundering, wholesale financial markets, advice, innovation and technology, firms' culture and governance and treatment of existing customers.
Download the entire business plan here.

Met Police chief calls for end to refunds for bank fraud

Posted: 01 April 2016

The head of the Metropolitan Police has called on banks to stop offering refunds to all online banking fraud victims, arguing that the current system essentially rewards people for their lax internet security.  Sir Bernard Hogan-Howe said that if refunds were not guaranteed, it would force the general public to be more vigilant about their online security.  Internet banking fraud resulted in huge losses of £133.5 million last year, a year-on-year jump of a massive 64%.  At present if you are the victim of online fraud you can expect to receive a full refund, unless the bank or card supplier can prove you have been “grossly negligent". But Sir Bernard told The Times this system means people are “continually rewarded for bad behaviour”.
More on the BT website here.

Banking scams push up fraud in UK "by more than 25%"

Posted: 18 March 2016

Fraudsters managed to steal £755m from British consumers and financial institutions during 2015 – a 26% increase on the year before.  Financial Fraud Action UK said the biggest growth area was remote banking fraud, which typically sees fraudsters posing as bank staff in a bid to con people into sending them money via online banking.  The figures published on Thursday show this type of fraud leapt by 72% in 2015 and more than £168m was stolen from unsuspecting consumers.
More on the Guardian website here.

Gang of eBay scammers jailed for "industrial scale" fraud

Posted: 01 March 2016

A crime gang suspected of being part of a multi-million pound eBay scam dubbed "the Lucy network" has been jailed for a total of 18 years.  The gang, described in court as the London cell of a nationwide crime operation, raked in more than £450,000 by offering non-existent cars and motor homes for sale on Internet auction sites.  Detectives believe they are part of a larger organised crime gang known as "the Lucy network" because the conmen use the girl's name in emails to potential victims.
More on the Evening Standard website here.

Compliance officer forged document to hide criminal past

Posted: 26 February 2016

A City compliance officer forged documents to hide his own conviction for benefit fraud.  Adam Lancelot, 39, was convicted in 2012 of fraudulently receiving hundreds of pounds in council tax benefit while working for companies including Barclays Wealth and Bank of America.  He admitted four counts of failing to notify the council of a change in circumstances and was sentenced to 300 hours unpaid work at Sevenoaks Magistrates' Court.  But Lancelot later forged a document purporting to be from Maidstone Crown Court saying that he had been cleared of the fraud on appeal.  He made up the document shortly after being appointed as compliance officer with Worldwide Currencies Ltd when he was asked about news reports of his previous conviction.
More on the Daily Telegraph website here.

NAO says Government lacks understanding of fraud levels

Posted: 24 February 2016

There is a large disparity between the level of fraud and error reported by government and what might actually be occurring, auditors have warned.  In a review published yesterday the National Audit Office revealed that, excluding tax credit and benefit fraud, detected fraud across government in 2014/15 was just £72.9m – equivalent to 0.02% of total expenditure.  However, this is significantly lower than some estimates, which suggest a public sector fraud rate of between 3% and 5% across the European Union and US. This indicated, the auditors said, that significant fraud and error is going unreported.  “Government lacks a clear understanding of the scale of the fraud problem and departments vary in their ability to identify and address fraud risks,” the NAO stated.
More on the PublicFinance website here.

HSBC "taking too long to tackle financial crime"

Posted: 22 February 2016

HSBC is taking too long to tackle financial crime, US authorities have said, with an official monitor installed at the bank after a money-laundering scandal four years ago raising “significant concerns”.  The monitor has refused to sign off on the group’s progress in toughening up its procedures to avoid a re-run of the 2012 scandal for which it was fine £1.2bn.  In a report provided to the bank in January and disclosed on Monday, the monitor expressed “significant concerns” about the pace of progress in making changes required to bolster its compliance systems. The monitor “did not certify as to the HSBC’s implementation of, and adherence to” the deferred prosecution agreement signed at the time of the fine, the bank said.
More on the Guardian website here.

New anti-fraud task force launched in UK

Posted: 17 February 2016

The UK's largest banks have joined forces with the Bank of England and the police to step up the fight against financial fraud, which is estimated to cost the economy at least £24bn a year.  The Serious Fraud Office, however, is not included in the task force, which was launched last week by Theresa May, the Home Secretary.
More on the FT website here.

Dentist jailed for three years for £223,000 fraud

Posted: 03 February 2016

A dentist who defrauded almost a quarter of a million pounds from the NHS and spent the money on a fleet of luxury sports cars has been jailed for three years.  Mark Walewski, 68, earned a fortune by charging private patients for work and then submitting bills for the same procedures to the NHS – a process known as "double claiming".
More on the Daily Telegraph website here.

EU examines potential regulation of virtual currency

Posted: 29 January 2016

The European Commission is examining whether virtual currencies need to be regulated in the wake of last November's terrorist attacks in Paris, but is currently more focused on monitoring the likes of bitcoin than on rushing out new rules.
More on Finextra.com here.

Five brokers found not guilty of helping to rig LIBOR rate

Posted: 28 January 2016

Five of the six brokers in the latest Libor trial have been cleared by a jury in what will count as a major blow to the Serious Fraud Office.  The six were accused of helping Tom Hayes, who is serving 11 years in prison, of manipulating the key benchmark rate.  Five men were found not guilty of all charges by a jury at Southwark Crown Court following a four month trial.  The jury found a sixth man not guilty on one charge and is still deliberating a second charge. The judge has said that a majority verdict - rather than a unanimous vote - will be acceptable.
More on the Daily Telegraph website here.

Cost of fraud rises to £732m, says KPMG report

Posted: 22 January 2016

The latest results from the KPMG Fraud Barometer have just been published.  "Highlights" of the report include:

  • the total cost (£732 million) of fraudulent activity in the UK remains worryingly high, up from £717 million in 2014;
  • fraudsters are once again targeting some of society’s most vulnerable, preying on those in financial distress to enrich themselves;
  • businesses are persistently targeted, with fraudsters falsifying finances to entice investment, resulting in losses of £176m;
  • men over the age of 45 were the most prolific perpetrators, responsible for nearly three quarters of all losses in 2015.

More on the KPMG website here.

Due diligence and KYC burden on financial institutions increases

Posted: 19 January 2016

The Financial Conduct Authority (FCA) received a record number of information requests in 2015 from foreign enforcement agenices - as a result of which UK financial services businesses are being required to produce an ever-increasing amount of information about their clients, according to the law firm RPC.
More on the solicitorsjournal.com website here.

Serious Fraud Office asks for increased funding

Posted: 08 January 2016

The Serious Fraud Office has asked for a budget top-up of £21.1m to ensure its "blockbuster" investigations are funded through to the end of the financial year.  The SFO has an “urgent cash requirement on existing services” and needs a cash advance of £15m to tide it over until parliament approves the extra funding in full, according to the Solicitor General.
More on the Daily Telegraph website here

UK regulators getting "tougher on financial crime"

Posted: 07 December 2015

UK regulators are “getting tougher on financial crime” by issuing increasingly stringent penalties to wrongdoers, according to new analysis published this week by EY.  EY’s Investigations Index reveals that, over the past two years, the punishments handed out by the UK’s regulatory bodies – the Financial Conduct Authority (FCA), the Serious Fraud Office (SFO), the Competitions and Markets Authority (CMA) and the Office of Fair Trading (OFT) – saw fines soar by 271% (with £2.45bn issued in the past two years) and prison sentences increase 124%. Company directors also face an average prison sentence of four years or more.
More on the Financier Worldwide website here.

Transparency International calls for consolidation of UK regulatory authorities for AML

Posted: 27 November 2015

A new research report from Transparency International (TI) claims that "the current mish-mash approach to supervision of AML rules" results in only a small proportion of the corrupt money entering the UK being detected and investigated by the authorities.   The report highlights the fact that the UK has no less than 27 supervisory bodies (more than any other country) and calls for consolidation and a more co-ordinated approach.
More on the Transparency International website here.

Barclays fined £72m for financial crime controls failings

Posted: 27 November 2015

The Financial Conduct Authority (FCA) has fined Barclays £72 million for cutting corners in vetting wealthy customers in order to win a huge transaction described by one senior manager as potentially the "deal of the century."Barclays arranged the £1.9 billion transaction in 2011 and 2012 for a number of rich clients deemed by the regulator to be politically exposed persons (PEPs), or people holding prominent positions that could be open to financial abuse.  That should require a bank to conduct more detailed checks on them, but Barclays failed to do so and in fact cut corners with its compliance procedures, the FCA said in a damning report on Thursday.
More on the Reuters website here.

Only 45% of charities have set counter-fraud strategy, says report

Posted: 10 November 2015

A new report by accountancy firm PKF Littlejohn - The Resilience to Fraud of the Charity Sector in England and Wales 2015 - examines the charity sector and how it is set up to deal with issues surrounding fraud. and says that charities need to do more to protect themselves.  The report includes analysis of data provided by 392 charities and finds that of those charities who took part in the survey, 44.4% had a written counter-fraud strategy, down from 45.9% in the 2010 report.
Download the report in full on the PKF Littlejohn website here.

Edward Davenport, high profile fraudster, back in business after jail term

Posted: 10 November 2015

Edward Davenport, who has spent most of this decade in prison and handed over nearly £14m to his “worst enemy”, the SFO, a few months ago, says he is now back in business.  Despite being branded by the trial judge who sent him down a “very, very dishonest man”, Mr Davenport – better known to his detractors as the “Lord of Fraud” or “Fast Eddie” – says he is doing property deals with a Chinese business partner and looking to buy a film studio.
More on The Independent website here.

SFO "does not have the resources" to recover assets lost to fraud

Posted: 23 October 2015

UK law enforcement bodies "simply do not have the resources" to recover assets lost to fraud, making the civil courts the best avenue for victims to recoup their losses, an expert has said.  The Serious Fraud Office (SFO) returned just over £1.2 million in compensation to victims in financial year 2013/14, according to figures obtained by Pinsent Masons. Civil recovery expert Alan Sheeley of Pinsent Masons said that this figure was "disappointing", given that KPMG's annual "Fraud Barometer" estimated total UK fraud losses to be £717 million in 2014. 
More on the Outlaw.com website here.

Latest figures: one in 12 adults is a victim of fraud

Posted: 16 October 2015

The Office for National Statistics has for the first time included fraud and cybercrime in its annual crime figures - which show that the nature of crime is changing, according to senior law enforcement officers.  The inclusion of fraud and cybercrime in the statistics has resulted in figures showing a 107% increase in the overall level of crime in England and Wales over the past year.
More on the Daily Telegraph website here.

Victims of cybercrime who fail to take precautions should be lower priority, says report

Posted: 15 October 2015

Victims who fail to take precautions against cybercrime should be treated as a lower priority by police than others who have acted to improve their own security, an official report has suggested.  The controversial proposal, contained in a study carried out by Cardiff University and backed by the City of London Police, would mean police would dedicate less effort to solving electronic crimes if victims had failed to change their passwords, install security software or read up on online scams.
More on the Daily Telegraph website here.

NHS losing £5.7bn to fraud, says report

Posted: 25 September 2015

Up to £5.7 billion a year could be being lost by the NHS to fraud by patients and staff, a new report has claimed.  A review led by Jim Gee, a former director of NHS Counter Fraud Services, suggested fraud was taking place across areas such as general practice, dentistry, prescriptions and payroll.  Among examples of fraud cited in the report were GPs creating "ghost patients", dentists claiming for more work than was carried out and pharmacists failing to declare prescription charges that have been paid.

Jim Gee is speaking at the London Fraud Forum conference on 8th October - see here for details and a booking form!

More on the Daily Telegraph website here.

Crime statistics set to rise on survey method changes

Posted: 24 September 2015

Crime levels will rise by up to 40% when new estimates of the scale of fraud are included in statistics for the first time, a senior police officer has said. An extra three million offences could be added when victims' experiences of fraud and cyber crime are incorporated into the Crime Survey for England and Wales (CSEW), according to Adrian Leppard, commissioner of City of London Police.
More on the BT website here.

UK reported fraud jumps 10% to reach £800m

Posted: 14 September 2015

According to BDO's latest Fraudtrack report, almost a third (32%) of all cases of fraud committed in the UK in the first half of 2015 were by employees and cost firms and organisations over £46m.  Investment fraud such as Ponzi schemes and boiler room scams accounted for 23%;  third-party fraud, which includes frauds committed by suppliers and customers 20%, and non-corporate fraud 16%.
More on the Forbes website here.

Tax fraud investigator "stole £150,000 to pay off gambling debts"

Posted: 28 August 2015

A tax fraud investigator allegedly stole £150,000 in a VAT scam he set up to pay off his spiralling gambling debts.  A court heard how HMRC officer Richard Barr, 38, pretended to trade £4 million of electronic parts that never existed.  In 17 months the two bogus companies he created obtained £500,00 from HMRC.
More on the Daily Mail website (sorry!) here.

UK sets up international anti-corruption agency

Posted: 14 August 2015

A new anti-corruption unit is being set up in the UK, under the direction of the National Crime Agency. The International Corruption Unit (ICU) will be funded by the Department for International Development and will merge existing investigation and intelligence units from the Metropolitan Police, City of London Police and the National Crime Agency.  The new team will be managed by the National Crime Agency and will be the central point for investigating international corruption in the UK.
More on the Out-Law.com website here.

Local council introduces fraud reporting app

Posted: 11 August 2015

Bromley Council are the first council to introduce an app so that people can report suspected cases of fraud directly to the council.  The free app can also be used to provide up-to-date information about different types of fraud, alerting local residents to scams.
More on the Local Gov website here.

UK Government pledges to clamp down on money laundering through property market

Posted: 28 July 2015

David Cameron, the UK Prime Minister, toay unveiled proposals to unmask the owners of British properties bought through foreign companies in order to flush out criminals.  The Land Registry will this autumn publish for the first time the data it holds on properties bought by overseas corporate vehicles, he said, exposing the scale of international ownership in full for the first time.
More on th Daily Telegraph website here.

Barclays considering Deferred Prosecution Agreement to end fraud probe

Posted: 22 July 2015

TBarclays is understood to be considering whether or not to accept a deferred prosecution agreement with the Serious Fraud Office, which would draw something of a line under the lengthy investigation into the bank's £2bn Qatari fundraising in 2008.
More on the Daily Telegraph website here.

First successful prosecution of City boiler-room fraud

Posted: 20 July 2015

A police crackdown on the use of City of London addresses for boiler-room investment fraud has yielded its first successful prosecution, of a company offering serviced offices and mail forwarding.  Servcorp UK — a branch of an Australian company with offices in the Leadenhall Building or “Cheesegrater” — pleaded guilty to seven offences relating to failures to provide client records for inspection, and paid £32,500 in fines and costs.
More on the FT website here.

Current accounts become top target for fraudsters

Posted: 03 July 2015

For the first time, current accounts have become the most targeted financial product by fraudsters, as criminals probe for loopholes in the UK's seven-day switching service.  At least 89 in every 10,000 applications for a current account are made by an imposter, according to Q1 figures released by Experian.
More on Finextra here.

FATF issues guidelines on virtual currencies

Posted: 02 July 2015

The Financial Action Taskforce (FATF) has issued Guidance as a response to the increased use of  virtual currency payment products and services, and the money laundering and terrorist financing risks that these VCPPS present.  The Guidance seeks to:

  • show how specific FATF Recommendations should apply to convertible virtual currency exchangers in the context of VCPPS, identify AML/CFT measures that could be required, and provide examples; and
  • identify obstacles to applying mitigating measures rooted in VCPPS’s technology and/or business models and in legacy legal frameworks.

The Guidance can be downloaded from the FATF website here.

EU Directive on data protection due by end 2015 - guidelines to follow ...

Posted: 29 June 2015

The European Commission and data protection authorities (DPAs) across the EU will develop "very precise and concrete guidelines" to explain how elements of planned new data protection laws should be interpreted, including on enforcement, the EU's justice commissioner has said.  Talks on the final wording of the proposed General Data Protection Regulation were opened last week.  The discussions involve officials from the European Commission, European Parliament and Council of Ministers.  At a press conference following the first round of trilogue negotiations, EU justice commissioner VÄ›ra Jourová said that the EU law makers are "on track" to adopt the new Regulation, and a new data protection directive governing personal data processing by law enforcement agencies, before the end of 2015.
More on Out-law.com here.

$1bn vanishes from three Moldovan banks

Posted: 18 June 2015

A fascinating article about $1bn that has vanished from three of Moldova's leading banks, much of it passing through UK companies.
More on the BBC News Magazine website here.

New AML rules to take effect from 26th June

Posted: 10 June 2015

The fourth Anti-Money Laundering (AML) Directive will take effect from 26th June. EU countries will have two years from then to implement the rules contained in the Directive into national laws.  The Directive applies to a range of businesses, from banks and other financial institutions to auditors and accountants. The rules will also have to be complied with by any other kinds of businesses involved in making or receiving cash payments for goods worth at least €10,000, regardless of whether payment is made in a single, or via a series of linked, transactions.
More on the Out-Law.com website here.

UK rejects European Banking Authority anti-fraud guidelines

Posted: 28 May 2015

The UK has rejected a set of European security guidelines designed to safeguard internet payments, fuelling concerns that British banks will be easier fraud targets.  The European Banking Authority has released a set of measures to provide a benchmark for internet payment security across 28 member states.  While 25 countries signed up to the guidelines, three countries — the UK, Slovakia and Estonia — said they will not comply with the safety measures.  The Financial Conduct Authority, the UK’s watchdog, said it would not sign up to the guidelines because “it does not have the power without legislative change” to make binding rules requiring all payment services to comply.
More on the FT website here.

FCA to shift focus from fining firms to penalising individuals

Posted: 18 May 2015

New rules coming into force in March next year are designed to make it easier for the regulator to take enforcement action against senior people in banks and other financial institutions.  ‘The FCA will be under increasing pressure to go after individuals,’ says Tim Aron of Arnold & Porter. ‘The move towards individual accountability is going to be the next big theme in regulation.’
More on the Law Society Gazette website here.

White collar crime prosecutions fall

Posted: 07 May 2015

Prosecutions in the UK for white-collar crimes such as fraud and corruption have fallen by nearly a fifth in the past four years as police and crime agencies have faced funding cuts, according to research.  Despite an increase in tip-offs, the number of defendants being pursued by the Serious Fraud Office and the City of London Police has fallen from 11,261 in 2011 to 9,343 last year, according to the law firm Pinsent Masons. The number of cyber crime prosecutions has trebled, to 45 last year.
More on the Financial Times website here.

Effective AML controls should not include "wholesale de-risking" says FCA

Posted: 29 April 2015

Banks that exclude entire categories of customer from their services because they are perceived as more likely to be involved in financial crime run the risk of regulators questioning the effectiveness of their compliance procedures, the Financial Conduct Authority (FCA) has warned. The regulator said that money transfer services, charities and fintech companies had found it difficult to access financial services because they were seen as being higher risk, while some banks were also pulling out of the correspondent banking market, which is associated with foreign exchange and international payment services.
More on Out-law.com here.

Teenagers unaware of social media cybercrime risks, says study

Posted: 23 April 2015

Four in ten teenagers have fallen victim to cybercrime as they carelessly reveal personal details on social media, a new survey shows.  Figures reveal that more than 41% of teenagers aged 18 and under have been targeted by fraudsters looking to obtain their PIN number or bank details.  Teenagers' constant exposure to technology and their naivety when communicating with others on social media platforms are to blame, according to ifs University College, which led the research.
More on the Daily Telegraph website here.

UK property market a safe haven for corrupt funds, says TI report

Posted: 14 April 2015

36,342 London properties covering a total of 2.25 sq miles are held by hidden companies registered in offshore havens says new research from Transparency International.  The research – analysing data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit – found that 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities.
More on the Transparency International website here.

Report sets out scale of fraud in travel

Posted: 13 April 2015

Holidaymakers are being defrauded by more than £2 million a year, according to a new report from the National Fraud Intelligence Bureau.  Frauds include hacking into the accounts of owners on accommodation websites, plus airline ticket fraud and fraudulent holiday clubs.
More on the Travel Weekly website here.

FCA Business Plan raises financial crime to key risk status

Posted: 27 March 2015

Earlier this week the Financial Conduct Authority released its Business Plan and Risk Outlook for 2015. As was the case last year, technology and data issues were again listed among its most pressing concerns.  The FCA's elevation of financial crime to its list of seven key risks is largely due to growing concerns about the impact of cybercrime on digital transactions.  The FCA said that cyber-exposure "is exacerbated by the increased reliance on web-based front-end channels that increase the risk of personal data and
consumer funds being compromised".
More on Out-Law.com here.

Massive rise in identity fraud in 2014, says CIFAS report

Posted: 27 March 2015

If you are male, aged 46 and live in a sizeable city such as London, Leicester or Leeds you are more likely to be a victim of identity fraud than anyone else in the country, according to the annual report from the UK’s fraud prevention service, Cifas.  Recorded frauds increased by 25% in 2014, according to Cifas, with just over 40% of those due to identity fraud.
More on the Guardian website here.

BBA calls for regulation to be based on activity, not type of institution

Posted: 27 March 2015

The digitisation of banking and the entrance into market of technology companies, retailers, new 'challenger' banks and other payment service providers calls for a rethink of the way banking is regulated, according to the British Bankers' Association (BBA).  The organisation claims that financial stability and consumer protection could be threatened unless banking is regulated on the basis of the services being provided rather than the identity of the provider. 
More on Outlaw.com here.

85% of UK fraud is unreported, says new report

Posted: 19 March 2015

The true scale of crime in Britain is far higher than previously thought because 85 per cent of fraud and cybercrime goes unreported, official figures have revealed for the first time.  Figures from the City of London Police – which has a national lead on tackling fraud – showed an estimated 1.2 million crimes were not reported by individuals and businesses such as banks in 2013-14, worth more than £12 billion.
More on the Daily Telegraph website here.

Fraud hits highest level for 12 years

Posted: 22 February 2015

Instances of fraud hit their highest level for 12 years in 2014 as a result of a large increase in "unsophisticated fraudulent activity", a report byaccountants BDO has found.  According to BDO's FraudTrack report, which examines all reported fraud cases over £50,000 in the UK, the total number of reported cases rose to a record 546 in 2014 from 525 in 2013.
More on the Accountancy Age website here.

Pensions reform likely to lead to increased levels of fraud

Posted: 20 January 2015

Pensioners have been warned that they could become targets for fraudsters in the wake of the Government’s major reform of pension rules.  Regulators have become increasingly concerned that fraudsters will target   pensioners in a bid to steal billions of pounds which, from April, will no longer have to be spent on annuities at the point of retirement.
More on the Daily Telegraph website here.

Banks need to balance AML, commercial and competition risks

Posted: 16 January 2015

Banks face competing legal and commercial risks when determining whether or not to provide banking services to financial technology companies, an expert has said.  Financial services litigation and compliance expert Michael Ruck of Pinsent Masons, the law firm, said anti-money laundering requirements and pressure exerted from competition regulators set competing agendas that banks must balance.
More on Outlaw.com here.

UK Home Secretary launches Serious Crime Bill

Posted: 08 January 2015

The UK Home Secretary, Theresa May, yesterday launched new legislation to crack down on serious and organised crime.  The Serious Crime Bill, which has already been agreed by the House of Lords, creates new powers to seize assets and money from criminal gangs.  It offers new options to the National Crime Agency, which the Home Secretary hailed as a key part of the Government's success in overhauling the response to serious and organised crime.
More on the Daily Mail website here.

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